Extension to the Health Insurance Claims Assessment Passes

Liz Gullett

Dec 11, 2015

On Tuesday, the House passed an extension to the sunset on the Health Insurance Claims Assessment (HICA), a tax levied on health and medical services claims paid by health insurers, health maintenance organizations, other categories of insurance carriers, and third party administrators. The state uses revenue from HICA as a portion of the state’s match dollars for the federal Medicaid program. For every $1 the state puts into the program, they receive $1.91 in federal funds. Under current law, HICA would sunset on December 31, 2017, but the bill would extend that to September 30, 2025. The following day, the Senate Appropriations acted quickly to report the bill from committee. It has been sent to the Senate floor for further consideration. “Even if the extension to HICA is approved, the state will face a budgetary deficit for Medicaid funding in the coming years. HICA has not generated the revenue that was estimated, plus the federal government has placed an end date on state’s using Medicaid managed care taxes to draw federal match dollars, something Michigan has relied upon. The legislature and administration will be working to find a long-term solution in the coming years to fully fund the state’s Medicaid program,” explained Sean Mann of MLC.

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