I wonder about the understanding of every single person previously posting on this thread, of the often abused use of the Medicaid provider tax (which didn't exist until the 1980s and, when it became apparent how it could be easily abused, had to have its first restrictions put on it in the following decade). Is there "zero chance" you and the others posting above, have any knowledge or understanding about it? Not one of you has yet actually discussed a thing about the "Medicaid provider tax".
Here is some info from a 2023 piece from "The Committee for a Responsible Federal Budget":
"
While the formulas that determine federal and state contributions are meant to reflect state need, these formulas have been subverted by numerous state schemes that reduce state general fund financing, inflate federal spending, and increase health care costs. We discuss this issue generally in an earlier issue brief Time to Fix Medicaid Financing Schemes. The most utilized schemes, by far, involve taxes imposed on health care providers and related entities, or provider taxes.
Despite some federal restrictions on state use of provider taxes, these taxes continue to grow. Provider taxes are currently the second largest source of funding for states’ share of Medicaid costs behind general funds. And although rules aim to limit states’ use and abuse of these taxes to boost their federal funding, states continue to find ways to utilize provider taxes in order to shift more and more Medicaid costs from the state onto the federal government, distorting the intended shared responsibility between the federal government and the states.
More specifically, the federal government covers over 5 percent more in Medicaid costs than it would without various state financing schemes.2 With federal debt approaching record levels while states are flush with cash, policymakers should work to rein in excessive federal Medicaid spending by limiting the use of provider taxes to inflate reported Medicaid costs and shift costs onto the federal government."
Then, the CBO regularly provides options for reducing the federal deficit, including periodically discussing "Medicaid provider taxes", which have become quite an increasing FMAP burden. This from 2024:
"Limiting or eliminating states' use of provider taxes in financing Medicaid has periodically been identified as a way to reduce federal Medicaid spending. In the early 2010s, there were some proposals to limit or eliminate states' use of provider taxes, but provider tax proposals were not a focus in the past couple years. However, the Congressional Budget Office (CBO) included limiting states' use of Medicaid provider taxes in its most recent list of options for reducing the deficit, as it has done in previous iterations of that list.
CBO provided three policy options for limiting states' use of Medicaid provider taxes:
- 1. Lowering the safe harbor from 6.0% to 5.0% (savings of $48 billion from FY2025 to FY2034);
- 2. Lowering the safe harbor from 6.0% to 2.5% (savings of $241 billion from FY2025 to FY2034); and
- 3. Eliminating states' ability to use Medicaid provider tax revenue to finance Medicaid (savings of $612 billion from FY2025 to FY2034)."