Legislature OKs tax credits for donations to rural health care

After some maneuverings at the eleventh hour of its 2016 session, the General Assembly passed a bill that would allow an individual or corporation to get a state tax credit for donating money to a rural health care organization.

The proposal had appeared to be blocked recently when a Senate health committee rejected the idea. But the tax credits passed in the after-midnight voting on the last day of the legislative session Thursday.

The rural health donation language was tacked on to Senate Bill 258, which dealt with general tax assessments, in the aftermath of the Senate Health and Human Services Committee vote March 14.

The creator of the proposal, Rep. Geoff Duncan, a Cumming Republican, had told the Senate Health and Human Services Committee that rural health care in Georgia is “at crisis level.’’ He said the proposal would potentially help 39 rural hospitals that fit the criteria listed in the legislation.

The amount of tax credits available was lowered from $100 million annually to $50 million in the first year, 2017. The amount for the second year will be $60 million, and for the third year, $70 million.

The receiving organization must be a nonprofit, must treat patients who are indigent or on Medicaid or Medicare, and must be located in a rural county.

The legislation will help many rural hospitals, said Jimmy Lewis, CEO of HomeTown Health, an association of rural hospitals in the state. “This is a monumental turn in the life of rural health care.”

Rep. Duncan
Rep. Duncan

The General Assembly on Thursday evening also approved saving accounts for people with disabilities to help them live independently and not lose their Medicaid health insurance or Supplemental Security Income (SSI) benefits. The savings could pay for qualified expenses such as housing, transportation, education and personal support services.

Other health-related bills that passed in the final hours included legislation setting strict timelines for testing rape kits — packets of biological evidence preserved by health care workers for use in rape cases.

Also making the cut was a proposal to bring the Fulton County Department of Health & Wellness under state control. Of the 159 county health departments in the state, Fulton’s is the only one that basically operates independently.

Bills that did not pass include proposals to allow more health conditions to be treated with medical marijuana in Georgia, and to establish a minimum commission for health insurance agents.

On the rural health tax credits, Duncan and other Republicans have said the legislation would boost the economies of rural areas.

But previous debate on the proposal also included a push from Democrats to spend such funds on Medicaid expansion, which they said would help rural hospitals and extend insurance coverage to hundreds of thousands of Georgians. (Treating a lower percentage of uninsured people helps a hospital’s bottom line.)

The Affordable Care Act encourages states to expand their Medicaid programs, with the federal government providing additional funds for this project.

Most states have approved expansion. Georgia is one of the states that has not done so, with the Republican-controlled leadership saying it would ultimately be too costly.

Four rural hospitals have closed in Georgia since the beginning of 2013. A fifth, Hutcheson Medical Center in Fort Oglethorpe, briefly closed in December before reopening in a downsized format.

Hutcheson Medical Center
Hutcheson Medical Center

Many others are struggling to keep their doors open. Rural hospitals face some steep challenges, including a large percentage of patients who are likely to be unemployed, insufficiently insured or not insured at all.

Under the bill, the contributing individual would get a tax credit of 70 percent of the actual amount donated or $2,500 per tax year, whichever is less; or in the case of a married couple filing a joint return, 70 percent of the amount contributed or $5,000 per tax year, whichever is less.

A corporation or other entity would be allowed a tax credit in an amount not to exceed 70 percent of the actual amount expended, or 75 percent of the corporation’s income tax liability, whichever is less.

The contributor would get to specify the organization that receives the donation.

Duncan has likened the rural health proposal to the Georgia Student Scholarship Organization, which accepts and manages tax-credit donations funding scholarships for children attending private schools in the state.

“Through this, we’ve created a national conversation, where other states are looking at this,’’ Duncan said recently.