As Gov. Bill Haslam wrestles with cutting the state budget, he is no doubt relieved to hear that the Tennessee Hospital Association has agreed to extend a tax and prevent a $700 million hole in the TennCare budget.
It is not a done deal, it still requires legislation, but hospitals are expected to support the idea of extending a temporary tax on hospitals that raises $210 million that can be used to draw down $507 million in federal funds for TennCare. It was done this past year to avoid cuts, though two things might threaten a routine extension for another year. There may be a need to increase the state tax to get even more of a federal match or there might be an effort by some legislators to redirect the money to someone other than the health-care providers.
Meanwhile, popular state spending programs are expected to face an ax, since a tax increase by the newly elected conservative Republican majority in the state House is an impossibility.