Proposals for a so-called “sick tax” on hospitals used to be a non-starter in Utah.
But the idea gained favor in 2010 as a means to help the recession-starved state cover the costs of treating the poor. Now hospitals, once opposed to the bed tax, are pushing a bill to reauthorize it for another three years.
Money generated by the tax is used to backfill state funding cuts to the low-income Medicaid – money needed to draw down federal funding.
“There’s no windfall for anybody,” said Rod Betit, president of the Utah Hospital Association, which requested the extension.
SB166 won’t raise new money, said Betit. “It’s just to continue what we’re doing now.”
The tax raises about $154 million and accounts for about one-third of hospitals’ Medicaid budgets.
As the economy and the state’s budget outlook improve, hospitals hope to see the tax reduced and replaced with state revenue.
But for now, said Betit, “it’s a better place to be than losing 30 percent of our Medicaid reimbursement.”
SB166 was unanimously approved Thursday by the Senate House and Human Services committee and placed on the Senate consent calendar.