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Unique Medicaid proposal hits roadblock

Patient Financial Services Weekly Advisor, March 31, 2006

A unique proposal that would use local sales tax revenue to fund a New York county's Medicaid program was put on hold for additional information by a chairman of a committee of the County Legislature, reports the Rochester (NY) Democrat & Chronicle.

Under the proposal, the state cap on Medicaid, which would limit the increase in what the county pays for Medicaid to a 3% boost each year in 2008, would be replaced by a cap based on the growth in sales tax revenue.

However, the plan has met strong opposition from local officials because it means less sales tax revenue for the city, towns, suburban school districts, and villages of Monroe County.

The state now keeps half of the 8% sales tax with the other half distributed to local governments and suburban schools.

Legislature President Wayne Zyra, who developed the proposal, estimates that the local pot of sales tax money would grow to $407 million by 2008. County government now pays for the local share of Medicaid. But under Zyra's plan, the county government could easily pay the $171.5 million in county Medicaid costs in 2008 with the sales tax money.

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