As reported by The Des Moines Register (“Winners, losers seen in ‘granny tax’ plan,” March 17, 2009), Iowa lawmakers are debating a bill that would impose a new tax on the state’s nursing homes. The tax would equal roughly 3 percent of residents’ cost of care and generate approximately $33 million per year.

The tax was proposed by Steve Ackerson of the Iowa Health Care Association, who says 400 nursing homes would get back more than they pay in, 21 would get back less, and 16 would be exempt.

He and other supporters say the $33 million could be leveraged to bring in about $60 million in federal matching Medicaid dollars.

But physician and Republican Sen. David Hartsuch says the Democratic-controlled state legislature stripped out provisions that would have guaranteed the tax dollars would be reserved exclusively for this purpose.

“Originally, the funds were supposed to be used to raise Medicaid reimbursement rates,” he says. “This would increase the amount of Medicaid matching funds that we get from the federal government. If these are used for other purposes, then we will not get these matching funds.” He says the altered proposal is now “merely a revenue bill.”

Lobbyist Anthony Carroll of the Iowa AARP office has expressed a different concern. “We’re saying, ‘If you’re going to do this, we’ve got to make sure a sizable amount goes to direct-care workers,” he says.