House Speaker Supports Health Care Provider Tax

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(Host) House Speaker Shap Smith says he supports Governor Shumlin’s plan to raise $30 million dollars in new health care provider taxes to help balance next year’s budget.

Smith says that while many other states use the taxes to fund the overall operations of state government, Vermont dedicates the revenue exclusively to health care programs.

VPR’s Bob Kinzel reports:

(Kinzel) For years, so called health care provider taxes have given the state a way to draw down millions of dollars from the federal government to help fund the state’s Medicaid program.

Here’s how it works. For every dollar the state raises by taxing hospitals, nursing homes and managed care companies, the federal government sends the state a dollar sixty.

Shumlin wants to add dental care to the provider tax list to help raise an additional 6 million dollars.

Speaking on VPR’s Vermont Edition, House Speaker Shap Smith said he supports the plan because money from the tax will also be used to boost Medicaid payment rates for dentists:

(Smith) "One that’s sort of been lost in this debate is that while we are raising$ 6 million through a dental provider tax, we’re actually driving $6 million back into reimbursement rates to the dentists through Medicaid reimbursement. So we are actually raising $6 million …it draws down another $9 million, so it’s $15 million total. $6 million of that $15 million ends up going right back into reimbursement rates to dentists for their Medicaid patients."

(Kinzel) Smith says it’s also important to remember that Vermont uses the revenue from the health care provider tax only for health related programs.

(Smith) "There’s no doubt that it raises revenue. Now, the unusual thing that Vermont does with regard to its provider taxes that many other states who do provider taxes don’t do is we actually drive that money back into the health care system. So in many other states they actually use the provider tax to generate money for the General Fund, and they don’t actually drive it back into the health care system."

(Kinzel) The Vermont State Dental Society opposes this tax plan because it says its members and their patients are being asked to subsidize the Medicaid program.

The full House is expected to debate this issue by the end of the month.

For VPR News, I’m Bob Kinzel in Montpelier.

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