Lawmakers heard supportive testimony on a pair of bills aimed at increasing access to healthcare for thousands of the most vulnerable patients by providing tax breaks for healthcare providers, though some senators had their reservations. 

Bill 118-38, introduced by Sen. Sabrina Salas Matanane, would provide a tiered exemption from the business privilege tax for Medicaid receipts.

Dr. Hoa Nguyen with the American Medical Center was among those who testified in support of the measure during a public hearing on Monday. 

“There’s not a lot of clinics that provide primary care to probably the most important group of patients– the indigent population on Medicaid,” Dr. Nguyen said. 

“Medicaid is by far the lowest payment of any insurance company, federal or private on the island. So a lot of clinics decide not to take Medicaid, including a lot of specialty clinics,” he added.

Similarly, Bill 93-38 by Gov. Lou Leon Guerrero would exempt amounts received from Medicaid payments for eligible services by health care providers from the BPT.  

Bureau of Women’s Affairs Director Jayne Flores underscored that the OB-GYN shortage on Guam is exacerbated by the fact that even clinics where family practitioners are trained to deliver babies do not take Medicaid.

“About two months ago, a young woman visited the Bureau of Women’s Affairs Office. She was several months pregnant. She had left her job under very stressful circumstances and did not have healthcare. She had just enrolled in Medicaid and told me it was very difficult to find a doctor because many clinics on the island do not take Medicaid and asked if I could help,” Flores explained. 

Guam Memorial Hospital Authority Administrator and CEO Lillian Perez Posadas supported both measures but recommended to substitute the bills to provide “one-hundred percent rebate on BPT for Medicaid payments,” rather than a full exemption, and to have the Guam Economic Development Authority promulgate the rules and regulations. 

Department of Public Health and Social Services director Theresa Arriola added a potential alternative to the bills is to leverage the Medically Indigent Program as a supplemental program for Guam Medicaid. 

“Under this approach, Medicaid will continue to provide primary coverage while MIP addresses any shortfalls. This proposed method maximizes local financial resources while offering an effective and efficient solution to enhance provider participation,” Arriola said. 

Still, some senators had reservations about giving healthcare providers a tax break suggesting it would take away funding from the hospital, the Guam Cancer Trust Fund and others. Sen. Therese Terlaje said it was like “robbing Peter to pay Paul.” 

“Even the revised language that you three are proposing that we are going to rebate it is not going to lessen that impact. We are still going to cut that from– I guess it’s a trick that we’re going to continue to give GMH and the others that are receiving BPT and we’re going to cut it somewhere else,” Terlaje said. 

The business privilege taxes accounts for about 39.35% of total general fund revenues.

According to the fiscal note provided by the Bureau of Budget and Management Research, about $6.6 million in BPT collections is assumed to be collected annually. 

BBMR finds that “any exemption or reduction to the BPT rate should have an effect on the overall collections of BPT. However, absent specific information as to the percentage portion of the Medicaid payments as part of the overall BPT revenue collections, as well as comment from DRT, a more detailed fiscal impact of this exemption cannot be determined at this time.”