LANSING, MI (AP)-- Michigan's 0.75 percent tax on health insurance would be continued until 2025 under legislation advancing in the Legislature.
The House voted 83-23 Tuesday to extend the health insurance claims assessment, which helps pay for Medicaid services for low-income residents. The tax will go away in two years if the bill is not enacted.
The Michigan Chamber of Commerce calls the vote a "giant tax hike" to pay for "social welfare programs." But Republican House Appropriations Chairman Al Pscholka says his bill sent to the Senate gives certainty to businesses and limits the yearly amount collected.
If the tax is not extended, Medicaid spending could be cut by roughly $1 billion annually starting in the 2017-18 budget year unless another source of funding is used, according to the House Fiscal Agency.
