EDITORIAL: Health provider tax: Everyone benefits from healthy citizens

March 24-- Mar. 24--The debate over extending the health care provider tax instituted about 30 years ago shouldn't be about how much it costs, but rather how much it saves.

The 2 percent "provider tax" has made health care affordable for hundreds of thousands of Minnesotans since it was instituted by a Republican governor with bipartisan support in the 1990s. The tax was designed to underwrite the premiums and cost of MinnesotaCare, a program for those who didn't qualify for government's Medical Assistance but didn't make enough money to purchase market-rate insurance.

About half of the $700 million now funds the state's expanded health care program for the poor and disabled.

An agreement during the 2011 government shutdown called for the tax to sunset at the end of this year. Gov. Tim Walz wants to keep the tax in place to continue to help fund burgeoning health care costs and keep health insurance affordable. Some Republicans would like to see it end, saying the health care subsidies can be provided with general fund money.

Ending the tax and taking the money from the general fund would require the Legislature to cut spending in some other program. We don't see anyone proposing to cut any other budget items at this juncture to make up for the loss of the provider tax.

The health care subsidy the GOP backed last year for backstopping insurance companies took $400 million of the health care access fund to keep premiums low for 5 percent of the people in the state who buy insurance on the individual market or about 162,000 people.

About half of the Health Care Access Fund goes to the state's Medical Assistance program for the poor, who number about 1 million. About $36 million goes to subsidize MinnesotaCare. That program is now also supported by the Affordable Care Act, funding of which has been under attack by President Donald Trump and Republicans.

Walz proposes to keep the tax to expand eligibility for people to buy affordable health insurance. That seems like a worthy goal, given the market gyrations Minnesotans experienced a few years ago with premiums skyrocketing by 60 and 70 percent.

And federal subsidies for health care also remain under threat with the Trump administration.

But there are alternatives to the provider tax. GOP Sen. Scott Jensen, a Chaska doctor, has proposed moving the tax from providers to insurance carriers. Walz seemed open to exploring that idea. We applaud Jensen for trying to find a solution that can be supported by both parties.

Everyone seems to agree that all Minnesotans should be able to buy affordable health care and all of us benefit when we have a healthy population. Without health insurance, many are forced to visit expensive emergency rooms, where, under federal law, they must be served whether they have insurance or not.

Ending the provider tax would create chaos in health care markets. With replacement funding uncertain, it would likely cause more people to lose their health care.

We urge the governor and legislators to either continue the provider tax or find a workable alternative to support affordable health care for all.

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