Medicaid funding legislation (MS HB 17) fails

Even if House Bill 17 survives that chamber, it appears doomed in the

Senate. Most state senators support a tax on hospitals. Also, Gov.

Haley Barbour is expected to veto a tobacco tax hike.

Republican Lt. Gov. Phil Bryant called the House measure “an exercise

in futility.”

“I want a bill that funds a $90 million deficit, passes the House and

Senate and is signed by the governor,” he said. “We can do that

(today) and go home.”

But House Speaker Billy McCoy, D-Rienzi, said the House “is

apprehensive that costs will be dumped on third parties or individuals

that ultimately could lead to higher monthly insurance premiums for

individuals, employers and governments.”

That issue and other unresolved legislation will lengthen the special

session that has lasted five days. Special sessions cost nearly

$60,000 the first day and almost $40,000 each day thereafter. Of the

11 items on Barbour’s agenda, only a bill that would speed

construction of a Jackson toll road has been resolved.

If no agreement is reached in the special session on the health

insurance program that serves hundreds of thousands of low-income

Mississippians, Medicaid’s funding woes may not be addressed until the

next regular session convenes in January. Or Barbour could call

another special session before then. Barbour and lawmakers were unable

to agree on a funding solution before the regular session ended last


Key House leaders said they will try to advance legislation this week

that would use money from the state’s “rainy-day” fund if Medicaid

anticipates a shortfall in revenue.

Supporters of House Bill 17 view it as an attempt to compromise with

key Senate leaders and Barbour, a former Washington tobacco lobbyist

who has said he is against raising anyone’s taxes.

It hikes the 18-cent cigarette tax to $1 per pack and adds a 1 percent

increase on liquor and wine. Revenue generated would be paired with a

complicated hospital tax formula already agreed upon by Barbour, the

Senate and leaders of the Mississippi Hospital Association. The House

bill cuts the hospital tax plan in half.

Fifty-five House lawmakers voted for the bill, while 53 opposed it.

The measure needed 65 votes to pass.

“We’ve got two polarized ideas on how to solve a problem,” House

Medicaid Committee Chairman Dirk Dedeaux, D-Perkinston, said

afterward. “There were more people interested in making sure their own

side prevailed rather than compromising on the issues.”

Opponents of the bill said they want a chance to vote on the Senate


A Medicaid advisory committee appointed by Barbour recommended this

week using a tobacco tax hike or general funds to pay for Medicaid.

But in “the current political environment,” the committee said it

supports the hospital tax plan.

Bryant said he’s not sure the extra taxes can legally be added to a

special session agenda controlled by Barbour, a Republican who favors

the hospital tax plan. McCoy ruled against a similar argument made by

House Republicans.

Dedeaux said staff attorneys told him Barbour is allowed to decide the

session’s agenda but not the methods lawmakers use to address it.

MHA officials maintain they prefer a tobacco tax hike to plug an

annual $90 million hole in Medicaid.

But aside from an expected veto from Barbour, Bryant said key Senate

committee chairmen aren’t likely to consider the House plan.

“We have to deal with the governor,” said Michael Bailey, MHA’s chief

financial officer, as a House committee debated the two proposals.

“It’s (the hospital tax plan) or no plan.”

Some Republicans have said they would support a moderate hike if it

was paired with a hospital tax. They opposed the House bill Thursday.

The hospital tax plan replaces three taxes previously assessed on the

facilities with one tax. It allows some hospitals to receive more

reimbursements than others.

Barbour said hospitals that serve many low-income patients would fare

better under the plan.

“It’s not a new tax,” Bryant said, referring to an assessment plan

that hospitals paid for 15 years before the federal government deemed

it unacceptable.

“I don’t believe (the Senate plan) will work,” said Rep. George

Flaggs, a Democrat from Vicksburg who authored the House bill. “It

think it’s a sham that will get us through this session.”

Medicaid officials said the new proposal will provide a stable funding

source for five years. Flaggs said a tobacco tax hike would provide

enough revenue for a longer term and accommodate Medicaid’s growth.


After HB 17 failed, the Appropriations Chairman attempted to  call up

a bill that would appropriate $90 Million to the Division of Medicaid

from the Rainy Day Fund.  However, he failed to receive the 2/3 vote

to suspend the rules to be able to debate the bill.  He can call the

bill up this morning without having to suspend the rules.


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