ST. PAUL – Minnesota House Republicans hosted a press conference this week to urge the new Democrat House majority and Gov. Tim Walz to not raise health care costs on Minnesotans by restoring a 2-percent tax levied on most patient services in Minnesota.
The so-called sick tax applies to procedures such as baby deliveries, chemotherapy treatments, routine doctor visits, emergency room visits, and more. The tax, which was eliminated as part of bipartisan legislation passed by a Republican-controlled Legislature and signed into law by Gov. Mark Dayton in 2011, is set to expire starting Jan. 1, 2020. In total, restoring the tax would result in a more than $600 million increase on health care costs for Minnesotans next year alone.
“Medical services are exempt from taxation in Minnesota, so it’s hard to accept that the sick tax was ever added to our state’s tax policy,” said Rep. Chris Swedzinski, R-Ghent. “Continuing it should be out of the question, especially when we have a $1.5 billion state budget surplus. Let’s just use common sense and acknowledge that you don’t lower health care costs by raising health care taxes.”
Recently, Walz called it a “nonstarter” to end the tax, and House Health and Human Services Finance Division Chair Tina Liebling, D-Rochester, said it was “essential” to restore the tax or replace its revenue.
Last year, numbers from the Minnesota Department of Human Services budget director indicated that Minnesota is losing tens of millions of dollars per month by failing to implement periodic data matching, which helps verify program eligibility for Minnesota public programs. The DHS has acknowledged that fraud within the childcare assistance program is a “big problem,” costing the state tens of millions of dollars, and the non-partisan legislative auditor has released multiple reports detailing hundreds of millions in public program benefits going to recipients who are not eligible.