Medicaid reimbursement fell to 52 cents for every dollar it cost hospitals to care for a Medicaid patient in 2005. That year, WHA worked to address the Medicaid reimbursement issue by mounting an advocacy campaign aimed at educating policymakers and the public about the significant shortfall in Medicaid payments to hospitals. Dubbed the “hidden health care tax,” the term became synonymous with the cost shifting that occurs when government payers do not cover the cost of the health care provided to program beneficiaries.
Partnering with Wisconsin Manufacturers and Commerce, WHA relied on paid and earned media to make the public aware of the “hidden tax” and relied on shoe leather in the state Capitol, going door to door to address myths surrounding Medicaid.
For example, although Medicaid costs had increased in recent years, that growth was not the result of increased provider reimbursement but, instead, the result of more people enrolled in the program. In fact, enrollment had increased by 87% over the previous five years. The increased enrollment was largely due to the Governor and Legislature creating or expanding Medicaid programs like BadgerCare and SeniorCare.
The Hidden Health Care Tax on Wisconsin employers has continued to grow to over $1 billion a year. Wisconsin’s BadgerCare program now pays 66% of the cost of hospital care for patients, with the unpaid costs shifting to private payers. According to recent research, in some areas of Wisconsin, the cost of government cost shifting can be about 30% of the price paid by commercial health insurers for hospital care. The Hidden Health Care Tax, which rivals other taxes paid by Wisconsin families and businesses, can have a significant impact on the cost of doing business in Wisconsin.
In 2004, now WHA President and CEO Eric Borgerding was quoted in the Milwaukee Journal Sentinel
, “There’s not a road builder in the state that would build a road for cost, let alone 40 percent less than cost.”
This week, Borgerding noted, “WHA appreciates the Governor’s and the Legislature’s commitment to Wisconsin’s community hospitals. During the last budget, the Disproportionate Share Hospital (DSH) and the Rural Critical Care Supplement (RCC) programs recognized those hospitals that serve most of the state’s Medicaid patients and, thus, have a larger share of the Medicaid program shortfall.” Reminded of the hidden health care tax effort in 2005, Borgerding observed, “We have the same situation now. In the upcoming state budget, without at least maintaining the DSH and RCC payments, in effect, there will be an increased tax on Wisconsin businesses and families.”
To learn more about the Hidden Health Care Tax, see WHA’s website.