Senate Panel OKs Health-Care Tax

2005-07-07

The state would impose a tax on nursing homes and some other care facilities to help finance Medicaid under a measure endorsed by a Senate committee on Tuesday.
Also approved by the Senate Finance Committee was a proposed tax credit to offset the higher costs that some nursing home patients will have to pay because of the new surcharge.
Human Services Secretary Pam Hyde said the tax changes were intended to generate additional state and federal money for Medicaid without raising costs on nursing homes or the "private pay" patients who aren't covered by Medicaid.
The legislation calls for a surcharge of about $8.82 a day on each occupied bed at nursing homes, residential treatment centers and intermediate care facilities for the mentally retarded. Hyde estimated that Medicaid recipients occupy about 80 percent of those beds.
The proposed tax credit would be limited to $10 a day for expenses paid to any of those institutions.
The surcharge will raise about $22.5 million in state money.
The state will increase its payments to the institutions by an estimated $5.8 million for Medicaid patients to help cover their higher operating costs because of the fee. After making those payments, the state nets about $16.7 million in revenue.
The additional money can be used to pay for spending increases on Medicaid, supporters said. For every $1 spent by the state on Medicaid, the federal government provides about $3.
Sen. Joe Carraro, R-Albuquerque, described the tax proposal as a "scam— a scheme" to collect more federal money for Medicaid. He also objected that raising taxes to pay for the health care program did not resolve the underlying issue of how to control growing costs of Medicaid.
"It's a Band-Aid. We really haven't fixed Medicaid," Carraro said. excerpts from The Albuquerque Journal, Article by The Associated Press (Barry Massey)