Senate approves health claims tax extension

May 17, 2013

LANSING, MI (AP)--   The Michigan Senate has voted to continue taxing health insurance claims but has left unresolved the problem that the levy is bringing in far less than expected. 

The Senate voted 25-13 on Thursday to continue a broad-based 1 percent health care claims assessment until 2018. The tax is scheduled to end at the end of this year.

The tax is designed to make sure Michigan qualifies for matching federal money for Medicaid, which provides health insurance to 1.9 million state residents.

The tax took effect in 20102 but is generating at least $130 million less than projected. The Senate bill now goes to the House.

Republicans are hesitant to increase the tax. An alternative proposal would add a $25 fee to auto insurance premiums.