Bipartisan Support for Provider Tax Alternative

MAFP legislative rep Dave Renner, CAE, shares about a bill recently introduced in the Minnesota Senate, offering an alternative to the provider tax—a claims expenditure assessment.

Four Minnesota Senate authors have introduced an alternative to the two percent provider tax, SF 2616. The alternative is based on an option suggested by the Minnesota Medical Association.

SF 2616 creates a new claims expenditure assessment (CEA), a two percent assessment on paid claims at the health plan and third-party administrator level. The CEA is as broad-based as the provider tax but removes the burden of assessing and collecting the tax from physicians and other providers. Another difference is that the CEA is only assessed on paid claims. This means that patients who are paying for their care with out-of-pocket cash or receiving care that is not covered by their insurer will not have to pay the tax.  

This bill has strong bipartisan support and is authored by Senator Jim Abeler (R-Anoka), Senator Melisa Franzen (DFL-Edina), Senator Scott Jensen, MD (R-Chaska) and Senator Matt Klein, MD (DFL-Mendota Heights).

If the Legislature takes no action this year, the provider tax will sunset without identifying an alternative funding source. This will create a $700 million annual hole in funding such essential healthcare programs as MinnesotaCare, Medical Assistance, the Statewide Health Improvement Partnership and more. These programs are too important to ALL Minnesotans to go unfunded.  

We are willing to look at alternatives to the provider tax (like this proposal); but, in the end, the MAFP supports continued, long-term funding for safety net programs.

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Posted by:

  • Jami Burbidge, MAM, director of advocacy & engagement, @jami_burbidge
  • Emie Buege, communications

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