Medicaid bed tax: Misnamed, unsustainable, divisive — and apparently irresistible

For an up-close view of the brokenness in our political and health-care systems, and especially of the way they make one another worse rather than better, you could hardly do better than watch the debate over Georgia’s hospital bed tax. It has it all.

First, there’s Medicaid. It’s the program states can’t live with — no matter how much money they pour into it one year, the cost only rises the next, in part because states have limited control over it — and can’t live without — the federal dollars involved are too numerous to pass up.

Medicaid funding is an inherent contradiction in fiscal responsibility: In order to balance their budgets, states look for ever more ways to get ever more money from a federal government that is ever more in debt. Meanwhile, even as Medicaid funding rises, Medicaid patients have ever more trouble finding doctors who will accept them because of the program’s low reimbursement rates.

So, Medicaid is so broken as to somehow render politicians incapable of anything but pouring more money into it. Which, I suppose, means it meets the threshold for being a true government program.

There’s the tax itself. Politicians like to call it a “hospital provider fee,” even though a “fee” is something the state charges for a service it provides. The only service provided here is the state’s role in asking the feds to dole out another half-billion dollars a year in matching funds, roughly $2 for every $1 raised by the tax, er, “fee.”

Those matching funds flow back to the very same hospitals that pay the tax. That makes it more akin to an extremely high-return investment, the kind of consistently high return one normally associates with an investment scam. (Given how unsustainable this entire arrangement is, that sounds about right.) It’s as if the hospitals are charging U.S. taxpayers a usurious interest rate for the pleasure of holding their money awhile. And yet, despite all this, the hospitals still end up losing money on many Medicaid patients.

Then there’s the way in which Georgia legislators have approached the tax this year compared to its initial approval in 2010. Three years ago, the tax was the source of much drama toward the end of the session. And while I’m hard-pressed to name a legislator who lost re-election after voting for the tax in 2010, the impact on the Senate wound up being truly historic.

Passing the tax involved a great deal of arm-twisting, including the loss of committee chairmanships for some senators who opposed the tax. The bullying was one of the reasons GOP senators cited the most after the 2010 elections when they staged a coup against their fellow Republican, Lt. Gov. Casey Cagle, and opted for governance by consensus within their caucus. That schism shaped the past two sessions, with fallout that continues today: Disaffection with leadership of the Senate by the Senate led to wholesale changes for this year’s session.

Having learned their lesson, GOP leaders don’t want to force legislators to walk that plank again. So they’re asking them to let someone else walk the plank.

This year’s bed-tax bill would delegate authority for levying the bed tax to the nine-member board of the Department of Community Health. It would be four years — that’s two legislative cycles and one gubernatorial race from now — before lawmakers had to act on the tax again.

Finally, there’s the near-certainty that, after jumping through hoops to renew this tax without being seen renewing it, Georgia Republicans will campaign during the next electoral cycle on the notions of cutting spending and refusing to raise taxes. They’ll probably add a few barbs about federal spending for good measure.

And, if history is our guide, almost all of them will be re-elected two Novembers from now — right about the same time Georgians of various loyalties will begin demanding their favorite football teams replace this coach or that one because he’s made a mess of his team and can’t seem to fix it.

– By Kyle Wingfield

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97 comments Add your comment

Aynie Sue

January 17th, 2013
5:34 am

Thanks, Kyle, for focusing attention on the bed tax political scam.

But don’t single out Medicaid as the victim of unsustainable spending on health care; Medicare and all public and private health insurance programs are victims of the unsustainable cost of American health care. The solution is to take measures to reduce waste in health care practices and extend coverage, not to cut health care insurance programs and increase the out-of-pocket expenses to individuals.

Joint federal/state programs, like Medicaid, are a bad idea. Why sustain 51 bureaucracies and expand the opportunity for pilfering by thousands more politicians? Let states run the programs that require means testing, and the federal government run the others.

a

January 17th, 2013
7:17 am

The Republicans are determined to eat their own.

middle of the road

January 17th, 2013
7:36 am

So the “powers that be” are against raising regular income tax rates to supply more money to Medicaid, but have no problem taxing all those who use hospital services to pay for Medicaid services for the poor? So the person who is healthy and doesn’t go to the hospital doesn’t need to help out with health care for the poor? Just like opposing Obamacare’s requirements that everyone exibit personal responsibility and possess health insurance that they will INEVITABLY need one day, but requiring hospitals and doctors to charge ALL OF US and indirect tax to subsidize those who refuse to get insurnace (a good number of which can easily afford it). Free riders get the advantages of our current system (hopefully not for too much longer).

Kyle Wingfield

January 17th, 2013
7:40 am

Immediate commenting is back on.

Bob Loblaw

January 17th, 2013
7:49 am

I just don’t get the “unsustainable” part.

Aesop's Fables and other Lib Economic Theories

January 17th, 2013
8:02 am

This tax is like the same thing Ken Lay of Enron went to jail for, isn’t it?

Anyway, how many more pyramid schemes lie in waiting for our future generations because of government intervention in health care and which one of them will be left holding the bag?

Bob Loblaw

January 17th, 2013
8:08 am

@Aesop:

What if you wanted health insurance and applied to over 10 companies for an individual policy and all ten turned you down because you had a pre-existing condition? I’m talking about a true failure of the free market to provide a product that you want to buy. Would you believe that government should, either by policy or by offering coverage, intervene? Or, should the willing buyer who can’t find the willing seller “go bare”?

Georgia , The "New Mississippi"

January 17th, 2013
8:14 am

Great article Kyle,……………you are finally stating what the rest of the nation already knows. Georgia GOP Johnny Reb legislators are the biggest problem our state must overcome. They have very low morals and are noted for being the most corrupt politicians in our nation. There is NO WAY Georgia can avoid being the undisputed laughingstock of our nation.

Bob Loblaw

January 17th, 2013
8:32 am

@Aesop:
When you are rejected for health insurance by as few as one private insurer for a pre-existing condition, then you are able, as you suggested, to “bring proof of his rejection for insurance to a government agency set up to specifically provide for such instances” under, yep, Obamacare.

Not an extreme scenario nor dreamed up. Just a real-life example of a person who busted their tail to get an insurer to take them only to be unable to find coverage in a free market. Disappointing in all candor that not one private plan would provide coverage. But it is a good thing to see that you agree with Obamacare’s pre-existing insurance policy for those failed by the free market.

Cutty

January 17th, 2013
8:43 am

Where are all the cries of Socialism? Are Deal and the GA Legislature Commies like Obama? Charging a tax to the insured to help pay for Medicaid; Georgia’s version of Obamacare.

Aesop's Fables and other Lib Economic Theories

January 17th, 2013
8:43 am

Bob – Is that ALL that obozocare does?

How could someone miss such an obvious point?

Bob Loblaw

January 17th, 2013
8:55 am

@Aesop:

I’m unsure what point your referencing? Was it the dreamed-up daddy rape? (which, btw, was disgusting and totally unrelated to the subject)

Jefferson

January 17th, 2013
9:10 am

People who were born with a silver spoon never understand completely the lives of the working poor, but they have lots to say about it.

fair and balanced

January 17th, 2013
9:13 am

Socialism in health care is totally appropriate when passed by Republicans to cure the needs for emergency treatment of the uninsured – Reagan-EMTALA (unfunded mandate); Romney-Romneycare (over 8 billion of Medicaid waivers sucked out of citizens of other states through the feds); Deal -bed tax (tax on those who have insurance and can pay to cover Medicaid shortage caused by the poor) . But god forbid a commie liberal passes a law requiring individual responsibility for payment-that is real socialism.

The Ghost of Lester Maddox

January 17th, 2013
9:25 am

Kyle -

You’d better watch out – if you keep writing stories like this one that are: (1) informative; (2) non-partisan; (3) educational; and, (4) thought provoking……the powers that be at the AJC won’t know what to do with you….

…..it’s amazing that the editorial gurus at the AJC allowed you to clear this one without forcing you to insert any wording or any mention of how everything is Bush’s fault, how native Georgians are backward and uninformed, how Obama will solve all things, how anyone who disagrees with Obama is racist, etc. etc.

BW

January 17th, 2013
9:27 am

Sounds about right….shift the responsibility and claim small government bonafides on the campaign trail. Medicaid needs to be reformed drastically….block grants it could be argued are a form of death panels by some in opposition to that but that really is the nature of sustainable entitlement programs….deciding the level of care that will be administered to the patient before a cap hits…the only question is who gets to decide what that is?

md

January 17th, 2013
9:45 am

“Just like opposing Obamacare’s requirements that everyone exibit personal responsibility and possess health insurance that they will INEVITABLY need one day, but requiring hospitals and doctors to charge ALL OF US and indirect tax to subsidize those who refuse to get insurnace (a good number of which can easily afford it).”

Except Obamacare doesn’t. It requires personal responsibility only for those that can afford it with no regard for why they can’t afford it, at that point those that actually did make the better choices in life get the added bonus of paying for others.

md

January 17th, 2013
9:49 am

“People who were born with a silver spoon never understand completely the lives of the working poor, but they have lots to say about it.”

And there are many among the “working poor” that make the choices to remain that way and also have plenty to say about it. There is a certain regular poster over at that other place that commented frequently about how she turned down promotion after promotion because she was “comfortable” with her meager lifestyle yet always had plenty to say on why others should pay more for the “poor”.

Choices folks………….

md

January 17th, 2013
9:52 am

Pre-existing conditions could have been an easy fix under our old system had the silly “group” designations been adjusted, that would have been all that was necessary. But some buffoons decided that a bunch of people working for an employer was a “group” while a bunch of people self employed wasn’t a group.

Sometimes common sense needs to prevail……..

Michael

January 17th, 2013
9:59 am

Instead of a bed tax, lets tax guns and ammo to fund mediciad and that will help Hospitals deal with the problem of uninsured patients and allow them to keep their doors open.

Dusty

January 17th, 2013
10:08 am

I can see that Kyle is angry over this whole Medicaid mess. No wonder. It’s like the Gordian knot. Nobdy can untie it.

I think the Feds shold step out of the picture and leave it to the states. When the states can’t handle their own sick, then they will economize or do what is necessary. If state representatives can only think of their personal political status in this, they need to go.

Medicaid is growing every year. If we take penalties off of hospitals, doctors and the healthcare system,and let them manage healthcare, we would get better results and better care.

Get the government out of medicine! .Get insurance out of medicine. We have too many people running what is not their line of work. That is why we now have this silly bed-tax fiasco. Too many self-important profit seekingt people who could care less about the sick. Time for professionals to take over.

Jefferson

January 17th, 2013
10:19 am

md — your comment has nothing to do with mine at all, you just want a soapbox.

Dusty

January 17th, 2013
10:26 am

I don’t think that the “working poor” are what is clogging Medicaid. I think it is the NON working poor and possiblhy the unemployed who are filling those ranks.

If you offer something “free” , a lot of people will come all with “valid” reasons to be included. I think strict requiremnets should be a first step. Check closer on the applicants of Medicaid to be sure they are truly needy and not just skipping the payments for their own needs.

It is human nature to want something free but it is not fair when others are paying for your care when you should be responsible. A lot of people have conveniently forgotten that. .That is one reason our Emergency Rooms are crowded. .

UIC

January 17th, 2013
10:33 am

So your argument is not that our health care costs per person are nearly double most of Western Europe, yet our our life expectancy is lower than every country in Western Europe. You think it may have something to do with the fact that our obesity rates are between 30% and 300% higher than Europe? Hey, the heck with the fact that we were drunk when we got in the car and wrecked it….can you believe how much it cost to get it fixed??

Logical Dude

January 17th, 2013
10:35 am

Kyle,
Very good read on the difficulty in funding and the politics involved. I don’t know all the answers to fully fund our obligations to healthcare, but the solution sure shouldn’t involve bullying and / or favors.
It just seems like nothing in this state can be done without someone being steamrolled, or someone getting overly compensated (read: corruption).

Dusty

January 17th, 2013
10:40 am

md

I applaud your stand for personal responsibility. It seems that many here expect “thje government” to pay their bills. I’m afraid it is true for many, seeing how Obama won a second term with great promises for perceived “free” medical care. His election certainly could not be for a successful first term considering the fiscal state of the USA.

Anyway, keep up the good work.

Hillbilly D

January 17th, 2013
10:40 am

We can argue about this all we want but the real problem is rising health care costs. As long as the costs keep going up, which they will for the foreseeable future, this problem is going to be with us.

Dusty

January 17th, 2013
10:54 am

UIC 10:33

What? Kyle said not one word about Wastern Europe, obesity or anything else you brought up.

Wherefore goeth thou?

Jose

January 17th, 2013
11:04 am

Legalize marijuana and half of the bed ridden zombies that are now strung out on big pharma opiates will be able to get up, walk around, and possibly return to a normal life.

Dusty

January 17th, 2013
11:07 am

Hillbilly,

The costs of heathcare certainly keep going up. The more the demands the more the cost. Demands come from government regulations, , insurance(liability) and the cost of even better medical care and medication. .

There is nothing cheap in the way of medical equipment, sanitary precautions and professional education. To minimize any of those gives poor medical care.

Not to say, there are no ways to get a better system.

By the way , Hillbilly, I hope you don’t have snow and ice tonight. Surely is gray in Atlanta.

.

Lil' Barry Bailout - OBAMAPHONE!!!

January 17th, 2013
11:08 am

Just like opposing Obamacare’s requirements that everyone exibit personal responsibility and possess health insurance
———-

Demanding that your neighbors pay for your health insurance is the exact opposite of personal responsibility.

Lil' Barry Bailout - OBAMAPHONE!!!

January 17th, 2013
11:09 am

When does Obozocare start “bending the cost curve down” as promised?

Jose

January 17th, 2013
11:15 am

Taxpayers should not be subsidizing bunk drugs with countless side effects sending people to the emergency room. Legalize marijuana and save a boat load of Medicaid money.

Jose

January 17th, 2013
11:18 am

Most of the high cost drugs have side effects that are treated with other drugs. It is a vicious cycle. Legalize something that is safer than asprin and tell the feds where to go with their gun and drug laws.

MarkV

January 17th, 2013
11:28 am

Dusty is in a rare form today.

“Get insurance out of medicine.” (@10:08 am)

No insurance, pay for the treatment you need. And if it is one of the many high cost treatments even people with a good income cannot afford, you have two choices: To die, or to let other people pay for it.

“I don’t think that the “working poor” are what is clogging Medicaid. I think it is the NON working poor and possiblhy the unemployed who are filling those ranks.”(@ 10:26 am)

Naturally, Dusty has the right to “think” whatever she prefers, whether it is true or not. But more importantly, it is the mindset that is so telling. What does Dusty want to do with the NON working poor and (possibly) unemployed, when they get sick. Again, let them die?

“Obama won a second term with great promises for perceived “free” medical care.” (10:40 am)

Since blatant lies have become a “new normal” on this blog, this one does not even surprises anymore.

md

January 17th, 2013
11:47 am

“md — your comment has nothing to do with mine at all, you just want a soapbox.”

No, it just put it in context. Each of the “working poor” are individuals and many got there and remain there by their own volition, so I’ll call it out every chance I get vs letting someone put them in a group and act like we should all carry their load.

Why should a member of the working poor be given a pass on the responsibilities of society?

Why should one be allowed to settle for a more meager lifestyle and not have to contribute to society?

If 47% are not paying any income tax, how many are in that group by choice and why should they not be required to participate?

md

January 17th, 2013
11:49 am

Thanks Dusty, just calling it like I see it and correcting those that can’t see past the end of their noses.

We choose everything we do, and I get tired of those that don’t want to take responsibility for those choices…….

Don't Tread

January 17th, 2013
12:06 pm

Maybe we can mint a special quadrillion-dollar “Medicaid” coin, deposit that into the fund, tax it, then distribute the money to all that want it. (Of course, no ID or proof of citizenship required, because that would be racist.) Free healthcare for all! :roll:

Dusty

January 17th, 2013
12:11 pm

AH dear MarkV

Here with his propensity to use the word “lies”. I mean “blatant” at that. Somebody must have stepped on his toes.

True, I doubt that insurance will ever get out of medical care.. But insurance companies are making fortunes and obviously it is a profit making procedure, not a goodwill effort for anyone. But liability insurance has caused doctors great expense because lawyers have pushed every claim no matter how trivial some are. Lawyers are looking for people who can make claims. Watch your TV advertisements if you do not believe that..

Medicaid is not working well and will soon kill itself from lack of proper regulation. It has stumbled from Fed to State to Fed until it ends up with the mess such as Kyle has described, the crazy “bed tax’. We can do better than that for the poor.

Have you ever heard of Grady Hospital? It runs from a congomerate of funds. I think with some thought to a combination of private AND public funds can be better organzied without the total direction of government. ObamaCare is placing your choices for treatment under the rule of government, not the people who pay for it or those trained to do it

Unlike you, I do not believe that government can do EVERYTHING better than anyone. That decisions must all be delegated to the government to make for you. No way. I believe there is something better for the poor than government control. Do you not realize that is a form of slavery? That we have fought wars to get away from kings and slaves?

If you don’t believe that, then you are not in agreement with the foundation of this country and that is freeedom in all forms. Do what you want but don’t take my freedom away to do it.

. .

MarkV

January 17th, 2013
12:27 pm

Dusty @12:11 pm

Dear Dusty,

Sorry, but I call things what they are. If you can document that President Obama promised free health care, please do it and I will apologize.

“But insurance companies are making fortunes and obviously it is a profit making procedure, not a goodwill effort for anyone.”

I am extremely pleased that you recognize the need for non-profit universal health coverage, i.e., the so called “single payer system” or “public option.”

“ObamaCare is placing your choices for treatment under the rule of government, not the people who pay for it or those trained to do it.”

And how does ObamaCare do that? By having a group of professionals advising about what is
effective and what is not? How do you exactly imagine that to be done otherwise? Leaving it up to every individual provider to decide everything, even if it is based on his/her monetary advantage, and just let the patient pay that? Or do you naively believe that that does not happen?

Lil' Barry Bailout - OBAMAPHONE!!!

January 17th, 2013
12:33 pm

Are we free to opt out of Obozocare and provide for our own health care needs? We are not. Obozocare makes us less free. But of course, not as much as the liberal fascists would prefer.

md

January 17th, 2013
12:36 pm

“By having a group of professionals advising about what is effective and what is not?”

And who here believes those professionals won’t be chosen because of their ideology? And that is where the problems come in…….

middle of the road

January 17th, 2013
12:43 pm

“Are we free to opt out of Obozocare and provide for our own health care needs? We are not. Obozocare makes us less free.”

Yes, it makes you less free. In order to give you (and me) total freedom, if you chose not to buy insurance, then needed medical care and could not demonstrate an ability to pay, then you should be put on the curb AND ALLOWED TO DIE! That is freedom.

Thulsa Doom

January 17th, 2013
12:43 pm

This is similar to rising costs in higher education due to ever more govt subsidies. The more the govt gets involved and the more the govt subsidizes something the higher the costs rise.

Rafe Hollister preparing for an Obamanist America

January 17th, 2013
12:54 pm

As long as government is involved in health care, we are not going to get high quality healthcare at rock bottom prices. When some entrepreneur has to deal with a “certificate of need”, before he can open a hospital and a person can not buy just the medical insurance they need, but must buy a one size fits all policy approved by and limited to the state the individual lives in, we have scuttled the free enterprise system for some nether region somewhere between total socialism and ineptitude. Seems we need to decide, total socialist medical care and accept the rationing, poor care, and shrinking amount of medical professionals, or do the preferable thing of getting the government out of the way and let the free enterprise system fully function.

Lil' Barry Bailout - OBAMAPHONE!!!

January 17th, 2013
12:59 pm

Yes, it makes you less free. In order to give you (and me) total freedom, if you chose not to buy insurance, then needed medical care and could not demonstrate an ability to pay, then you should be put on the curb AND ALLOWED TO DIE!
———-

The moochers aren’t buying health insurance. That’s the big lie of Obozocare.

MarkV

January 17th, 2013
1:14 pm

md @ 12:36 pm

“And who here believes those professionals won’t be chosen because of their ideology? And that is where the problems come in…….”

Please define the ideological question in what is effective in treating cancer, diabetes, heart disease …

Lynnie Gal

January 17th, 2013
1:24 pm

This is a stupid argument to have in our legislature, when our governor turned down BILLIONS in aid from the Federal government to expand Medicaid and help hospitals cover their costs. Our state government is run by a gang of backward hillbillies who can’t agree on anything other than to hide tax increases so they don’t look like tax increases and turn down money for our state so they can say they cut spending. Georgians need to have their head examined (which will require health insurance) if they vote these homeschooled hillbillies back in office in 2014.

Thulsa Doom

January 17th, 2013
1:35 pm

“This is a stupid argument to have in our legislature, when our governor turned down BILLIONS in aid from the Federal government to expand Medicaid and help hospitals cover their costs.”

Naw. What is stupid is when someone thinks all that Federal money is just free money that never has to be repaid by the same taxpayers. Its more debt that we have to pay back in the form of taxes on the Federal side of the ledger. Jeez.

middle of the road

January 17th, 2013
1:38 pm

“The moochers aren’t buying health insurance.”

True. All those people who make good money, don’t buy health insurance, and then don’t pay for their medical care when they inevitably receive it – they are MOOCHERS. Even if they make $100,000 per year. You and I and the rest of the insured pay for their care with our higher hospital bills and higher insurance premiums.