Further Response to Club for Growth

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From the official Huckabee blog on MikeHuckabee.com:

October 13, 2007

With all due respect to my fellow fiscal conservative advocates, as President of the Arkansas Health Care Association during Governor Huckabee’s tenure, I wish to dispel criticisms of the provider tax that was initiated for the Arkansas nursing home program.

Governor Huckabee’s position should be considered as one that saved Arkansans from huge tax increases. Let me put the situation in perspective.

For over 20 years prior to the governor’s tenure, Arkansas paid for its nursing home program through a "negotiated" illegal class rate. The hammer was coming down on the entire program. Federal law requires a nexus between the rate and the cost of the care. Arkansas’ state government is required to operate with a balanced budget. For over 20 years the nursing home program survived with minuscule rate increases based largely on how much money could be negotiated in the final state budget. To compound the problem our class rate for nursing home care had fallen to an average of less than $64.00 per patient day which created a short fall of over $12.00 per patient day. Governor Huckabee’s administration, legislators, consumer advocates, and nursing home owners all agreed that care was sub-par, jeopardizing the entire Medicaid program.

Most suggested the old tax and spend philosophy. Raise income or sales taxes to fix the problem. Growth was not an option because there is a finite number of nursing homes and nursing home patients. A soft drink tax had been passed a few years before to prop up the Medicaid program.

The industry and key legislators brought the provider tax concept forth. It was agreed on by the Huckabee administration only after assurances were made for accountability and an entirely new payment methodology was implemented. The tax was placed on total receipts for nursing homes. I could explain in greater detail if asked.

Out of 228 nursing homes in Arkansas only 3 are private pay (that is, they refuse to admit patients who receive federal or state subsidies). These homes were opposed to the provider tax because Federal Law requires all providers be taxed the same. A wide-ranging group of legislators and Governor Huckabee agreed to raise additional Medicaid dollars with the provider tax increasing the matching 3 to 1 federal dollars for nursing homes. Without this solution we would have been faced with huge tax increases for the entire state of Arkansas or the entire Medicaid program in Arkansas could have been decertified.

I would be happy to answer any questions.

Sincerely,
Jim Cooper

President
Arkansas Health Care Association