Two of the largest business organizations in the state of Michigan have sounded applause for action by the State House of Representatives last week in repealing what the State Chamber of Commerce has called "an anti-competitive tax on individuals and businesses purchasing health insurance" in Michigan. They and the Michigan Manufacturers Association both stepped forward immediately following the repeal singing the praises of the action.
Repeal of the Health Insurance Claims Assessment, or HICA Tax, "has long been a priority for the Michigan Chamber because the tax makes it more costly and difficult for individuals and employers to purchase health insurance," according to Jim Holcomb who serves as Senior Vice President for Business Advocacy & General Counsel for the Michigan Chamber.
The HICA Tax is a 0.75-percent tax on paid health insurance claims. It is paid by individuals and businesses alike and has added nearly $1-billion to the cost of health insurance since its enactment in 2011. Holcomb says, "We applaud Speaker Cotter and Insurance Committee Chair Tom Leonard for their leadership in making health insurance more affordable."
At the Michigan Manufacturers Association, Delaney McKinley is Director of Human Resource Policy & Membership Development. McKinley says, "This legislation responsibly removes the HICA tax burden on businesses and individuals that purchase health care, increases funding to the School Aid Fund and brings Michigan into compliance with federal Medicaid regulations."
Back at the State Chamber, Wendy Block, who serves as Director of Health Policy & Human Resources, says "The HICA Tax was hurriedly put into place in 2011 because the Use Tax on Medicaid Managed Care Organizations was subject to federal scrutiny and it was thought it would be deemed an impermissible mechanism to draw down federal dollars to help fund Michigan's traditional Medicaid program." She adds, "Five years later, we can safely say the HICA Tax has been a total flop, as it not only has added over $1-billion to the cost of health insurance, but also has proven to be an unstable and inadequate revenue source for the state."
MMA's McKinley notes that "As employers and individuals struggle with the rising cost of health care, it is more important than ever for legislators to do all that they can to help rein in health care costs. This legislation will eliminate the costly and anti-competitive HICA tax, which has added over $1-billion to the cost of health care in Michigan since 2011."
The manufacturers commended Speaker Cotter and Chairman Leonard for their decisive action, pointing out that the bills now return to the Senate for concurrence with changes made in the House.
The Chamber's Holcomb calls the Senate bills a "win-win-win," adding, "The bills are a win for individuals and businesses who will see their health insurance premiums drop and a win for the state budget because it allows Michigan to continue to collect and use MCO Use Tax revenues and use those revenues for the School Aid Fund and other budget priorities. It is also a win for those serving the Medicaid population, because this legislation will ensure there's a stable revenue source for the traditional Medicaid population."
