ICYMI: Republicans’ Budget Plan Could Increase Your State Taxes

WASHINGTON, DC — One major consequence of the Republican’s pro-billionaire budget scheme could be a higher state tax burden for millions of Americans, per reporting from POLITICO. In addition to cutting federal funding for Medicaid and increasing the cost of healthcare for all 50 states, Republican lawmakers want to block states from raising funds by taxing insurers and healthcare providers. 

Per POLITICO: 

“To qualify for federal Medicaid dollars, states must also kick in their own matching funds. GOP lawmakers want to stop states from taxing insurers and health care providers to raise that money, a maneuver that would leave states with a $612 billion hole in their budgets over the next decade…

“Medicaid is funded jointly by states and the federal government. States can draw upon a variety of funding sources, including their general funds. States have used the provider taxes to juice their federal matching funds since the mid-1980s. 

“Barring states from drawing federal matching funds for the taxes would hit red and blue states. Every state except for Alaska levies provider taxes…

“Advocates for Medicaid patients say Republicans are wrong to call the taxes abusive.

“‘This is just an attempt to cut a critical source of state share that states use by inaccurately calling it money laundering to disguise a cut to Medicaid,’ said Joan Alker, executive director and co-founder of the Center for Children and Families at Georgetown University, during a media briefing on Tuesday…

“‘States would have to make difficult decisions about how to fill the gaps, including raising taxes on residents, reducing eligibility for some Medicaid populations such as children, elderly, or disabled individuals, or reducing Medicaid benefits,’ said the American Hospital Association in a statement.”

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