Provider Tax

$1,600,000,000
and Rising

Links to the MinnesotaCare Comprehensive Insurance Reform Laws

Provider Tax Poster for Clinics to Display

This document, explaining the impact of the provider tax on cost of health care services, can be hung on the back of exam room doors, inserted as a double-sided poster in billing statements, framed at the front desk of the clinic, and provided as a handout in the waiting room. Phone numbers for contacting state officials are included on the second page. This document may be copied unaltered for noncommercial distribution and information purposes only.

Provider Tax Collection, 1993 - 2003

Provider Taxes Collected To Date - received October 29, 2003

Health Care Access Fund Balance Statement 2003

footnote 6 explains plan to transfer money to General Fund

INCREASE IN MINNESOTA'S HEALTH CARE TAX SET FOR 2004

The MinnesotaCare provider tax on health care services was established in 1992, and set at 2 percent. However, in 1997, the Minnesota legislature temporarily reduced the tax to 1.5 percent beginning January 1998. For five years - half the life of the tax - the legislature has maintained that temporary reduction. However, on January 1, 2004, the tax will increase to 2 percent unless the legislature moves to extend the reduction - a move that could be made more difficult by the fact that the Pawlenty budget is based on the tax returning to 2 percent.

CCHC’s “Tax on Patients” Poster

"No tax should be hidden from the public. Increasing public awareness about the existence and cost of the tax, as well as how few of the dollars have been used for the subsidy program, is key to having a frank discussion on the value of the tax," says Twila Brase, R.N., president of CCHC.

Minnesota Loses Another Health Insurance Option -- World Insurance Drops Out of State citing Regulatory Environment

Another sign that health insurance options for Minnesota consumers are increasingly limited to HMOs has just surfaced in a letter to insurance agents. World Insurance has just notified their Minnesota agents by mail that the company will no longer write insurance in Minnesota.

MinnesotaCare is a Welfare Program

Coverage for inhospital expenses are limited to $10,000 for adults with higher incomes. There is no catastrophic insurance coverage for these adults. Adults risk transfer into Medical Assistance.

MN Legislature May Unwittingly Help HMOs Cut Their Financial Obligations for Patient Care

According to Citizens' Council on Health Care (CCHC), Minnesota legislators want health plans to cut payments to providers if the MinnesotaCare provider tax is repealed. However, in a detailed report published by CCHC last year, CCHC found no evidence that health plan payments to providers between 1993 and 1999 ever included the provider tax.

Provider tax plan ill-advised, says CCHC

Because the HMO tax is passed on directly to small businesses, the business community has pressured the Ventura administration to eliminate this tax burden which has added to the rapidly rising cost of health insurance premiums. As a result of lobbying, the HMO tax was suspended in 1999 and no revenue was collected in 2000.