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Commissioners discuss potential impact of Medicaid managed care sales tax loss

| March 14, 2017

COSHOCTON – The Coshocton County Commissioners met Monday, March 13 and discussed the negative effects of the Medicaid managed care sales tax loss.

The commissioners met with State Senator Jay Hottinger on Friday, March 10 with several other representatives and county commissioners in attendance. Many topics were discussed including key financial decisions being proposed in the governor’s budget. One of these proposals is the elimination of the State Medicaid Tax. If this loss of revenue to Coshocton County and other Ohio counties is not addressed by Governor Kasich, House of Representatives, or the Senate, it will severely impact Coshocton County’s ability to provide needed services to residents.

From 2005 to 2009, the state of Ohio collected, among other health care taxes, a 5.5 percent Medicaid managed care organizations (MCO) tax. In 2009, the Deficit Reduction Act of 2005 allowed states to tax all health insuring corporations, not just Medicaid MCOs. Under the Strickland Administration, the Medicaid MCO tax was repealed in September 2009 instead of extending the tax to non-Medicaid plans and made up the revenue that was lost through member payments to Medicaid MCOs. In July of 2014, the Centers for Medicare and Medicaid Services (CMS) stated that taxing health care providers the same as a state sales tax was not allowed and gave states until the end of the next legislative session to comply, which is June 30 for Ohio.

However, the sales tax replacement does not generate revenue for local governments. As of press time, 30 counties, including Coshocton, had passed resolutions urging their state legislatures to protect counties from the negative effects of the Medicaid MCOs sales tax loss.

The potential impact to the county in the loss of Medicaid MCO sales tax is approximately $626,890 out of the county general fund or 10.8 percent of sales tax revenue. In Resolution 2017-09, the commissioners stated that “a 10.8 percent reduction in sales tax revenues and any other ripple effect to revenue sharing allocations and matches to county services would have an adverse impact on the strides the county has made to bring stability to essential mandated services within Coshocton County…” and that “…it is imperative that the state provide a stable base of revenue for local governments to avoid interruption in providing mandated services at the local level…”

In the resolution, the commissioners resolved to urge state and federal legislatures to recognize and take action against the potential loss of more than $600,000 for Coshocton County by either passing legislation that will equally tax all MCOs or change the Federal Administrative Rule which states that all MCOs be taxed.

The more than $600,000 annually was estimated to increase to almost $1 million dollars by 2019. The county commissioners had already allotted that money for the building of a new Justice Center in Coshocton.

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Category: Government

About the Author ()

I have been employed at the Coshocton County Beacon since September 2009 as a news reporter and assistant graphic artist. I am a 2004 graduate of Newcomerstown High School and a 2008 graduate of Capital University with a bachelor’s degree in Professional Writing. I am married to John Scott and live in Newcomerstown. We have two beautiful daughters, Amelia Grace Scott and Leanna Rose Scott.

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