South Carolina Lawmakers Consider Repealing Nursing Home Bed Tax That Helps Fund Medicaid

Legislators in the South Carolina House are proposing to repeal a $3 dollar per resident per day franchise fee charged to the state's nursing homes, the Charleston Post and Courier reports. In January 2002, the state adopted the tax as a means to pump more money into the state's Medicaid program. Although the intent of the bill was that only nursing homes that receive Medicaid funds would pay the tax, all facilities received bills for the fees because federal law does not permit states to selectively tax nursing homes. Nursing homes that do not care for Medicaid beneficiaries objected to the tax, and other opponents said the bill calling for the tax was approved "with almost no public debate." State Rep. Jeffrey Young (R) said, "It was terrible. If [the bill] was debated, it would have never got as far as it did." Now legislators hope to repeal the tax through a compromise amendment in a budget bill currently before the state Legislature, state Rep. Rick Quinn (R) said. The amendment would eliminate the tax beginning July 1, and the state would use $7 million in tobacco settlement funds to replace funds generated by the tax. The amendment also would allow nursing homes that do not serve Medicaid beneficiaries to be reimbursed for any taxes they paid under the old bill. Quinn said, "I think most people are prepared to put this behind them" (Maze, Charleston Post and Courier, 3/14).