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Showdown looming in legislature over health care 'provider tax'

May 02, 2019 06:41 PM

There are major areas of disagreement between Republicans and Democrats when it comes to crafting a new two-year state budget, but one in particular stands out:

The health care "provider tax."

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Republican lawmakers want to let it expire at the end of 2019 as currently written in state law. Gov. Tim Walz and House Democrats say if it does expire it will be catastrophic for low-income Minnesotans.

RELATED: Minnesota legislators face expensive health care decisions

"This investment in the health of our people, our families, our communities is necessary to keep the promises that we've collectively made to the people of Minnesota," Health and Human Services Commissioner Tony Lourey said at a State Capitol news conference Thursday.

Walz organized the news conference, which featured many health care providers he said also want to keep the tax in place.

The tax is expected to bring in $700 million this year, with most of the money earmarked for low-income health care.

RELATED: Walz discusses chances of compromise, reaching budget deal with Republicans

"We are advocating for a tax that we pay as health care providers," Dr. Penny Wheeler, the CEO and President of Allina Health, told 5 EYEWITNESS NEWS after she attended the event with the governor.

She said the tax health care providers pay makes it possible for low-income Minnesotans to access health care.

As a physician, she said she's seen the result of people who don't have health care.

"I think about people I've taken care of," she said. "You know, a diabetic I took care of who couldn't afford her medication so she wound up in the emergency room with a diabetic coma, essentially."

But Republicans say the federal "Affordable Care Act" now pays for many health care programs for low-income Minnesotans and the "provider tax" is no longer needed.

Plus, they say the tax is usually passed along to Minnesotans in their health care bills.

Republican Senate Majority Leader Paul Gazelka said even without the tax in place, the Senate budget would increase overall state spending by five percent.

"Lets pass the two-year budget with the resources we have," Gazelka told reporters after the governor's news conference. "We have a billion dollars in surplus and we can absolutely do it with a five-percent growth, living within our means."

There are possible compromises, including pushing the expiration of the tax off for another two years, or slightly lowering the tax.

Lawmakers have until May 20 to reach a compromise.

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Tom Hauser

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