Long-Term Care

Proposed tax cut would hurt nursing homes

Contemporary Long-Term Care Weekly, August 29, 2006

A report by BDO Seidman, LLP, for the American Health Care Association (AHCA) states that in 2007 a proposed tax cut by the Bush administration will halve the provider tax rate that states can charge from 6% to 3%. The provider tax was originally implemented to alleviate state budget deficits and inadequate funding for Medicaid nursing homes, the report stated. The government currently matches the provider tax nursing homes receive, which is an estimated $3.8 billion; both amounts are returned to nursing homes to cover Medicaid nursing home costs, the BDO report stated. The tax cut will reduce the amount the government matches to $2.3 billion.

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