The Hospital Provider Fee, a tax on medical services, is resulting in a budget crunch, but Senate President Bill Cadman said legislative attorneys maintain the fee can’t be exempt from Taxpayer Bill of Rights limits.
“There’s no ‘maybe’ in this opinion,” he told reporters Wednesday afternoon. “They said this will not stand.”
Medicaid expansion and additional people qualifying under previous standards have doubled the number of Colorado residents receiving taxpayer-funded health care in the past few years. And the federal government is reducing the amount of the expanded population it will fund from 100 percent to 90 percent by 2020.
The state will pay for the additional costs with the fee on medical services at hospitals, but that tax brings in more revenue than the state can collect under TABOR limits and may require a refund to taxpayers.
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Gov. John Hickenlooper has proposed reducing the fee to collect $100 million less next year in an attempt to avoid a refund, but the administration disputed the analysis of the nonpartisan legislative lawyers.
“We are confident that this is a fatally flawed and incomplete legal analysis,” said budget director Henry Sobanet in a written statement. “We worked with the AGs office last year, and they confirmed that nothing in TABOR prevents the legislature from following this path. The state has numerous enterprises including the unemployment insurance tax on employers.”
Cadman, R-Colorado Springs, said the state’s problem isn’t with TABOR but with increasing spending on Medicaid.
“We don’t have a budget problem,” he said, adding the state needs make cuts.
He did not name specific cuts but wanted to revisit a possible copay for Medicaid patients.