Like plenty of other states, Tennessee is strapped for cash and looking for ways to save money. Cuts are likely for TennCare, the state’s Medicaid managed care program.
But the state’s hospitals may ask to pay more taxes in order to stave off cuts to the program, the Tennessean reports.
Because Medicaid is jointly funded by states and the federal government, cuts at the state level can trigger cuts in federal matching funds. In the case of Tennessee, proposed cuts would save the state $380 million but could cost the state two to three times that much in federal aid, according to the article.
What’s more, if the cuts to the program drive up the number of people in Tennessee without insurance, hospitals could be on the hook for more unpaid bills. So the state’s hospitals may decide that it’s actually in their financial self interest to pay higher taxes to block some TennCare cuts, because a big chunk of federal Medicaid funds will through to hospitals.
The Tennessee Hospital Association’s board of directors will meet today to discuss the subject, the article says. The tax would be levied on hospital revenues; it’s unclear what the rate would be.
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