Iowa’s insurance industry is opposing a proposed tax increase on HMOs to cover a deficit in the state’s Medicaid program. The bill would raise the tax on health insurance premiums from just under 1% to 3.5%, resulting in a 238% tax hike. Industry lobbyists argue that the increase would significantly impact affordability for customers, with one company expecting its tax bill to jump from $11.5 million to $61 million. State officials say the tax increase is temporary and would be repealed in the fall, with a deadline of March 31 to qualify for additional federal funding. Republican senators are working to find ways to lessen the impact of the tax hike.
