A federal judge in St. Paul, Minn., has dismissed a suit by 13 union trust funds challenging a tax designed to finance the state's healthcare reform plan (June 28, 1993, p. 32).
U.S. District Judge Paul Magnuson disagreed with unions' argument that a 2% tax on the gross revenues of hospitals and other healthcare providers couldn't be applied to them because it violated the federal Employee Retirement Income Security Act of 1974.
The judge's ruling leaves intact a mechanism that provides 60% of the funds for the program, known as MinnesotaCare. So far, it covers 67,000 out of a total of 400,000 indigent and uninsured Minnesotans. But the program, which faces a projected $179 million deficit by mid-1997, may not be expanded without sufficient funds. The provider tax was expected to generate more than $70 million.