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Release: Property Tax Impact of Reduced Hospital Funding Could Be Severe

AUSTIN, Texas—(Dec. 14, 2016) New data analyses show that nearly 75 percent of Texas’ local taxing entities soon could have to increase taxes on property owners by more than 8 percent to continue vital health care services in their communities.

New report, Rocks in the Water: The Unseen Cost of Losing Federal Support for Uncompensated Care, now available.


FOR MORE INFORMATION, CONTACT: Lance Lunsford | 512-465-1052 | @lancelunsford | llunsford@tha.org

FOR IMMEDIATE RELEASE

Property Tax Impact of Reduced Hospital Funding Could Be Severe

Extending the Medicaid 1115 Waiver and Eliminating Medicaid Cuts Are Critical

AUSTIN, Texas—(Dec. 14, 2016) New data analyses show that nearly 75 percent of Texas’ local taxing entities soon could have to increase taxes on property owners by more than 8 percent to continue vital health care services in their communities. These property tax hikes would be necessary if proposed federal funding cuts to Texas hospitals’ supplemental payments become reality. The alternative to a property tax increase is a reduction in the availability of local health care services.

These new data come from a study conducted by the Texas Association of Business, Texas Interfaith Center for Public Policy, Texas Association of Community Health Plans and Texas Hospital Association.

“Ensuring access to health care has long been a top priority for Texas faith communities,” said Bee Moorhead, executive director of Texas Impact and the Texas Interfaith Center for Public Policy. “The hospital safety net is critical for access to care. Texas can’t afford to lose any federal support for that safety net, especially when there are so many unknowns about the future of health care funding.”

The study assumes that scheduled cuts to Medicaid disproportionate share hospital payments will continue as planned, taking effect in October 2017, and that uncompensated care payments through the Medicaid 1115 waiver will be reduced beginning January 2018. Federal Medicaid DSH payment reductions are estimated at $437 million and UC payment reductions at $900 million.

“Extending Texas’ effective 1115 waiver and its uncompensated care funding beyond December 2017 is critical while Washington figures out how to move forward with plans to cap federal funding for Medicaid,” said John Hawkins, senior vice president, advocacy and public policy at THA. “The devastating local impact of lost hospital funding also highlights the need to repeal, or at least delay, the scheduled DSH cuts that are part of the Affordable Care Act.”

“The impact of the loss of supplemental hospital payments would be dramatic, and in some cases catastrophic, for local communities,” said Bill Allaway, the study’s primary author. “Local governments are required by law to ensure the availability of critical health care services, but many would find it impossible to raise the funds to do so.”

“Health care costs are a major concern for Texas businesses,” said Bill Hammond, CEO at TAB. “Maintaining hospitals’ supplemental payments is critical to avoid shifting costs to local taxpayers and the employers and workers who pay health insurance premiums.”

“Many Texans are at risk,” said Kay Ghahremani, President and CEO, Texas Association of Community-Based Health Plans, “because successful managed care depends upon a network of stable providers. The loss of this magnitude of safety net funding threatens the local health systems that sponsor our community health plans, our providers, and patient lives.”

The full report is available at https://texasimpact.org/Uncompensated-Care

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