The 2% MinnesotaCare Tax

 


 

Distribution, Utilization, and Impact of the MinnesotaCare Provider Tax
Executive Summary of CCHC Report, January 2000

Hiding the Tax in 1992
(April 2, 1992 - Senate Tax Committee (15 days before MNCare became law))

Sen. Pogemiller(D) "Who are we trying to kid? This is a tax...it kind of presumes that if we don't tell people things, things will be okay..."

Sen. Pogemiller(D) "[We're going to] specifically put language in the law that says,'You can't tell people that we have a 2%...tax'?"

Sen. Berglin(D) "Sen. Pogemiller, if we want to be indicating to the consumer exactly what the whole story is...the whole thing ends up getting to be very complicated..."


Who Pays?

Patients, doctors, dentists, hospital, and pharmacists. Most providers collect it from patients directly or indirectly and pay the state's Revenue Department.

Letter to Physician from the Commissioner of the Minnesota Department of Revenue


2% Tax* on gross revenues. (Minn. Stat. Sec. 295.52)
  • Hospital tax 2%
  • Surgical center tax 2%
  • Pharmacy tax 2%
  • Provider [doctor/dentist] tax 2%
  • Wholesale drug distributor tax 2%
     

    * In 1997, the Minnesota legislature voted to temporarily decrease the tax to 1.5% from January 1, 1998 - January 1, 2000.

 

Where it Went: 1995
  • $56M (42% for care of MNCare patients)
    • $27M General Fund
    • $8.9M DHS Administration
    • $6.9M Health Dept: "for the health care reform effort"
    • $1.3 M Dept. of Revenue to collect tax
  • Health Care Access Fund Initiatives. See how the money was used.