It has been said that the art of taxation consists of the ability to pluck the most amount of feathers from the goose with the least amount of squawking. A feather here and a feather there, and the goose, or tax payer, does not get too upset the thinking goes, until you pull a lot of feathers all at one. The property tax is a case in point, it hurts.

 
In the early 1990s, states started to quietly remove some tax feathers from health care providers. It started with taxing hospitals, then nursing homes, then home health agencies, and before you knew it every state in the country except Alaska had some form of provider tax. The provider tax works by requiring health care providers to send tax dollars to the state, then in turn the state takes those dollars and uses them to draw down and receive more dollars from the federal government through the Medicaid program. The states then take those dollars they receive and pay their health care providers to provide access to health care. It is little wonder why this convoluted process has been dubbed “Medi-Scam.”

 
The federal government has unsuccessfully attempted to have the provider tax declared unconstitutional. They have been able to limit the amount of the tax but without question the significance of the tax is huge on the state and national level. Not only has the breadth of the tax grown to cover more providers but the actual tax rate has skyrocketed. Nursing Homes for example started with $50 per bed tax. Today the tax is more than $4900 per bed annually. Vermont, like many other states, has drunk heavily from the provider tax Kool-Aid pitcher and now is very dependent on this funding source to operate our health care programs. In fact, Vermont raises $164 million annually from provider taxes, which is more than half of the Vermont State Health Care Resources Fund.

 
So, what does all of this have to do with you and me? Our Home Health industry in Vermont has been badly wounded by the way the provider tax has been applied. Home Health is the connective tissue, the glue, that holds much of health care together for thousands of Vermonters and the health care system as a whole.

 
Federal cuts for the last several years to Medicare, with more coming on the horizon, coupled with a flawed provider tax design, is putting these essential services at risk. Vermont taxed Home Health, added more people and services for them to provide for, but continued to under pay them. Portions of the provider tax revenue drawn down from the federal government, while paying for more to be served, should have gone into more reasonable payment rates. Instead the revenues were all used for services ignoring the need to compensate at realistic rates. In short the more Home Health does for Medicaid, the more it loses.

 
We cannot expect such a crucial player in the Vermont health care landscape like Home Health agencies to hold bake sales to balance their books. Their mission requires them to serve us all. We now need to fix the payment systems that are hurting them. I hope the legislature can find a life line for some short term relief while a longer lasting solution is found. The Home Health tax goose has no feathers left to pluck, action is needed now.