Relating To Health Care Services.
If enacted, SB1128 could significantly strengthen healthcare access in Hawaii by reducing financial disincentives for operating medical practices. Currently, practitioners are taxed on gross receipts, which, combined with lower-than-national-average reimbursements for services, threatens the viability of medical practices. An exemption from the general excise tax is aimed at making it easier for physicians and advanced practice registered nurses to maintain and grow their practices, addressing the ongoing physician shortage and potentially improving patient care accessibility throughout the state.
Senate Bill 1128 addresses a critical shortage of healthcare providers in Hawaii by proposing an exemption from the general excise tax for medical services provided by physicians and advanced practice registered nurses acting in the capacity of primary care providers. The bill seeks to alleviate the financial burden on these healthcare professionals, so they can better serve communities, especially those on neighbor islands that experience even more severe shortages. The legislation recognizes the urgent need for action as highlighted by a 2021 workforce assessment, documenting a 22% statewide shortage of physicians.
While the bill aims to support healthcare providers, it may attract scrutiny regarding its financial implications for state revenue, as the general excise tax is a key source of funding for various services. Opponents might raise concerns about the potential for increased reliance on state funds to fill any budgetary gaps created by the proposed tax exemptions. The discussion may center on balancing the need to support healthcare providers and ensuring the state's fiscal health. Additionally, some may question whether this legislation will adequately address the deeper systemic issues contributing to the physician shortage.