Group sues state over new health insurance tax

Dec 22, 2011

A new state tax could be in jeopardy. Starting January 1, every time an insured patient sees a doctor and the claim is submitted to an insurance company for payment, one percent will be added to the bill. The money will help fund Michigan’s Medicaid program.

The Self-Insurance Institute of America is challenging the tax in federal court.

"This will essentially put in new administrative requirements for how health insurers administer health claims," said SIIA COO Michael Ferguson, who says that’s not allowed under federal law.

The tax is expected to raise $400 million a year.

It’s not clear what share of revenues raised by the tax would come from self-insured health plans. But Ferguson says nationally, the plans make up about a third of the private health care marketplace.