Monday, November 28, 2011

In January Michigan Will Start Taxing Me On Insurance Premiums to Save Blue Cross Some Money

And yet another tax on the middle class.

We recently got a letter from Blue Cross Blue Shield of Michigan about the Michigan Health Insurance Claims Assessment Act that will go into effect one month from now on January 1, 2012.

Snyder, a Republican, worked with state lawmakers on the measures and agreed to them as part of the effort to balance the state’s budget overall. In addition to the new tax, the state ended a 6% use tax on Medicaid managed care organizations. The blanket 1% tax on all payments is expected to cover some of the losses from eliminating the use tax.

So a 6% Use Tax on Medicaid Managed Care organizations was scrapped and replaced with a tax on insurance claims and premiums "The new rules will impose a 1% tax on all health care claims paid in the state and use that money to provide health care for low-income residents."

As I understand it, many of the managed care organizations are subsidiaries of insurance companies -- so Michigan effectively removed a tax on insurance companies who get money from Medicaid, and replaced it with a tax on insurance claims and premiums for self insured folks like myself.

I have no problem paying a little more if I know it's going to help folks less fortunate. What gets me is when my taxes are raised so that massive companies awash in cash can have a tax cut.

Michigan's legislature and governor simply shifted the tax burden from large corporations to the average Joe in order to maintain the same level of Medicaid funding we had before.

Our lawmakers were hell bent on removing the 6% use tax primarily on insurance companies and in order to keep Michigan eligible for 780 million dollars in Federal funding for Medicaid, they shifted that cost to everybody else.

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