Washington, D.C. – North Dakota U.S. Senator Kevin Cramer is defending himself and members of the Republican Party who are seeking to close a Medicaid loophole that the lawmaker says is used by states to get more money out of the federal government.
The New York Times published an article recently about how the GOP is trying to get rid of a method used to tax hospitals and nursing homes to increase their reimbursement.
The Times story displayed charts on how the so-called “provider tax” is utilized in hospital bills.
Listen: North Dakota U.S. Senator Kevin Cramer with Scott Hennen
For example, on a $1,000 bill, the state will first pay it in full with its own Medicaid funds.
The federal government will then reimburse 60% of the state’s cost, leading to $600 in funds returned.
But if a state added a tax that increases the bill to $1,030, states can receive more matching funds based on the new total and reimbursement formula.
The reimbursement would now be $618, which is an additional $18 for states.
“I call it legal theft,” Cramer told The Flag’s What’s On Your Mind? “It’s money laundering.”
“You tax the provider for that difference. You literally get more money from the federal government.”
Cramer claimed that North Dakota does not have such a provider tax, but the Times article referred to data from the Kaiser Family Foundation that shows all states but Alaska have at least one such tax.
Congressional Republicans believe closing the loophole could save some $600 billion over the next decade in federal spending.
But Democrats have argued Medicaid cuts will adversely harm the poor who rely on the government healthcare program.
“It’s easy to say they’re [Republican lawmakers] cutting benefits,” said Cramer. “The reality is we’re enhancing the program for poor people.”
