Republicans in the Iowa Senate have passed a bill that would raise the tax on HMO health insurance plans, sending it to the governor’s desk for her signature.
The bill (HF 2739) would temporarily raise the tax paid by insurance companies on HMOs from less than 1% to 3.5%. Gov. Kim Reynolds and other GOP leaders said it will let the state tap into more federal funds to help cover the state’s Medicaid budget deficit.
Democrats said the tax hike will be passed on to Iowans and businesses in the form of higher health insurance premiums at a time when people are already struggling to afford health care.
The bill also includes an additional $90 million for Medicaid this fiscal year, and it would draw $350 million from the Taxpayer Relief Fund to cover part of the state’s overall budget deficit.
Read more about the bill.