Seven myths about Medicaid

Published 12:54 pm Wednesday, July 30, 2008


7 Myths about Medicaid

Myth #1. The plan passed by the Senate and supported by the Governor is “the hospital plan.”

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Fact #1. The plan was written by the Mississippi Hospital Association at the request of members of the Senate who set the rules – all of the money had to come from the hospitals and it had to replace all of the $90 million shortfall. The Mississippi Hospital Association has consistently supported an increase in the tobacco tax to cover the shortfall. They support the Senate plan only if it a choice between that plan and the Governor’s $360 million cuts in Medicaid payments.

Myth #2. – For every $1 in taxes a hospital pays, it receives $6 in Medicaid reimbursements.

Fact #2. The amount of money a hospital receives from the Medicaid program is not related to the amount it pays in taxes. As usual, the Governor has done some fancy (bogus) math. He has totaled up all of the Medicaid money disbursed to hospitals in Mississippi and divided it by the amount they would pay in taxes under his plan, and, eureka, calculated a 6 to 1 ratio. However, the first number is not related to the second number. Hospitals get Medicaid payments based on the services they provide to patients, not based on the amount they pay in taxes. This myth is a little like saying that every day the sun shines, there is water in the ocean. Both statements are true, but the fact that there is water in the ocean has nothing to do with whether or not the sun shines.

Myth #3. – The proposed $167.25 per patient per day tax is just a revision of the existing hospital tax that was in place until 3 years ago.

Fact #3. – The proposed tax is very different from the prior plan. Under the old plan 26 public hospitals paid the tax, and those same hospitals received additional payments from Medicaid. Under the Governor’s proposal, all hospitals will be taxed, and the payment will be spread among all hospitals. As a result, there will be winners and losers. Two public hospitals have testified that the proposal will be devastating to their facilities.

Myth #4. – The proposed tax is “fair.”

Fact #4. – We do not tax any other group of medical providers to provide matching funds for their Medicaid reimbursements. Neither do we tax highway contractors even though their contracts are funded, in large part, by federal matching funds. We might just as well tax Katrina victims who received federal grants to provide the state’s required match. It just makes no sense.

Myth #5. – The new tax will not be passed along to patients and their insurers.

Fact #5. – The Governor’s own hand picked Medicaid Hospital Advisory Committee said in their report that “hospitals will be required to pass increased tax cost and payment shortfalls onto other insurance companies and/or reduce services or jobs,” Barbour has already increased taxes on nursing homes, and those increases have been passed on to private patients.

Cecil Brown

House District 66