Docs who serve low-income families shouldn’t have to pay higher B&O tax, senator says
An increase in the state business-and-occupation tax rate that takes effect Jan. 1 will harm access to care for patients on Medicaid and residents in rural communities, state Sen. Steve O’Ban said Thursday.
O’Ban is sponsoring a bill in the legislative session that begins Jan. 13 to repeal a 20 percent increase in the B&O tax that will be levied on private-practice doctors and other independent health-care providers. The Legislature exempted large medical systems with hospitals and clinics from the rate increase.
In this year’s session, the Democratic-controlled Legislature increased the B&O rate from 1.5 to 1.8 percent on firms that provide professional services such as engineering, accounting and architecture. The increased revenue would help provide full public college tuition to lower-income students. For a family of four, that would help qualifying students whose household income is $50,000 annually or less.
Medicaid patients who rely on small-practice physicians and other independent medical providers could bear the brunt of the tax increase, said O’Ban, the University Place Republican who voted against it. He said the doctors who will pay higher taxes can’t raise prices because they are limited by contracted fees with insurance companies. The result may be more doctors who no longer treat adult Medicaid patients, he said.
In a video posted on O’Ban’s legislative website, Brianna Label, a pediatrician with Allegro Pediatrics in Bothell, said more independent health care providers will join larger health care organizations if the B&O rate increase is not repealed.
“Ultimately, the patient has less choice where they receive care,” she told O’Ban.
In rural areas especially, private-practice doctors treat a patient’s whole family, and, if they can no longer treat Medicaid patients, care for those family members will be split among different providers, he said.
Medicaid patients will need to receive care at hospitals that charge more for procedures – “sometimes 12 times what a procedure can cost at an independent surgical center,” O’Ban said. Taxpayers will pick up that extra cost through the Medicaid program, which is paid for by the federal and state governments, he said.
State Rep. Drew Hansen is the Bainbridge Island Democrat who sponsored the bill to create a higher education fund partially paid for by the higher B&O tax rate. Hansen said the increased revenue will benefit private-practice doctors and others who depend on higher education.
“The money raised goes directly into expanding opportunities for people to pursue careers in health care, including in rural and undeserved areas,” he said.
As an example, he said, lawmakers dramatically increased salaries for nursing instructors at community colleges. In 2018, the state had to turn away 800 students who wanted to enter nursing programs at community colleges because of an instructor shortage due to low pay, Hansen said.
“That literally is the dumbest situation in the world,” he added.
Hansen said of O’Ban’s proposal: “If there’s an issue with Medicaid reimbursement rates being too low, then we should raise Medicaid reimbursement rates so that it is is easier for physicians to treat families without a lot of income.
“The solution is not to just exempt specialized surgeons and others from helping fund the education for the next generation of nurses, lab technicians, and doctors.”
This story was originally published December 6, 2019 at 6:05 AM.
