25 April 2017 — 2106 mdt
Taxing hospitals to fund pre-school may be
a scheme for laundering Medicaid money
Mike Dennison at KXLH and Matt Voltz at the Associated Press are reporting that a last minute deal struck by Gov. Steve Bullock and legislative leaders will slap a tax on Montana’s largest hospitals to provide $6 million in funding for private pre-school operations, a priority for Bullock.
The scheme is an amendment to HB-639.
“There’s a feeling that the hospitals, especially the larger hospitals in Montana can afford to make this contribution to the state, inasmuch as they benefited from (Medicaid) expansion,” said Bob Olsen, vice president of MHA, which represents hospitals in the state. “So, they are willing to be good corporate citizens and participate, since the state has a budget shortfall.” [KXLH]
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…legislators are calling [the tax] a “temporary hospital community benefit assessment” that would be charged to the state’s 14 largest hospitals. Those hospitals would pay the state a combined $4.3 million a year until 2019 under that fee, or about $13 million. What doesn’t go to the pre-school program would go to the state’s general fund. [AP, via Missoulian]
How is this not a way of laundering Medicaid money, a scheme to divert Medicaid money from paying for health care to paying for baby-sitting?
Why are hospitals agreeing to what may be the functional equivalent of extortion? Pre-school is fine, but private pre-school should be paid for out of private pockets. Public pre-school should be paid for out of the general fund and financed by an increase in the progressive income tax for individuals and corporations.
Medicaid money should be used to pay for Medicaid services and nothing else, and all of it should be spent. A state government that runs a Medicaid surplus isn’t helping as many people as it could.
I hope an advocacy group for Medicaid sues to stop this if the bill passes and Bullock signs it into law.