State Legislature
11:18 am
Thu June 30, 2011

Tax on health insurance claims approved

This just in from Michigan Public Radio Network's Laura Weber:

The state Senate has approved a tax on health insurance claims. The measure is necessary to ensure Michigan continues to receive about $800 million from the federal government for Medicaid. The federal government is expected to rule later this year on whether the state's system for funding Medicaid is legal.

The Senate had put the issue up for a test-vote yesterday but it didn't pass. As Rick Pluta noted in a story before the second vote took place:

Governor Rick Snyder has been pressuring the Legislature to adopt a one percent tax on all health insurance claims. That would put Michigan in compliance with federal rules. Otherwise, Michigan could lose 10 percent of its funding for the entire Medicaid program. The claims tax would generate $400 million, and qualify the state for twice that much in federal funds.