Gov. Kim Reynolds said a proposed temporary tax increase on Health Maintenance Organizations would help the state address a shortfall in Iowa’s Medicaid budget.
Some insurance lobbyists strongly criticized the proposal earlier this week, saying it would be a 238% tax hike that would get passed on to customers.
Reynolds said Wellmark’s claim that it would cost the company $50 million was wrong, and the estimated impact is half that.
“We have a Medicaid shortfall. I mean, that’s the main driver of this, and that would help address that,” Reynolds said. “It’s pretty significant.”
The bill (SF 2464) advanced through a Senate committee this week. It would also double the amount of money pulled from the Taxpayer Relief Fund to cover this year’s state budget deficit. Reynolds said she didn’t put that in the bill.
Democrats opposed the bill, saying it would raise health insurance costs for Iowans.