Gov. Nathan Deal’s proposed fix for the state’s Medicaid funding plan cleared its first major hurdle Thursday. In just the first week of the legislative session, it passed the Senate and headed to the House.
Deal had urged quick passage of Senate Bill 24. The bill would extend a 2-year-old funding mechanism known as the state’s “bed tax” and avert a financial crisis in the state’s budget.
While there is still more work to do, House Speaker David Ralston, R-Blue Ridge, has already endorsed the bill. Ralston has not said how fast he wants to get it through his chamber, but it is expected to move at a similar speed.
“The Senate has taken courageous action on a pressing need for our health care system in Georgia,” Deal said afterward. “This is a difficult but important step in safeguarding the medical care of our most vulnerable citizens — and the hospitals that serve them in all corners of this state.”
SB 24 would allow the Department of Community Health to levy the tax — in the form of fees — from hospitals to fill a Medicaid hole of nearly $700 million.
Lawmakers originally approved the bed tax when it was first launched. This time around, however, many were loath to approve what they saw as a tax increase. Deal’s solution is essentially a work-around, so that legislative approval would give a state agency the power to decide on the fees — including whether to lower or eliminate them.
Supporters have argued the plan is not a direct tax increase. Anti-tax advocates, not surprisingly, disagree. The Washington-based group Americans for Tax Reform, run by Grover Norquist, called it a “step in the wrong direction” this week.
Despite Democratic objections to fast-tracking the bill, Senate Republican leaders praised their chamber’s 46-9 vote as a sign their majority party was ready to get down to business — instead of the traditionally ceremonial start observers are used to.
Debate in the chamber took nearly three hours, although leaders entered it confident they had enough votes.
“From the day we left here last year, there were certain members of the Senate working on this particular issue … because we knew that train was coming down the railroad tracks,” said state Sen. Renee Unterman, R-Buford. Now, “on the fourth day, we’re passing major legislation.”
Not all members were on board. Although the bill won by a wide margin, both Democrats and a group of Republicans who opposed what they considered a tax increase introduced a combined eight amendments. Only one passed, adding a sentence to the bill involving the state budget.
All other attempts to limit how long the fees would be in place (the bill says four years), how patients would be served and whether the fees should be used to expand Medicaid in Georgia — a Democratic amendment already opposed by Deal — were rejected.
Deal visited the Senate caucus meetings of both parties in the early morning for a final push in favor of the bill. In his State of the State address later Thursday, he said the number of Georgians eligible for Medicaid is expected to grow by 100,000. The growth will increase the state’s Medicaid costs by nearly $1.7 billion over the next 10 years, he said.
Under the current structure, most Georgia hospitals pay fees of 1.45 percent of net patient revenue. The state uses money raised by the fees to qualify for additional federal funds, which are given to hospitals based on how much Medicaid care they provide.
In other words, the fees pay for hospitals to continue to treat patients who have minimal or no health insurance.
Health care providers, most of which back the plan, have warned they would have to cut jobs and services if the fees were not continued. They have also said as many as 15 rural hospitals could be closed.
SB 24 now heads to the House for consideration, starting Jan. 28. Lawmakers are off next week to allow for state budget hearings.
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