N.C. Democrats Float Doctor Tax

Democratic leaders in the state legislature are considering the idea of a new tax on hospitals and doctors’ offices to help make up for their incompetence in setting a state budget that has once again fallen into a deficit. The new taxes will almost certainly raise the costs of health care for working families in North Carolina.

The Legislature socked it to retail customers, smokers, drinkers and big earners with higher taxes last year to help close a budget gap calculated by Democrats at more than $4 billion.

Could hospitals or doctors’ offices be next?

Legislative leaders are returning to Raleigh early to begin adjusting the second year of the state’s two-year budget and they’re intrigued by a hospital or provider tax or fee because it could draw down three times as much extra money in federal matching funds for Medicaid.

It’s one of several options they’ll examine to help close another budget gap starting July 1 that ranging from $700 million to $1.2 billion. Medicaid, the state-federal health care program for the poor, is on track to be $475 million over budget in North Carolina next fiscal year as more — and apparently sicker — patients enroll, legislative staff members told budget-writers last week.

“It’s worth considering,” said Senate Majority Leader Martin Nesbitt, D-Buncombe. …

Hospitals already are giving up plenty to the state — their financial losses for treating Medicaid patients alone have gone up 50 percent between 2006 and 2008 to $411 million and for charity care up 77 percent, North Carolina Hospital Association spokesman Don Dalton said. Federal law prevents guarantees that each hospital would recoup the tax, leading to the possibility hospitals with small percentages of Medicaid patients would give up more from the tax than taking in higher rates. …

Republicans, the minority in the Legislature, have been attacking the majority for the broad-based tax increases approved last year, instead of prioritizing spending, to balance the budget. …

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