MINNEAPOLIS, Updated 3:09 p.m. CDT April 11, 2006 --MMA President David Luehr testified Monday about a proposal that would try to eliminate the sick tax surplus and spend it at the same time.

Sound like muddled policy? Luehr thought so too.

Luehr testified before lawmakers on the House Health Policy and Finance Committee that the MMA supports a proposal that would effectively cut the sick tax by right-sizing it every two years so it would not generate a surplus.

The provision would require the commissioner of finance to reduce the 2 percent tax on providers (known as the sick tax) if a surplus was projected in the Health Care Access Fund.

The provision was included in HF 3697, which is the House omnibus supplemental budget bill for health and human services.

This omnibus bill not only includes the right-sizing provision, it also calls for spending out of the Health Care Access Fund, which would essentially siphon off much of the surplus and leave little to right size.

Luehr said that during the last four years, lawmakers have taken about $400 million from the Health Care Access Fund that was used for spending not originally contemplated when the sick tax was instituted to fund MinnesotaCare.

He expressed disappointment that the omnibus bill under consideration continued a trend of raiding the Health Care Access Fund.

The new spending recommendations would use $87 million this biennium from the health care access fund to help fund Minnesota’s high risk insurance program, Minnesota Comprehensive Health Association (MCHA) and $60 million for the program the next biennium.

The bill also siphons off $30 million each biennium to the general fund.

“With all the new Health Care Access Fund spending obligations before the Legislature this year, the “right sizing” provision will have very little impact on reducing the sick tax,” Luehr said.