Statewide Iowa (RI) — Insurance companies and other opponents of a temporary state tax increase on HMO premiums are urging House members to abandon the idea.
Governor Reynolds and Republican lawmakers say the tax increase will qualify Iowa for a matching amount of federal funds that will be used to cover higher costs in Iowa’s Medicaid program.
Iowa Taxpayers Association President Nate Ristow says lawmakers would be able to cover the $90 million hole in the Iowa Medicaid budget if the entire state budget hadn’t increased more than five percent this year.
Scott Sundstrom, a lobbyist for Wellmark Blue Cross Blue Shield, says it’s a tax increase of just over $24 million for Wellmark, and that’s a $115 premium increase for every Iowan covered by the company’s HMO.
The tax is proposed for Wellmark as well as the three private insurance companies that manage Iowa Medicaid claims.
Matt Chapman of Waukee, an advocate for mobile home park residents, says many vulnerable Iowans depend on Medicaid, but those private Managed Care Organizations, or MCOs, aren’t serving their needs.
Logan Shine, state director for the National Federation of Independent Businesses, says surveys of the group’s members show those that still offer health insurance as an employee benefit believe it’ll soon become unaffordable.
The tax hike is scheduled for debate in the Iowa House tomorrow.
The Republican who leads the House Appropriations Committee says Iowa taxpayers shouldn’t have to cover the shortfall in Iowa’s Medicaid program when insurance companies make profits running the program.
KIWA Staff Photo
