House Republicans Monday (September 28th) blasted a proposal by Democrat lawmakers to tax health care in order to help balance the state budget.

House Bill 5386, which is currently in the tax policy committee, levies a 4 percent tax on physicians’ gross receipts.  Democrat House Speaker Andy Dillon was quoted in a recent news article saying the state would be crazy not to do it.

“It is astounding to me that right now when we are in the middle of a national discussion about lowering the high cost of health care, Michigan Democrats are actually pushing for a new tax on doctors that will make medical treatment more expensive,” said House Republican Leader Kevin Elsenheimer, of Kewadin.  “Doctors are going to have to pass these costs onto their patients, making the cost of health care go up.”

If approved, the tax would raise health care costs in Michigan by nearly half a billion dollars annually.

“House Republicans proposed a plan to balance the budget without raising taxes months ago – and our plan didn’t reduce Medicaid reimbursements by any more than what the governor recommended,” said state Rep. Matt Lori, of Constantine.  “There is absolutely no way we are going to support the Democrat plan to tax health care just because lawmakers waited until the last minute and now are under the gun to finish the budget by Oct. 1.”

Earlier, Lori said he had received phone calls from two physicians in his district, near the state line, who said that, if things don’t improve, they will move to Indiana.  (Matt Lori audio clip :09)

Elsenheimer also said he was concerned the plan could negatively affect Michigan’s growing health care industry:

“Two years ago lawmakers rammed the poorly thought out business tax surcharge through the Legislature at the 11th hour, and we’ve only seen unemployment go up since.  Now we’re about to repeat that mistake by adding a new tax surcharge on health care.  It makes me wonder, who’s next?  Who’s left to tax?”

Source:  News release from Michigan House Republicans