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Legislative News and Views - Rep. John Petersburg (R)

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REINSTATING SICK TAX MEANS INCREASING HEALTH CARE COSTS

Thursday, January 17, 2019

Every once in a while, when faced with a predicament, you’ll find doing nothing turns out to be better than doing something.

 

Such is the case of Minnesota’s expiring provider tax – otherwise known as the sick tax.

 

Today, Minnesotans pay a two percent tax levied on most patient services in Minnesota, including things like doctor visits, dental appointments and emergency room visits. According to state law, the sick tax will expire on December 31 thanks to bipartisan legislation passed by a Republican-controlled legislature and signed into law by Governor Dayton in 2011.

 

Game over, right?

 

Wrong.

 

Despite the fact that we are projected to see a $1.5 billion surplus, Democratic leadership has already stated they’re pushing to restart the tax on January 1.

 

Over the past week, Governor Walz called it a "nonstarter" to end the tax, and DFL House Health and Human Services Finance Chair Tina Liebling said it was "essential" to restore the tax or replace its revenue.

 

What the DFL hasn’t stated is that bringing back the sick tax will result in a more than $600 million increase on health care costs for Minnesotans next year alone.

 

It’s difficult for me to see us increasing costs with additional taxes. I realize it hasn’t disappeared yet, but it will at the end of the year and providers and others have already reduced costs in other areas in anticipation of the sick tax going away.

 

Bringing it back just ensures our costs for premiums as well as care will continue to rise in the future.

 

I don’t believe that’s the proper way to go. We have a surplus, and we certainly could use it to offset lost sick tax revenue if that’s needed, but there are alternative ways to fund additional cost increases in health care.  

 

For example, we could finally look at ways to reduce costs by improving efficiencies and competition.  Or we could crack down on waste, fraud and abuse in our public health and welfare programs.

 

I’m disappointed the current leadership is looking to re-implement the sick tax and increase the cost of your health care. In talking with local hospitals and doctors, they oppose the idea because it just adds more cost to their bottom line.

 

Let’s be clear: on January 1, Minnesotans’ health care bills WILL go down if lawmakers can get out of the way. But all signs from the DFL point to raising taxes by $600 million next year on the sick and suffering, which