MSMS and MOA call $300M tax on Michigan's health care system 'bad policy'

With reports that Gov. Jennifer Granholm will include a $300 million tax on Michigan's health care system as part of her fiscal year 2010-11 state budget proposal, the 15,000-member Michigan State Medical Society (MSMS) and 5,500-member Michigan Osteopathic Association (MOA) urged lawmakers to reject the new taxing scheme, just as they did less than six months ago.

"Last week, in her State of the State address, Gov. Granholm talked boldly about the path forward for Michigan. This budget proposal rehashes the old, failed proposals that would increase the cost of doing business in Michigan and drive people away to find opportunities in other states," said MSMS President Richard Smith, M.D. "In fact, while a national debate rages on about the best way to make health care more accessible, this plan would make our health care system less accessible and more expensive."

"This huge tax on Michigan's health care system is not a new idea," he continued. "It is not bold or innovative. It is bad policy, however, and a failed taxing scheme that the State Senate already wisely stopped once. We urge the Senate, and their colleagues in the State House, to stop this tax on our health care system once again."

In addition, MSMS and MOA noted this new tax would:

• Drive physicians and their practices out of Michigan, reducing access to care for all patients;
• Discourage young doctors from setting up practices in Michigan;
• Be the only tax of its kind recently passed by any state: two others have tried a similar tax and it's been rescinded in Kentucky and it's being phased out in West Virginia;
• Be the third general tax imposed on doctors, after the income and the Michigan Business Tax already paid by physicians;
• Force physicians to lay-off essential staff including nurses, office administrators or billing personnel, further reducing access to care and adding to Michigan's unemployment rate; and
• Not be a long-term solution to Michigan's chronically under-funded Medicaid program.

"For decades, physicians have fought to protect Medicaid funding in every aspect, regardless of reimbursement issues," said MOA President Donna Moyer, DO. "Even as Medicaid reimbursement continued to plummet over the past three decades, it was the physician groups like MOA and MSMS that battled to protect services and eligibility for Michigan's most vulnerable patients. Another tax on the health care system is another tax on Michigan's patients — and that's something this state simply cannot afford at a time like this."