NH grapples with the end of a 20-year old budget gimmick

By   /   May 14, 2013  /   No Comments

By Grant Bosse | New Hampshire Watchdog

The Josiah Bartlett Center for Public Policy, New Hampshire’s free-market think tank, today released a new study on the state’s twisted history under the Medicaid Program. Meet the MET: New Hampshire budget writers grapple with a brand new tax that’s been around for 20 years details the history of the Medicaid Enhancement Tax, how the current budget increased tax liability for New Hampshire hospitals, and how unrealistic revenue estimates could ruin Gov.Maggie Hassan’s budget proposal.

“For the last two decades, the MET wasn’t a real tax, so budget writers didn’t pay close attention to how it worked,” said Grant Bosse, the study’s author. “By better understanding the mechanics of this complicated revenue stream, they can ensure that MET misunderstandings don’t blow a multimillion dollar hole in the state budget.”

Since 1992, New Hampshire has taxed hospitals under the MET, and then refunded the money in order to qualify for federal matching funds. The practice, known as MediScam, ended in the current budget, but left hospitals with a tax bill that they had been never really had to pay. MET revenues are at the center of the current budget fight, with House and Senate estimates off by nearly $200 million.

Read the complete story at New Hampshire Watchdog.