Perdue catches heat over trauma funding fees

Gov. Sonny Perdue found quick opposition for his proposal to fund Medicaid and trauma care with new fees on hospitals and speeding motorists.

The criticism was strong and bipartisan.

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Rep. Earl Ehrhart (R-Powder Springs), chairman of the House Rules Committee, took aim at the plan Perdue laid out in his annual State of the State address Wednesday.

“I’m unequivocally opposed to that new tax,” Ehrhart said. “That’s not a tax on hospitals. It’s a tax on individual consumers.”

Ehrhart, as chairman of Rules, has great power to decide what legislation reaches the House floor.

Perdue has proposed a 1.6 percent fee on hospital revenues and health insurance plans to fill the state’s $208 million hole in Medicaid this year, and to provide $60 million toward a statewide trauma network.

Senate minority leader Robert Brown (D-Macon) disagreed with most of what Perdue said. “I’m just disappointed overall with the governor and his lack of leadership,” Brown said. “I don’t think it’s a good idea to tax hospitals to fund trauma care,” Brown said.

Perdue told legislators he knew his plan would “not be universally acclaimed,” but said the federal government, “in its infinite wisdom,” created the problem. New federal law going into effect later this year would require the state to charge private insurance companies the same fee it charges the HMOs that serve the state’s Medicaid and PeachCare populations. Georgia charges its Medicaid HMOs a 5.5 percent fee on revenues. The state leverages the money from those fees to qualify for a federal match.

Rather than lose the federal match, making the Medicaid situation that much worse, Perdue opted to extend a 1.6 percent fee to hospitals and health insurance plans and recreate the “super-speeder” idea, which would impose a fine of $200 on those found guilty of driving more than 15 mph over the speed limit. A similar plan failed in the final days of the 2008 legislative session.

“Like most things we address here at the Capitol, this plan will not be universally acclaimed,” Perdue said. “But, I have arrived at this solution after thoughtful, careful deliberation. I implore you. Do not rush into a short-sighted cut that would have long-term consequences for Georgia’s most needy.”

The proposed fees on health insurers and hospitals would bring in an estimated $372 million, which would also raise state reimbursements to medical providers for serving Medicaid and PeachCare patients.

Jimmy Lewis, CEO of HomeTown Health, which represents 55 Georgia rural hospitals, said the hospital fee was expected, though unwelcome. “This could put some rural hospitals in jeopardy,” Lewis said. “It could lead to a closure.”

Lewis recommended increasing the state tobacco tax instead.

The Georgia Hospital Association reiterated its opposition to the Perdue plan.

“Operating margins are already extremely thin, with more than a third of Georgia hospitals operating in the red,” said Kevin Bloye, a GHA vice president, in a statement. “Therefore, GHA must strongly oppose any new tax on the sick.”

The group also advocates a higher tobacco tax along with other changes, such as removing the HMOs from the state Medicaid and PeachCare programs.

A health insurance trade group said it was unclear which insurer plans would be targeted under the Perdue plan. “We don’t understand what numbers they’re using,” added Kirk McGhee, executive director of the Georgia Association of Health Plans, which is fighting the levy.

Rep. Mary Margaret Oliver (D-Decatur) said she’s a strong backer of a statewide trauma network and is still trying to figure out how much money will come from fining “super-speeders,” as the governor suggested. “What does that mean, really?” Oliver asked. “We’re going to have a real split in the health care community about who gets taxed extra.”