ATR Urges Virginia Lawmakers to Reject Hospital Bed Tax and ObamaCare Expansion

Submitted by pblair on Tuesday, February 20th, 2018, 3,53 PM

Today, in a letter to Virginia lawmakers, ATR President Grover Norquist urged the House of Delegates and state Senate to reject a proposal which would both raise the health care/hospital "bed tax" and expand Medicaid for able-bodied adults in the Commonwealth. This significant expansion of ObamaCare in Virginia would expand the pool of individuals who qualify for taxpayer-funded health care by more than 300,000 for those who make up to 138 percent of the federal poverty level. 

It should be noted that the House-passed plan does institute a work requirement, a change causing headaches at groups like Families USA who prefer expansion without any accountability

In the letter to lawmakers, Grover explains:

"Medicaid expansion has cost states two and a half times as much as promised, according to a report released this month by the Foundation for Government Accountability. Expansion per-person costs have exceeded original estimates by 76 percent. Total Medicaid expansion cost overruns have cost taxpayers 157 percent more than expected. These overruns will saddle Virginia taxpayers billions of dollars more than expected.

In Virginia, Medicaid accounted for more than 60 percent of General Fund spending growth over the last decade. Across the country, Medicaid expansion has caused Medicaid spending as a percent of budgets to go from one in four dollars to one in three. Expansion will either result in future tax hikes or cuts to other priorities, including transportation and education." 

The proposal also games the federal Medicaid system by raising the health-care provider tax, referred to as the "bed tax." This gimmick takes advantage of new revenue on health care providers, counts it as state spending, and qualifies it for a spending match from the federal government. This needless cash grab drives up the cost of health care and assumes that the federal government will never reduce the cap on health-care provider taxes which qualify for a federal match. Grover notes:

"Hoping that the federal government will maintain its promise to fund 90 percent of expansion costs in perpetuity is an assumption made by those with a fundamental misunderstanding of reality about Washington, D.C. and its debt obligations. If Virginia expands Medicaid, there is no turning back. The state will eventually be on the hook for billions. 

The letter concludes: 

"Last October, House Speaker Kirk Cox said, “It’s a simple proposition: if you cannot afford your mortgage payment, you don’t build a new addition to your house… It would be financially irresponsible to ask taxpayers to fund the massive expansion contemplated under the Affordable Care Act.” I agree. It was reckless then and is reckless today. 

ATR urges the legislature to reject Medicaid expansion and a new bed tax. Lawmakers should pass work requirements and focus on reforms that drive down costs instead of trying to game the federal Medicaid system." 

Click here for a copy of the letter.