Politics
12:35 pm
Thu December 22, 2011

The new Michigan health claims tax faces a court challenge

Under a new law in Michigan, everyone who files a claim for a treatment or a checkup will pay a one percent tax to help fund Medicaid. The tax does not apply to co-pays or deductibles.

The new law got rid of a 6 percent use tax on Medicaid managed care organizations.

Governor Rick Snyder pushed for the one percent tax on health insurance claims to maintain medical coverage for low-income patients.

The tax was unpopular with fellow Republicans, but as the Michigan Public Radio Network Rick Pluta reported, Snyder said "he was committed to not rolling back health coverage for the poor during tough economic times."

He signed the tax into law last September.

Now the law is being challenged in court. From the Associated Press:

The Self-Insurance Institute of America Inc. filed a suit challenging the law Thursday in federal court. The suit says the Michigan assessment is pre-empted by federal law.

The suit seeks to block the assessment related to self-insured group health plans.

The Michigan assessment is scheduled to begin Jan. 1 to help fund Medicaid programs. It would be paid to the state by insurers or HMOs.

It's expected to raise about $400 million a year, helping the state draw roughly $800 million in federal funds for Medicaid.

The AP left a message seeking comment from Governor Snyder's office.