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AHCA to Congress: Don’t use Medicaid’s provider tax rates to bail out student loans

June 6, 2012
by pamela tabar
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The American Health Care Association and the National Center for Assisted Living (AHCA/NCAL) petitioned House and Senate leaders Wednesday to reject last week’s congressional proposal to sweeten student loan rates by cutting the Medicaid tax assessment rate.

The proposal would reduce Medicaid provider tax rates from 6 percent to 5.5 percent, using the recovered funds to keep Stafford student loan rates low.

The “rob Peter to pay Paul” strategy would decimate an already underfunded nursing home industry, insisted AHCA/NCAL President and CEO Mark Parkinson in a letter to Congress. About 63 percent of nursing home residents are funded by Medicaid, but reimbursement rates already fall short of the actual costs to facilities, the letter states. The lacuna resulted in a $6.3 billion loss for the nursing home industry last year.

“Limiting states’ ability to use provider assessments to finance their Medicaid programs would do nothing to reduce the cost of health care or make Medicaid more efficient,” Parkinson wrote. “The federal government projects that there will be 72 million people age 65 or older in the U.S. by 2030, making the demand for long term care services and the people we employ only increase.”

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