Georgia’s top political leaders back ‘bed tax’ plan to fund Medicaid

Gov. Nathan Deal urged the quick passage of a Medicaid funding plan that would spare legislators from raising taxes and instead allow a state agency to fill the gaping hole in Georgia’s budget.

Lt. Gov. Casey Cagle and House Speaker David Ralston on Wednesday also endorsed the governor’s plan to extend the 2-year-old funding mechanism, known as the “bed tax,” despite criticism from conservatives who oppose tax increases. The plan is expected to reach a Senate vote Thursday, and House lawmakers could debate it later this month.

The strategy to clear one of the thorniest issues of the legislative session could be an omen of the budget proposal that Deal will unveil Thursday, which is expected to include a range of sharp cuts even with the Medicaid funding hole filled.

It also underscores the other challenges lawmakers must address, including stronger ethics rules that could reach a vote this year. An exchange between Cagle and Ralston before hundreds of business leaders on Wednesday hinted at the difficulties the two leaders face in bridging a divide over ethics.

The show of support for Deal’s Medicaid proposal at Wednesday’s event, sponsored by the Georgia Chamber of Commerce, was intended to present a unified front among lawmakers for a plan that has already been roundly criticized by anti-tax advocates. The Washington-based group Americans for Tax Reform, run by Grover Norquist, called it a “step in the wrong direction” this week.

The measure, Senate Bill 24, would allow the Department of Community Health to levy the fees from hospitals to fill a Medicaid hole of more than $500 million. Health care providers warn that they would have to cut services and close as many as 15 rural hospitals if the void isn’t filled.

Ralston called it a reasonable way to meet Georgia’s needs and blunt the impact that losing the fee would have on hospitals. Cagle said it was a way to “stand up and fight” for the state’s neediest.

“It’s the least that we can do to step into the gap and help them save lives,” he said of Georgia’s hospitals.

Still, debate in the Senate will likely be lively. Republican leaders, who fast-tracked the bill through their usual process, now need help from the Democratic minority to waive their normal rules and allow SB 24 to hit the floor.

The likely trade-off for that cooperation is a full discussion before the vote. “The caucus will keep an open mind” about the bill, said Senate Minority Leader Steve Henson, D-Tucker. But, he added, “I have deep concerns about the process. What’s the rush?”

The Medicaid gap is only the most immediate of health care funding questions that Georgia faces. The federal health care overhaul will cost Georgia an additional $1.7 billion over a 10-year span, Deal said, and stiff health spending cuts this year and next won’t cover it.

The chamber’s event, which is typically where lawmakers roll out new policy proposals, also marked a flash point in the ongoing debate on stricter ethics rules. The Senate on Monday set a $100 cap on lobbyists’ gifts to members, though it contains many loopholes.

“I think it’s the proper balance,” said Cagle, who has pledged to follow the gift cap even though the rule does not apply to him. “The reality of where we are is we have wonderful individuals who serve in the General Assembly and none of them are seeking to game the system. They want to do what’s right and what’s fair.”

Ralston, however, quipped that the Senate rule was more of a “sun visor” than a hard cap, and he expressed confidence that both chambers would reach a broader agreement on ethics reform. But he said he didn’t want “media elites” driving the agenda.

“Every time we kind of get ready to do something,” he said of the media, “they move the goal post.”

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Staff writer Kristina Torres contributed to this article.