Michael Cannon writes that the Rendell administration’s plan to tax Philly and Pittsburgh hospitals, but give them higher reimbursements from Medicaid is a great plan … for Pennsylvania. Of course, he also remarks that it defrauds non-Pennsylvanians.
Basically the higher Medicaid payments from the state will be matched by the federal government (i.e. taxpayers from PA and other states), but by then taxing the hospitals, the state basically takes the money back. Nice scheme.