With the state facing serious financial troubles and Democrats unwilling to cut programs to limit the size of state government, the only other option left for them is to increase taxes. Already this year, we have seen Governor Culver underfund schools and local governments in his initial budget, which forces cities, counties, and school districts to increase property taxes in order to meet their budgets. Now, Senate Democrats have set their eyes on the pocketbooks of elderly Iowans who live in nursing homes.
Senate Study Bill 1179 will increase taxes by $35 million under the guise of securing additional federal Medicaid matching funds, according to State Senator David Hartsuch, MD. Hartsuch says Senate Democrats removed key protective language, allowing these funds to be used for other purposes, thus jeopardizing the basis for tax.
“This bill offers no assurance that these tax revenues will be used for their intended purpose. It is cruel to impose a special tax on nursing home residents which will be used to feed government’s addiction to spend,” said Hartsuch.
According to Hartsuch, Iowa’s nursing homes have been suffering from low Medicaid reimbursement rates. In 2007, Senate Republicans offered an amendment to the cigarette tax bill which would have raised Medicaid reimbursement rates, but this was rejected by Senate Democrats who have not made long-term care a priority.
In an attempt to garner additional federal Medicaid dollars, industry leaders have been pushing for a provider tax on nursing homes. Senate Study Bill 1179 proposes a “quality assurance fee” of an unspecified amount. It is anticipated that the fee will initially will be set at 3% of nursing home residents’ costs and would amount to nearly $2,000 per year for a resident paying $180 per day. This could go up to 6.5% or $4,270 per year.
Senator Jim Seymour voted against the bill in subcommittee. Seymour, a retired hospital administrator, said, “This additional tax will exhaust the limited resources of private pay nursing home residents sooner and will drive more individuals to become more dependent upon Medicaid.”
Senator Hartsuch added, “As it stands now, this is nothing but a granny tax. The Democrat Senators should be ashamed of taxing our most vulnerable Iowans in order to feed their urge to overspend.”
The bill is now headed to the Senate Ways and Means Committee. Hartsuch has started an on-line petition against the bill. You can read and sign the petition by clicking here.
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