Here is how the provider tax works– hospitals take money out of their right pocket in the form of a “tax” and send it to the state, it cycles through state government in order to look like state spending but it is returned to the hospital’s left pocket. Why do they do this? This “state spending” triggers additional federal taxpayer contributions, driving up spending in the program.
What does this mean for Tennessee? For every new dollar Tennessee collects as a “tax” on hospitals for Obamacare expansion, taxpayers will pay more than $5 to those same hospitals and an extra $8 to other medical providers.
This funding scheme means Tennessee hospitals will pay roughly $1.7 billion in new taxes over the next decade. But the expansion, made possible by these taxes, forces all federal taxpayers to kick in another $22.5 billion. This ultimately allows hospitals to collect up to $9.3 billion in new Medicaid expansion revenue.
This gimmick certainly isn’t new: Tennessee already receives a third of the “state share” of Medicaid spending from provider taxes and funds from local governments. But while this may seem like a clever budget gimmick, there’s only a slim chance that this scheme will survive much longer.
The problem is that ObamaCare and Insure TN isn’t going to require taxpayers to just pay an extra dollar, but I digress. I suggested that Mr. Green could help Mr. Smith with his surgery that he said he needed. He could simply message him and get his address. Mr. Green tried to tell me how many jobs Insure TN was going to create in Tennessee, all by getting more federal crack ~taxpayer~ dollars. He also claimed that I didn’t have a better alternative. That’s really funny because I had already suggested that he could help out Mr. Smith.