Starting in 2026, doctors will no longer have to pay the state’s general excise tax on health care for patients on Medicare, Medicaid and Tricare.
It’s a major win for medical professionals who have had to pay a 4% tax to care for those on government health plans.
Under the law, doctors are not allowed to pass those costs on to patients. That’s why some doctors in Hawaiʻi have been reluctant to take on patients on government plans — many of whom are often already underserved.
But Gov. Josh Green's signed measure would eliminate the tax, aimed at making health care more accessible.
Dr. Jason Ching, a pediatric dentist on Oʻahu, said 40% of his patients are on Medicaid.
“For me directly, this will impact me and allow me to see more Medicaid underserved which is the whole reason why I moved back home to Hawaiʻi,” he said.
“In a short way, it is a competition amongst the states and if you're so highly taxed then that's why we're losing our providers. So yeah, I got a little emotional today. It was good stuff.”
Dr. Penelope Dodson, another pediatric dentist, explained that the new law will allow more doctors to take on Medicaid and Medicare patients.
“Even providers, who potentially didn't take Medicaid and Medicare before, will opt in now,” Dodson said.
“It's an incredible impact for private practice practitioners,” she said.
Green said that about half the state is either on Medicaid and Medicare, or eligible for the program.
He hopes the tax cut will make Hawaiʻi more desirable for health care professionals to address the state's shortage of doctors.
