Post date: Wednesday, Jul 25, 2018

By Janet Silversmith

Although the 2019 Legislature won’t convene for another six months, Minnesota physicians and other health care providers should be paying attention now.   

Under current state law, the 2 percent “provider tax” will sunset at the end of 2019. The state, however, is unprepared to define how to fill the more than $600 million annual revenue gap that will occur when the tax expires. The revenue currently generated by the tax is used to finance critical public programs and services – MinnesotaCare; Medical Assistance; state health care research and analysis; and, investments in public health and medical education. Not willing to wait for the state to act, last Monday (July 16) the MMA Board of Trustees decided to commit organizational resources and leadership to identify and advance viable alternative funding.

Since enactment of the provider tax, the MMA has consistently made the repeal of the provider tax a high priority on its legislative agenda. We led the call for its repeal, which legislators enacted in 2011 (with a 2019 effective date). At the same time, the MMA supported: the creation of MinnesotaCare; the Medical Assistance expansion as authorized by the Affordable Care Act (ACA); modifying MinnesotaCare to a Basic Health Program as defined by the ACA; state loan forgiveness programs; and, state investments in public health, research, and education. Unfortunately, the MMA’s loud calls for repeal of the tax often overshadowed the MMA’s underlying support for the programs it helped finance.

The planned loss of the provider tax revenue demands preparation now and action by the 2019 Legislature. The options are straightforward – 1) keep in place the 2019 sunset of the tax and cut the programs that rely on its revenues; 2) repeal the planned sunset and reinstate the provider tax; or, 3) identify alternative revenue to sustain current programs. For MMA, the choice is simple – option #3.

Since the tax was enacted in 1992, few have hailed it as an ideal mechanism to finance health care for low-income Minnesotans. Yet it has become a source of revenue upon which many policymakers rely and that a variety of health care stakeholders have come to accept. Much has changed in health care since 1992, however. The MMA believes that now is the time for Minnesota to update its approach to health care financing and move beyond the flawed provider tax – a tax that has generated passionate opposition and has splintered support for health care coverage for thousands of Minnesotans.  

The MMA plans to offer legislators a viable alternative. I look forward to sharing our plan later this year and hope that you will join our efforts to preserve health care coverage for low-income Minnesotans with a financing mechanism for the 21st century.

Silversmith is the MMA’s CEO.

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