Under the Dome column: What to do about the state’s hospital provider fee
Under the Dome
Debate over the “hospital provider fee” continues to heat up as this year’s Colorado state budget problems unwind. From its inception there has been a debate over whether the “fee” is actually a tax and should have been considered such at its creation. Even though it has been considered a fee its associated revenue counts toward the total TABOR (Taxpayer Bill of Rights) revenue limit.
The governor recommends draconian cuts to education to balance next year’s budget. He proposes moving the hospital provider fee into an enterprise and exempting it from the TABOR limit as a solution. While such a move would give some temporary TABOR relief in years that tax and cash fund revenues exceed the TABOR spending limit, it won’t make much of a dent in the long term needs of K-12 and higher education or the need for more spending on transportation.
The hospital provider fee is a part of the larger issue of funding for health care costs, driven by the expansion of Colorado Medicaid in 2013 and expansion of other benefits over the last several years. In my opinion, expanding Medicaid coverage up to 20 percent of the population should not have been done without an adequate mechanism to pay both hospital costs and individual medical service providers. The hospital provider fee should have been called a tax at its creation in 2009. And then in 2013, when the Legislature took on Medicaid expansion and the need for spending in the future, including predictable growth of the hospital provider fee, more new taxes were needed to pay for new promises. New taxes require a vote of the people under the constitutional requirements of TABOR.
In many medical specialties today, providers must incur losses or raise rates to private clients and insurance in order to see Medicaid patients. Primary care doctors especially need increased rates. While these providers may have been absorbing losses prior to the expansion of Medicaid, most are under tremendous stress to see the increased number or patients after the expansion.
So perhaps there should be a ballot initiative next year to ask the voters if they desire to move the hospital provider fee to an enterprise and also pay for increased rates to medical service providers under Medicaid, relieving the “crowd out” within the Colorado budget for education and transportation.
But that ballot initiative should also be part of a larger or longer range plan to connect multiple problems in Colorado’s revenue and spending formula. To be continued.
“Under the Dome” appears on the second Tuesday of the month. State Rep. Bob Rankin, a Carbondale Republican, is in his second term in the state Legislature representing House District 57, which includes Garfield, Rio Blanco and Moffat counties.
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