Like many other states, Mississippi is feeling the squeeze of a downturn in the economy. In particular, the state is reporting a $90 million shortfall in Medicaid funding. Medicaid in Mississippi serves about 600,000 people. Mississippi, which ranks among the poorest states in the country approved the deepest cut in Medicaid eligibility for senior citizens and the disabled than in any other state – all under Governor Haley Barbour in 2004. The maximum income allowed for an individual to receive Medicaid in Mississippi was reduced from $12,569 per year to $6,768 (yes, four figures – not a typo). Despite the dramatic and controversial cuts, the state still faces challenges in funding.
Apparently, the state had been using Hurricane Katrina money to make up the deficit (no, I don’t get how that works – I thought that Katrina money should be used for, oh, say, Katrina victims, but who am I to say?) but has run out of money.
Their solution?
A tobacco tax, a hospital tax or some combination of the two.
The House of Representatives favors a tobacco tax. The proposal would raise the current tax of 18 cents to almost $1. Estimates are that this tax would generate about $150 million in revenue – more than the current hole. This would make sense from a budgetary perspective – especially since Mississippi ranks near the bottom of all states in cigarette taxes.
Nonetheless, the Senate favors a hospital tax. The tax would add $167 per day as a “bed tax” on state hospitals. The Mississippi Hospital Association helped craft the hospital tax, though they reportedly prefer the tobacco tax. Hospitals worry about the increased cost of care and what that might mean for patients – especially those with insurance. Ironically, those with private insurance are likely to be hit hardest if insurers balk at the tax or if the insureds have high deductibles or other restrictions. To be fair, though, newspapers in Mississippi are reporting that the Public Health Committee Chair Hob Bryant claims that the tax would not result in higher insurance premiums – how he can make such a statement is not clear. The idea of taxing those who pay for care to benefit those that do not is not likely to be popular.
Lt. Gov. Phil Bryant (I’m assuming no relation to Hob) is opposed to an increase in the tobacco tax, claiming that it would be unconstitutional to pass such a tax since the agenda for special session called by Gov. Barbour was limited to the hospital tax. Why favor a hospital tax over a tobacco tax? Hmm, I don’t know. But it is, of course, worth noting Gov. Barbour’s prior job before he was elected to office: he made millions as a lobbyist for the tobacco industry. Just saying.
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