SADOW: Will The Voters Infect Louisiana With The ‘Sick Tax?’

Regrettably, Gov. Bobby Jindal recently signed into law what may not be technically a tax increase by law, but in spirit is nothing more than a geographically-restricted version of a “sick tax” that could become a self-inflicted wound across the state by 2015.

Jindal affirmed into Act 222 of 2013 SB 44 by state Sen. Ben Nevers. The law allows the city of Bogalusa to impose as high as a six percent “provider fee” onto delivery of health care services by a hospital, which applies to just one entity, Bogalusa Medical Center. The intent is for the state to be able to use this money as a basis to capture Medicaid matching funds, a large portion of the business of the state-owned hospital that soon will be contracted out for running likely to a religious nonprofit entity. This would occur only after approval by Bogalusa voters, presumably at the regular 2014 election date.

The law regards this surcharge onto gross receipts as a “fee” because it is reasonably related to the purpose it funds and given other language in the law that states “No hospital … shall pass on the cost of the provider fee or include the provider fee as an itemized and separately listed amount on any statement sent to any patient, responsible party, insurer, or self-insured employer program.” Further, “Any bill or statement sent to a patient, responsible party, insurer, or self-insured employer program after the initial effective date of this Subsection shall contain a statement that, ‘This bill does not contain any cost of the provider fee levied by the city of Bogalusa’.”

Maybe so, but that doesn’t mean the operator deliberately will forgo finding extra revenues in order to run at a loss caused by an increase of six percent in the cost of doing business, if they want to stay in business – especially when the latest annual data showed the facility lost 7.5 percent on revenues. The look-in by the hospitalist, every aspirin popped, the daily room rate, all and more will inch up in price disguised as the regular cost of business, not a separate line item and regardless of the statement. That about half of revenues already come from Medicaid and another 16 percent from Medicare doesn’t mean for the other third won’t find a way to get passed on to consumers.

That means out of pocket costs go up and insurers raise rates to absorb the higher charges, so not just patients there but all health care insured in the state pay. It’s nothing more than subterfuge harkening back to the disastrous experiment that lasted all of three months by Gov. Kathleen Blanco who rammed the same idea in law, only to see it blow up quickly when its cost-shifting nature became all too obvious in the wake of the hurricane disasters of 2005.

But the worst may be yet to come. HB 532 by House Speaker Chuck Kleckley, also passed this session, creates the potential to spread (it will require future enabling legislation) the concept statewide that also will require a vote of the (state’s) people in order to enact it (into the Constitution, which would take precedence over Act 222 yet courtesy of the act already have the enabling legislation in place). This extra revenue raised by government will be passed on to all but the state’s indigent regardless of whether they are admitted to a hospital of any kind.

There’s no justification for this except that the state wanted to grab extra revenues for Medicaid purposes to leave more general funds dollars available. And it’s entirely fictitious to think all of that only will come out of providers’ pockets. Jindal can’t stop a constitutional amendment attempt like HB 532 but he should have vetoed what will take more money from the people and transfer it to government even though the cost of government overseeing that has not changed. Now only voters understanding the ultimate costs to them can stop this bad law and what may follow from success of the amendment.

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