five reasons to let it expire 18 provider tax one pager... · $70.3 $9.0 $2.4 fy 18 hcaf...

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MinnesotaCareProviderTax

FiveReasonstoLetitExpireTheprovidertaxisa2%grossrevenuestaxonservicesprovidedbyphysicians,dentists,chiropractors,andotherpractitionersaswellasonhospitals,surgicalcentersandwholesaledrugdistributors.Thetaxwassignedintolawin1992forthesolepurposeoffundingtheMinnesotaCareprogram.

1. The2019sunsetoftheprovidertaxwasagreedtoin2011aspartofnegotiations.ItsexpirationwillsignificantlyreduceHealthCareAccessFund(HCAF)revenue,whichhasbecomeaslushfundsustainedbytaxesonthesickandinjured.

2. InFY2018,theMNcareprogramwasfundedbytheFederalBasicHealthProgramFunding(89%),EnrolleePremiumsandCostSharing(8.8%)andtheStateofMinnesota(2.1%).Ofthe$414millionspentonMinnesotaCareinFY2018,aminoramount—roughly$9million—camefromtheHCAF.

3. FY2016HCAFrevenueswere$717.7millionincluding$598.5millionfromthe2%providertax.GeneralFundandSpecialRevenueFundprogramsreceivedroughly$682millionandStateAgenciesreceivednearly$66millionfromtheHCAF.

4. Accordingtothe1992MinnesotaCareandProviderTaxlaw: Sec.21.[FEDERALWAIVER;HEALTHCARERELATEDTAX.]

ThelegislaturefindsthattaxesimposedbythisarticlearenotsubjecttoorinviolationoftherestrictionscontainedintheSocialSecurityActorotherfederallaw.Thetaxisimposedsolelytofundastateprogramandisnotusedtopaythestateshareofmedicalassistance.

5. WiththemajorityofMinnesotaCarefundingcomingfromothersources,thesunsetoftheprovidertaxshouldberetained,notrepealed.Thesunsetofthistaxwillleadtoa2%reductionincosts,reducedadministrativeburdenforpractitionersandfacilities—andanendtotheunfairtaxationofpatients.

Diagrams:(seeotherside)

Graph1–FY2018HCAFRevenue

Graph2–FY2018HCAFExpenditures

Graph3–FY2018MinnesotaCareCosts

Provider Tax Used for Slush Fund, Not MNCare

(Revenues and Expenditures shown in millions)

*Graphs do not include tax refunds or pass-through funds (BHP + Enrollee Premiums)Source: Health Care Access Fund, February 2018 Update, MMBGraphic Created by Citizens’ Council for Health Freedom

$658.4

$101.2

$33.8

FY 18 HCAF Revenues

2% Provider Tax

1% Gross Premium Tax

Misc

$507.2

$214.0

$70.3

$9.0

$2.4

FY 18 HCAF Expenditures

General FundSpecial Revenue FundState AgenciesMNCareMisc

89%

8.8%

2.1%

FY 18 MNCare Costs

Federal

Enrollee Premiums

State

FY 2018