PARAMUS – Senator Paul A. Sarlo today said he will oppose the $430 million hospital tax currently proposed in the State budget because it would “devastate” many suburban hospitals and jeopardize the economic stability of health care facilities in Bergen County.
“We can’t solve our charity care problem on the backs of hospitals who serve our working residents who have health insurance,” said Senator Sarlo, D-Bergen, Essex and Passaic. “I can’t support a tax targeted at facilities that service paying customers.”
Senator Sarlo said his concerns came to a head today during the public hearing of the Senate Budget & Appropriations Committee held at Bergen Community College where health care professionals opposed the levy.
“This tax could force the closure of several hospitals at a time when we should be focusing on ways to help health care facilities flourish,” said Senator Sarlo, a member of the Senate panel.
The 5.5 percent proposed assessment on non-Medicare revenue at hospitals would generate $430 million of which $215 million would go toward charity care. The remaining $215 million would be matched by the federal government and create a $430 million pool to be distributed back to hospitals. Facilities with low numbers of Medicaid clients would be hard hit by the proposed tax, observers agree.
“I support funding for charity care to the best of our ability, but not by driving needed hospitals out of business,” said Senator Sarlo.
The proposal, which would depend on federal approval, would cost hospitals with low numbers of Medicaid patients millions of dollars while it would benefit urban facilities with higher numbers of poor patients.
“The hospitals are already paying plenty of taxes and this one would be devastating,” Senator Sarlo said.
Funding for charity care, a special fund for indigent people without health insurance, has been made in recent years by raids on the State unemployment insurance trust fund.