The legislation passed only after the most controversial provision
was removed. Under the provisions of the current law, a one percent tax is
placed on a majority of health claims in an effort to generate revenue for the
state Medicaid program. However, the tax is failing to generate the $400
million that was originally projected and needed to fully fund Medicaid.
Senate
Bill 335, introduced by Sen. Roger Kahn, originally included a three-year rate
adjustment in an effort to address the funding shortfall. However, the rate received
a considerable amount of opposition from lawmakers, business groups, and other advocates
who were concerned about rising health care costs. Once
the rate adjustment was removed from the bill, Senate Bill 335 was adopted and
sent to the full Senate.
However, lawmakers will need to tap into the Medicaid Trust Fund, reduce
Medicaid services or provider payments, or use a portion of the additional
state revenue that was announced earlier this week to address the Medicaid
funding shortfall. Another option to fill the gap would be the automobile
no-fault insurance reform proposal, currently before the full House, which
includes a new $25 health care assessment on car insurance policies. A solution
will need be found before the budget takes effect on Oct. 1.