Hospitals support the $500 million tax as a way to pump more money into Medicaid, the health program for the poor. Most hospitals will get back more through increased Medicaid funding than they will pay under the new tax.
The program works by collecting the new tax from hospitals and putting it into the state Medicaid program, which should bring federal matching funds back to Illinois. Illinois Medicaid payments now cover only about 80 percent of hospital costs. Supporters say this plan will raise that to about 92 percent.
The governor says the tax is a way to help Illinois hospitals help people who otherwise wouldn't have access to health care.