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House Republicans urge Democrats to not restore tax on health care

Friday, January 18, 2019


ST. PAUL – Minnesota House Republicans recently hosted a press conference to urge the new Democrat House majority and Gov. Tim Walz to not raise health care costs on Minnesotans by restoring a 2-percent tax levied on most patient services in Minnesota.

The so-called sick tax applies to procedures such as baby deliveries, chemotherapy treatments, routine doctor visits, emergency room visits, and more. The tax, which was eliminated as part of bipartisan legislation passed by a Republican-controlled Legislature and signed into law by Gov. Mark Dayton in 2011, is set to expire starting Jan. 1, 2020.

It is estimated that restoring the tax would result in a more than $600 million increase on health care costs for Minnesotans next year alone.

“Our health care system is a mess and it’s sickening,” said Rep. Joe McDonald, R-Delano. “I hear over and over from people who are just being crushed by unaffordable health care costs. Allowing the sick tax to expire would provide some relief for people. We can replace the sick-tax revenue without having to restore it. We could start with adopting free-market health reforms to drive competitive pricing for health insurance, along with eliminating waste, fraud and abuse in our state system. We still must to take care of people who need assistance and we can accomplish that without extending this unnecessary tax.”

Walz recently called it a “nonstarter” to end the tax, while House Health and Human Services Finance Division Chair Tina Liebling, D-Rochester, said it was “essential” to restore the tax or replace its revenue.

Last year, numbers from the Minnesota Department of Human Services budget director indicated that Minnesota is losing tens of millions of dollars per month by failing to implement periodic data matching, which helps verify program eligibility for Minnesota public programs. The DHS has acknowledged that fraud within the childcare assistance program is a “big problem,” costing the state tens of millions of dollars, and the non-partisan legislative auditor has released multiple reports detailing hundreds of millions in public program benefits going to recipients who are not eligible.


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