Originally, the tax was $19 million to support the state Medicaid program, which hospitals in Maryland supported. It was supposed to be a temporary fix, but it has exploded now to $400 million per year. It became a convenient way for the State to balance the budget. It no longer has anything to do with Medicaid; it goes to the General Fund. One would then think that the tax could be easily repealed. Not so fast.
As I have blogged, it's an easy and convenient way to make up any budget shortfall. MHA has asked the Governor to expedite the reduction of this tax in his 2015 budget by $100 million to get the ball rolling, if you will, since the tax or assessment goes away by 2018. I am a little concerned by the Governor’s quote in the Sun article, "There's always a certain temptation and allure, a certain attraction to cutting taxes to make everybody feel good and make everybody look good. But in the long run, the math catches up to you."
My hope is that 2018 doesn't come and go without any elimination of the taxes, let alone $100 million in 2015. You see if it doesn't, we will lose the Maryland waiver, which means that we lose over $1.2 billion dollars that is provided annually to Maryland hospitals from the federal government.