State Legislature
7:45 am
Fri August 12, 2011

Claims tax awaits lawmakers’ return

A new tax on all health insurance claims waits for approval from lawmakers in the state House. As Michigan Public Radio’s Laura Weber reports, the tax is essential to balance the budget for the coming fiscal year.

Lawmakers must approve the health insurance claims tax in order to replace the existing tax on Medicaid HMOs. The federal government is expected to rule later this year that the existing Medicaid tax is illegal. To continue to receive funds from the federal government to help pay for Medicaid the state must approve the new tax on insurance claims.

Some lawmakers on both sides of the aisle have said they do not like the new tax proposal – Republicans saying they will not vote for a new tax, and some Democrats arguing that it would disproportionately affect some seniors who had their pensions taxed earlier this year.

The House is expected to approve the tax changes when lawmakers return in a couple weeks.