AlabamaAlabama collects its private hospital tax without an end date
Alabama’s private hospital tax supports Medicaid hospital payments without a scheduled end date, provided federal funding and the law’s hospital payment protections remain in place.
What it does
Private Alabama hospitals pay a tax with no scheduled end date to support Medicaid hospital payments. It remains tied to federal funding and hospital payment protections.
Publicly owned and state-owned hospitals transfer money to secure federal matching funds for their Medicaid hospital payments. The requirement has no scheduled end date and depends on federal funding.
Argument forFunding without a scheduled end date could help hospitals plan for Medicaid payments, provided federal matching money remains available.
Argument againstPrivate hospitals could keep paying the tax without a guarantee that their Medicaid hospital payments cover what they pay.
More detail
Alabama collects a tax from privately operated hospitals without a scheduled end date. The rate is 6% of net patient revenue. Hospital cost reports are updated each year to determine that revenue. The tax depends on federal matching money remaining available at the approved rate and on meeting federal Medicaid tax rules. The tax stops if the law’s hospital spending, payment, or alternate care provider protections fail. Remaining money is refunded under the applicable rules. Private hospitals are not guaranteed hospital payments equal to or greater than their tax payments. The law took effect on October 1, 2026.
Publicly owned and state-owned hospitals transfer money to the Alabama Medicaid Agency without a scheduled end date. These hospitals provide the state money needed to draw federal matching funds for their hospital payments. Transfers must follow federal Medicaid funding rules. The program has no effect if federal matching money is unavailable at the approved rate. The law took effect on October 1, 2026.
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Where it stands
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Apr 9EnactedBecame Law
- Apr 2Ready to Enroll
- Apr 2EnrolledTo Governor
- Apr 2Signature Requested
- Apr 2Delivered to GovernorMinor
- Apr 1Third Reading in Second House
- Vote recorded Motion to Read a Third Time and Pass - Adopted Roll Call 1135. Result: pass.Lower
- Vote recorded Third Reading in Second House. Result: pass.Lower
- Apr 1Motion to Read a Third Time and Pass - Adopted Roll Call 1135Passed House
- Mar 31Reported Out of Committee Second House
- Mar 31Read for the Second Time and placed on the Calendar (Ways and Means General Fund)Minor
- Mar 12Read for the first time and referred to the House Committee on Ways and Means General FundMinor
- Mar 12Pending Committee Action in Second House (Ways and Means General Fund)
- Mar 11Third Reading in House of Origin
- Vote recorded Third Reading in House of Origin. Result: pass.Upper
- Vote recorded Albritton motion to Adopt - Adopted Roll Call 823. Result: pass.Upper
- Vote recorded Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 824. Result: pass.Upper
- Mar 11Finance and Taxation General Fund 1st Substitute Offered (Finance and Taxation General Fund)Minor
- Mar 11Albritton motion to Adopt - Adopted Roll Call 823Major
- Mar 11Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 824Passed Senate
- Mar 11Engrossed
- Mar 10Finance and Taxation General Fund 1st Substitute (Finance and Taxation General Fund)
- Mar 10Reported Out of Committee House of Origin
- Mar 10Read for the Second Time and placed on the Calendar (Finance and Taxation General Fund)Minor
- Jan 14Read for the first time and referred to the Senate Committee on Finance and Taxation General FundMinor
- Jan 14Pending Committee Action in House of Origin (Finance and Taxation General Fund)Introduced
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