Hawaii's 4 percent medical excise tax has been a burden on physicians treating patients with Medicare, affecting patient care, NBC affiliate KPVI reported Feb. 8.
Hawaii is one of two states that charge tax for medical services. It is the only state that taxes practices for Medicare, Medicaid and Tricare.
The state is also in the midst of a physician shortage.
Physicians opposing the tax share that practices are losing money by caring for these patients and that the excise tax applies to gross revenues even if practices are losing money providing care, according to the news outlet.
Ted Kefalas, director of strategic campaigns for the Grassroot Institute of Hawaii, in a written testimony obtained by KPVI said that eliminating the excise tax would save practices money and help hire more healthcare workers based on a study conducted by the organization.
"This would result in substantial savings for individual practices," Mr. Kefalas said. "According to the Grassroot Institute study, the savings from that base 4% [general excise tax] exemption would be about $5,275 each for the approximately 38,000 full-time workers in the medical industry. That's the equivalent to 6.7% of the average medical service worker's wage and 5.8% of current GET collections."
Multiple bills seeking to remove the tax have been filed in the state's legislative session this year.