Georgia Senate Renews Bed Tax

Date: February 14, 2017

Georgia’s hospital bed tax, which was set to expire halfway through 2017, is now a step closer to being renewed. On Feb. 2, the state Senate approved Senate Bill 70, which would reauthorize collection of the bed tax—formally known as the hospital provider fee—until 2020.

The tax is a primary funding mechanism for Medicaid, and its renewal will go toward plugging a $900 million hole in the state Medicaid budget. With the provider fee, net profits of hospitals—except for critical-access, psychiatric, and state-owned hospitals—are taxed 1.45 percent, which amounts to about $280 million per year. Georgia then uses that revenue to obtain nearly $600 million in matching federal Medicaid funds.

The debate included a call from some lawmakers to expand the state’s Medicaid program, but that proposal has been repeatedly shot down in Georgia. And under President Trump, Medicaid’s future is uncertain.

SB 70 now goes to the House, where it is expected to pass.

Related Content: Small Business News | Economy | Georgia

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