One of the more ridiculous ideas to emerge in the lame-duck negotiations is limiting or eliminating states’ ability to levy medical provider taxes to pay for Medicaid.
CBPP has you covered on the details, but this is basically a giveaway to medical providers like hospitals and doctors that has nothing to do with deficit reduction or the fiscal cliff.
Health care providers are the biggest culprit behind health care price inflation, not insurance companies. Any policy change that reduces Medicaid or Medicare’s market power to push down provider prices is going to raise premiums. If states cut Medicaid eligibility or otherwise trim their Medicaid rolls because Congress takes away their ability to levy medical provider taxes, health care prices are going to go up faster.
This smells like the sort of proposal that Allyson Schwartz would normally quietly vote with the Republicans on, so we’ll be watching closely to see where she comes down.