Sisters of Charity statement on the Ohio Senate possible veto override of Health Insuring Corporation Franchise Fee budget provision

The Sisters of Charity Health System strongly supports Governor Kasich’s veto of the Health Insuring Corporation Franchise Fee budget provision, which could be in jeopardy as the Ohio Senate returns to the Ohio Statehouse for a legislative session that starts today.

Governor Kasich on June 30 vetoed 47 line items in the two-year budget, which went into effect July 1. Five days later, the Ohio House met and overrode 11 of those vetoes, which the Senate will now consider.

The Health Insuring Corporation (HIC) Franchise Fee is gaining attention among health systems because it is a new tax on health insurers. The proposed 7.2 percent tax would require an exception to the federal test that currently caps health care-related provider taxes at 6 percent.

Kasich vetoed this provision because the Ohio Department of Medicaid already sought—and received—approval from the federal government for a HIC waiver last year after demonstrating compliance with federal requirements, including a stipulation that the tax be broad based and not violate hold-harmless provisions.

The General Assembly’s push to ask the Trump Administration for a $207 million tax increase on health insurance plans so it can increase funding to local governments may, on the surface, appear simple and harmless. Nothing about the federal health care system is simple and harmless, however.

If the Trump Administration rejects the General Assembly’s request for a tax increase, it doesn’t simply mean that Ohio’s local governments miss out on an extra $207 million that they don’t currently get. It could actually take Ohio backwards—significantly backwards—and result in Ohio’s hospitals and health care providers losing $1.2 billion that they currently receive and depend on. Furthermore, if the Trump Administration approves the General Assembly’s tax increase, it is almost certainly temporary and our hospitals and health care providers would then definitely lose $1.2 billion that they currently receive and depend on.

The Sisters of Charity Health System’s position is to maintain the governor’s veto and we’re asking senators NOT to override his veto.

Click to see the Kasich administration’s talking points and a fact sheet on this topic.