Health Care Tax Proposal Drawing Fire in Virginia
Struggling to balance Virginia's budget despite soaring health care costs for the poor, Gov. L. Douglas Wilder last week made a spicy proposal buried beneath a bland name.</br></br>"Shared Provider Financial Participation" is Wilder's bulky euphemism for the tax he wants to impose on most of the medical industry to help offset the state's growing spending on the federally mandated Medicaid program.</br></br>Just a few days into the 1992 General Assembly session, the Medicaid proposal already has emerged as one of the year's biggest battles. A high-stakes contest is underway pitting Wilder's legislative influence against some of the state's most powerful interest groups.</br></br>Wilder's plan would raise $68 million during the next two-year budget cycle by taxing from one-half percent to 1 percent of the gross receipts of hospitals, nursing homes and pharmacies, and putting a $200 annual surcharge on physicians.</br></br>Wilder and his advisers argue that the health care providers can absorb the tax by making their operations more efficient and modestly pinching profits. Proponents of the tax say health care profits are high in part because of rapidly escalating Medicaid payments that, unlike most state government programs, are adjusted upward to account for inflation.