Dentists battle provider tax plan

Posted
Thursday March 17, 2011

BENNINGTON -- Dentists are pushing back against a proposal by Gov. Peter Shumlin to expand an existing tax that draws down federal Medicaid money to include dental services.

Vermont State Dental Society Executive Director Peter Taylor presented House Speaker Shap Smith, D-Morrisville, and Senate President Pro Tem John Campbell, D-Windsor, with more than 4,500 signatures opposing expansion of what’s known as the provider tax. Shumlin, a Democrat, has proposed expanding the program from just hospitals to include dentists and insurance companies.

Expected to raise millions

The provider tax is currently assessed on the net revenue of hospitals and is used to draw down Medicaid money from the federal government.

The proposed tax on dental work would impose a 3 percent tax on the gross receipts of dental services. It is expected to raise about $6 million, which will bring about $9 million in federal funds. Dentists would receive the $6 million back in the form of Medicaid reimbursements, while the state would net $9 million for Medicaid.

According to VSDS, dentists will be forced to pass the tax on to consumers if the expansion is passed by lawmakers. The 3 percent tax would penalize people who utilize dentists for preventive measures for oral health, according to the group.

"It doesn’t make any sense to tax people who are taking a proactive role in their oral health and hygiene," Taylor said. "We believe it makes much more sense to tax items that hinder oral health like candy, soda and tobacco. Taxing health care to pay for health care is a math problem that just doesn’t add up."

VSDS said private dental practices account for about 80 percent Medicaid patients in Vermont, so many will receive see some of the tax returned. Still, most dentists who may see a benefit from the increased Medicaid payments believe the tax on dental services is the wrong way for the state to raise funds. VSDS would rather see other broad-based taxes or taxes on unhealthy products to raise revenue, according to Taylor.

Additionally, the tax could hinder efforts to recruit dentists to Vermont, he said.


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