The issue
Legislature must act to reduce health costs
Health insurance costs too much in Wisconsin. The Wisconsin Legislature must seize the opportunity to capture $400 million in additional federal money – money that will reduce the cost-shifting that drives up insurance premiums.
Background
In his 2007-2009 budget plan, Gov. Jim Doyle proposed an assessment on hospitals as a way to capture additional federal dollars for Medicaid. The proposal followed the lead of 23 other states that successfully maximize their federal funding for Medicaid. The revenue generated by an assessment on hospitals allows states to bring in additional federal matching funds. Wisconsin now ranks near the bottom among the 50 states in the amount of Medicaid money it receives from the federal government.
Unfortunately, the hospital assessment in Wisconsin was defeated in the budget process last fall by some Assembly members who viewed the proposal as a “tax” on hospitals. Despite broad support for the plan from business leaders and hospitals, the “tax” label was difficult to overcome, and the assessment proposal was dropped in the final days of budget negotiations.
Why you should care
The Legislature’s failure to adopt the hospital assessment left in place a huge hidden tax on employers and consumers in Wisconsin. Learn more.
What now?
State officials are now struggling to cope with a looming budget deficit of up to $600 million. Special legislation has been introduced to address the budget shortfall, and the hospital assessment is a key part of the proposed solution.
By leveraging more federal money, the hospital assessment would help Wisconsin’s hospitals cover more of their Medicaid costs and thereby reduce the cost-shifting to employers and consumers. The assessment also would provide revenue to help the state close the huge budget gap.