Under the provisions of the current law, a one percent tax is
placed on a majority of health claims in an effort to generate revenue for the
state Medicaid program. However, the tax is failing to generate the $400
million that was originally projected and needed to fully fund the Medicaid
program.
The budget currently assumes that the tax will generate the full
$400 million; therefore, lawmakers will need to find a solution for the
shortfall before Oct. 1. Two options to
address the gap include tapping into Medicaid Trust Fund or reducing Medicaid
services or provider payments. Another alternative
to fill the shortfall would be the automobile no-fault insurance reform
proposal, currently before the full House, which includes a new $25 assessment
on car insurance policies.
The House returned Senate Bill 335 to the Senate for final concurrence
and then it will be sent to Gov. Snyder for his signature.