Could amendment 5 result in taxes on medical care?

Amendment 5, if passed by voters in August, allows the Missouri legislature broad powers to raise taxes or create new ones in order to offset and eliminate the state income tax. However, opponents argue the law's lack of specifics on what will be taxed opens the door for all kinds of possibilities, including taxing medical care and prescription drugs.

"There are really no exemptions to what amendment five could tax," argues Dr. Priya Pal specializes in HIV basic and translational research. She is concerned about how this could impact patient's budgets.

"If medications, medical imaging, doctors visits, admissions to the hospital all become taxed in ways that they haven't been that's going to increase the healthcare burden."

Leslie Ortbals lives with multiple chronic illnesses and says even raising the costs of life's other expenses could put her in tough choices.

"That's going to be harder and harder to make those appointments and make those medications. I might have to choose between a meal and medication."

In a statement to KMOX, Missouri Governor Mike Kehoe says he will never support taxing medical care. Still, physicians like Dr. Christian Hendrix say until the exemption is codified, the concern remains.

"Amendment five does not exclude healthcare. That leaves an open question."

Greene County State Rep Bishop Davidson is a and cosponsor of the bill placing amendment 5 on the ballot. He tells KMOX's Hancock and Kelly that's not happening.

"Federally we are required to exempt almost half healthcare, medical services out of the gate."

However, federal law does not categorically prohibit a state from taxing medical services. A Missouri tax on doctor appointments or treatment would not automatically violate federal law simply because it taxes medical care.

The main federal risk would arise if the tax is structured as a health-care-related provider tax. Medicaid rules generally require such taxes to be broad based, uniformly imposed, and free of hold-harmless arrangements.

Davidson believe most Missourians would benefit from eliminating the sales tax and offsetting it with other taxes. He points to a recent study that shows eliminating the income tax will save Missourians thousands.

"As our economy has moved from goods to services, our sales tax has remained 100 years old."

Davidson argues Missouri's tax code needs to better reflect its economy.

It said the average wage earner in Missouri stands to benefit... net gain, new dollars in their pocket, $2,704-$2,872 a year."

Missouri voters will decide on amendment five in the August primary election.