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GOP takes aim at hospitals with competing health care measure

Republican lawmakers angry at a proposed ballot initiative backed by Arizona hospitals that would raise taxes for the wealthiest residents to pay for some health care programs are fighting back by proposing to instead tax hospitals and other providers.

The Republican proposal is scheduled to be heard in the Senate Healthcare and Medical Liability Reform Committee April 7 as a strike-everything amendment to HCR2017. House Majority Whip Andy Tobin, who is the sponsor of the underlying legislation and is spearheading the provider tax amendment, said Republicans are opposed to the hospitals’ proposal to increase income taxes.

“That doesn’t sit very well with us,” he said.

Details of the proposed tax on doctors and hospitals were not available, as the amendment had not been finalized.

The planned ballot initiative from the Arizona Hospital and Healthcare Association would increase the income tax by one percentage point for taxpayers who earn more than $150,000 annually or $300,000 jointly.

A fact sheet distributed by AHHA to some lawmakers says the initiative would fund the KidsCare health insurance program, which lawmakers eliminated in the fiscal 2011 budget; a program that offsets losses incurred by rural and critical access hospitals; disproportionate share payments, which is supplemental funding given to hospitals that serve large numbers of uninsured patients; and the graduate medical education program.

Revenues collected beyond what it costs to fund those programs will be given to AHCCCS, the state-run health insurance program for low-income Arizonans, to pay a portion of the costs for ensuring adults who earn less than the federal poverty level.

In 2002, voters approved Proposition 204 and raised the eligibility standards from 34 percent of the poverty level to 100 percent. But the budget recently passed by lawmakers will cut the funding for that expanded population beginning in January.

John Rivers, CEO of the hospitals group, said the initiative would raise $144 million in its first year, with $95 million going toward Proposition 204 population.
However, legislative budget analysts estimate it will cost nearly $900 million to insure those people in fiscal 2012.

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