Lawmakers are discussing legislation that could reduce Missourians’ health care costs. That legislation is Medicaid reform. Lawmakers’ decisions will determine whether Missourians get relief or whether the “hidden heath care tax” will skyrocket in Missouri.
The “hidden health care tax” results from cost shifting in health care. Underpayment for care provided by government programs and the cost of the uninsured are subsidized by higher payment rates for Missourians with health insurance. These subsidies —costs shifted from one set of patients to another — constitute a “hidden health care tax” on commercial premiums.
“Few Missourians realize the high cost they pay for caring for the state’s uninsured and underinsured,” said Herb B. Kuhn, MHA president and CEO. “Medicaid reform provides an opportunity to reduce the cost shift to insured Missourians. It will lead to lower costs for businesses that provide health care benefits and more money in individuals’ wallets.”
The trend in uncompensated care is alarming. Growth in uncompensated care exceeded 90 percent between 2002 and 2011. Throughout the past decade, Missouri’s hospitals provided $10.5 billion in uncompensated care —$1.3 billion in 2011 alone. Without Medicaid reform, uncompensated care costs could grow to $3.5 billion annually by 2019. However, Medicaid reform would help offset much of the expected growth in uncompensated care costs between 2014 and 2019.
Without Medicaid reform, Missouri businesses and individuals could experience significant new cost shifting. This would harm the competiveness of Missouri businesses and reduce the earnings of individuals. Although no fan of the Affordable Care Act, the Missouri Chamber of Commerce and Industry supports Medicaid reform because it realizes that the cost of the uninsured will be borne in large part by employers who provide health insurance benefits.
“The last thing Missouri employers need right now is another tax … especially one that could be as significant as this hidden tax would be,” asked Dan Mehan, president and CEO of the Missouri Chamber of Commerce and Industry. “Instead, we urge lawmakers to protect Missouri employers by passing responsible Medicaid expansion legislation and bring Missouri’s hard-earned federal tax dollars back to our state.”
Missourians are sensible and fiscally conservative. In 2013, Missouri’s low tax burden allowed it to rank 37 in the Tax Foundation’s Tax Freedom Day® ranking — 10 days ahead of the national average and one day before Kansas.
“Missourians may not see the ‘hidden health care tax’ on any forms they submit, but the cost shift is real,” Kuhn said. “April 15 may be the tax deadline that we think about annually, but the deadline to reduce the ‘hidden health care tax’ for next year is May 17 — the final day of the legislative session.”