Doctor tax dropped from Connecticut health reform bill

But a lawmaker warns that the tax could reappear in a new form as the measure works its way through the Legislature.

By By Doug Trapp, AMNews staff. April 2, 2007.

Washington -- Connecticut lawmakers -- for now at least -- have stripped a tax on doctors out of a measure to expand health care access to the uninsured.

Four Democratic legislators are backing the $900 million Connecticut Healthy Steps bill. The legislation would create a subsidized insurance pool for the 400,000 uninsured state residents, increase Medicaid physician payment by 30% and help small businesses provide health insurance.

The measure had proposed paying for the reforms, in part, with a 3%, $600 million tax on physicians' and hospitals' net revenues. It still includes a $40 million sales tax on elective cosmetic surgery and a 24-cent, $25 million tobacco tax increase.

But the Insurance and Real Estate Committee voted 18-1 last month to remove the proposed physician and hospital tax from the bill for further discussion, said a panel co-chair, Rep. Brian O'Connor, one of the bill's sponsors. "There wasn't a consensus on how to fund [the plan]," he said.

Still, that doesn't mean the tax is dead. It could be revised to apply only to physicians who accept Medicaid patients or reintroduced at a lower percentage, he said. The bill still must pass through four other committees.

Physicians were up in arms over the tax. Connecticut State Medical Society Chair Michael Deren, MD, a thoracic surgeon in New London, said he appreciated state efforts to cover the uninsured, but a "wellness tax" would decrease access to care by further financially burdening physicians.