Statewide Iowa (RI) — Governor Kim Reynolds says a temporary tax hike on HMOs and the companies that manage Iowa’s Medicaid program is a last resort to dealing with red ink in the Medicaid budget.
The bill raising the premium tax from under one percent to 3.5 percent for nine months has cleared the legislature. It will qualify Iowa for matching federal funds, and Reynolds will sign the bill into law soon.
Reynolds says every state is seeing Medicaid costs rise partly due to an increase in severe illnesses.
Reynolds says she offered other ideas for filling the Medicaid deficit, including an increase in the tobacco tax and a 15 percent tax on vaping products.
Reynolds says it will avoid reducing services and medications currently available to Iowa Medicaid patients.
Reynolds says Iowa’s premium tax on HMOs will revert to less than one percent on October 1st, the lowest in the country. The governor and her fellow Republicans say it will be up to Wellmark and the other private companies that sold HMO policies to Iowa if premiums increase.
Democrats say businesses always pass along additional costs to consumers, and this is the wrong time to take a step that might ratchet up health insurance costs.
KIWA Staff Photo
