In a move that has raised the ire of many a Georgia legislator, Governor Sonny Perdue has proposed a plan to tax hospitals and health insurers, a move he wants as a means of offsetting a growing demand for Medicaid services.  As the state’s unemployment rate rises as a result of the current economic crisis facing the nation, Georgians and workers everywhere are losing jobs in record numbers, and the employer-based health insurance coverage those jobs provided, and they’re turning to Medicaid in budget-breaking numbers.

Georgia State Commissioner for Community Health, Rhonda Medows, says, “the correlation between the unemployment rate and the enrollment rate in Medicaid . . . cannot be overstated.”  If the Georgia Assembly passes the proposed tax, it is expected to commence July 1, when the state’s 2010 fiscal year begins.  State coffers will gain about $317 million in increased revenue if the tax proposal passes.

Perdue wants to tax hospitals and health insurance companies 1.6%, an expense that, if approved, will surely be passed along to the patients seeking treatment at those hospitals and the insured Georgians paying monthly premiums, which are expected to increase by $4.53 a month.  The insurance industry has warned state legislators of the possibility that the increased premiums will prompt more Georgians to drop their health insurance coverage altogether, thereby increasing the number of uninsured Georgians and increasing enrollment in the Medicaid program.

The tax is expected to cost hospitals in the state about $260 million, an expense Perdue says will be offset by $50 million in reimbursements to every hospital that accepts Medicaid patients.  The cost to medical insurers is projected at $57 million.