Phoenix Tax Law Blog

Arizona Taxes Hospitals Statewide to Benefit Medicaid

Arizona governor Jan Brewer made national headlines when she announced she would move to raise state taxes to benefit the Medicaid program in conjunction with the new federal health care law.

A notable Republican, Jan Brewer is being as the first governor to publicly devise a method to fund the newly instituted Medicaid expansion. In contrast, California Gov. Jerry Brown, one of many noted supporters of the new federal mandate, has yet to create a plan to support the boost in Medicaid.

Brewer intends to raise the funds by taxing hospitals. Her ‘provider tax’, once applied to hospitals statewide, would add about 300,000 low-income state citizens to the Medicaid program. This model is already instituted in nearly ¾ of the US, but no states are applying funds to similarly support Medicaid.

Arizona is in a unique situation, a situation that will feature large costs from the onset due to how the existing plan is modeled. Those close to the situation are indicating Arizona will require new funding immediately while many other states will not.

Brewer’s plan already has many supporters among Arizona hospital executives. Many hospitals statewide are left with millions of dollars in uncompensated care annually, providing a logical conclusion to increased taxation for Medicaid.

Posted in State Taxes |