State Senator John Moolenaar (R-Midland) said Tuesday that he expects to report a Senate proposal for the Department of Community Health (DCH)for the upcoming fiscal year budget. In that proposal is $115 million General Fund dollars aimed at filling a revenue shortfall associated with the Health Insurance Claims Assessment (HICA).

Created by Governor Snyder in September 2011, the assessment requires certain third party administrators, carriers and self-insured entities to pay 1 percent on certain paid health care claims. However, the tax has not generated the revenue it was supposed to provide, and there has been no long-term solution to fix the problem. House Speaker Jase Bolger (R-Marshall) and other members of his caucus proposed a fee in an auto insurance reform proposal to help fill the shortfall, but Mr. Bolger said recently that provision will be removed. The House concurred with the Governor’s proposal and did not include funding for the HICA revenue shortfall in its proposed DCH budget.

Senator Moolenaar said he plans to fund it in the Department of Community Health Proposal, but acknowledges it will have to be negotiated on in the future. He went on to say that he expects to report the bill, Senate Bill 763, out of committee. It will then be in the hands of Senator Roger Kahn (R-Saginaw Township) and the Senate Appropriations Committee. Graduate Medical Education (GME) funding and rural hospital funding will also be looked at by Senator Moolenaar and the subcommittee. Governor Snyder proposed removing $4.3 million in one-time GME funding, but the House proposal approved funding for GME at about $2.9 million so long as it met certain boilerplate conditions.

The Governor also proposed eliminating a gross reduction of $35.6 million ($12 million General Fund). The House proposal replaces the General Fund dollars with certain hospital revenue allowing payments to continue at the same gross amount. It also shifted $3.1 million from the General Fund to state restricted revenue for the state retainer share of the assessment.