Sen. Vitelli introduces bill to support families who use assisted living facilities

AUGUSTA — On Tuesday, Sen. Eloise Vitelli, D-Arrowsic, introduced a bill to provide financial relief to families who use assisted living facilities. LD 527, “An Act To Exempt MaineCare Appendix C Private Nonmedical Institutions from the Service Provider Tax,” was the subject of a public hearing in the Legislature’s Taxation Committee.

“For Mainers in need of assisted living arrangements, nonmedical assisted living facilities provide a necessary service. Most of the Mainers who choose this option are older, or are living with a disability. Aging is not inexpensive, and the level of care we need as we age is often unpredictable — and unpredictably expensive,” said Sen. Vitelli. “One concern I’ve heard time and again is in regard to the service provider tax. The additional burden the service provider tax places on individuals and families can reach into hundreds of dollars on each monthly bill.”

Maine is one of 40 states that have instituted a tax on nursing homes. This allows tax revenue to be generated based on the nursing home’s gross receipts. Nursing homes can then be reimbursed for the tax under Medicaid. However, taxes on private nonmedical institutions, also called assisted living facilities, can not be reimbursed by Medicaid. LD 527 would remove state taxes for facilities that are not eligible for a reimbursement. 

“This is a convoluted tax, and we have asked for its repeal in the past,” said Rick Erb, president and CEO of the Maine Health Care Association, in testimony supporting the bill. “When it was first proposed, the choice we were given was to accept the tax or take a straight rate cut that would have put some facilities out of business. The inequities have only worsened since then.”

The bill faces further action in committee.