Medicaid voluntary donations & provider specific taxes: a sirens' song.

Faced with a rising Medicaid budget, increased demands for eligibility expansions from the federal government, and a declining economy, many states have turned to the use of voluntary contributions and mandatory taxes paid by health care providers to raise money for Medicaid and reap federal matching payments. On September 12, the Health Care Financing Administration proposed eliminating many, if not all, of these financing plans. Such action would throw states into chaos as governors and legislators search for needed funds in the middle of their fiscal years. The federal government created the demand for such financing approaches and cannot simply shut the money valve and assume the problems will go away. With debate already begun on broad reform of the health care system, the regulations should be withdrawn so that an overhaul of Medicaid can be considered.