The
Senate Michigan Competitiveness Committee reported several bills on Wednesday
to end the Health Insurance Claims Assessment (HICA) to fund the state’s
Medicaid program. This package was introduced on Tuesday.
SB
987, SB
988, SB
989, and SB
990 redirect the state’s use tax on Medicaid health maintenance
organizations programs to programs benefitting from income tax revenues. The
federal government recently called for the state to end the use tax to fund
Medicaid, stating it is not broad-based enough. The income tax is inherently
broad-based, so by allowing this to fund Medicaid and then redirecting the use
tax, the state can appease the federal government.
Problems
surrounding HICA are two fold; one, it did not produce the revenues expected at
the time of its inception leaving the state to compensate for the $400 million lost
in matching funds for the federal government, and two, a recent U.S. Supreme
Court decision could mean a 6th U.S. Circuit Court of Appeals
decision declaring HICA illegal.
Dominick
Pallone, the deputy director of the Michigan Association of Health Plans has voiced
his support along with Wendy Block of the Michigan Chamber of Commerce. Both
parties believe this package solves HICA issues on all accounts from employer
to the budget.
It
is unclear whether Governor Rick Snyder is supportive of the legislation. The
package moves to the House floor for further consideration.