{"id":650391,"date":"2026-03-12T13:52:18","date_gmt":"2026-03-12T13:52:18","guid":{"rendered":"https:\/\/www.europesays.com\/us\/650391\/"},"modified":"2026-03-12T13:52:18","modified_gmt":"2026-03-12T13:52:18","slug":"iowa-senate-committee-approves-one-time-tax-increase-on-certain-health-insurance-plans","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/650391\/","title":{"rendered":"Iowa Senate committee approves one-time tax increase on certain health insurance plans"},"content":{"rendered":"

DES MOINES, Iowa (IOWA CAPITAL DISPATCH<\/a>) – The Iowa Senate Ways and Means Committee advanced a measure Wednesday that would impose a one-time tax increase of $173 million on health maintenance organizations (HMOs) in order to address budget shortfalls in Iowa Medicaid.<\/p>\n

Senate File 2464<\/a>, approved 10-6 by the committee, would increase the taxes on HMOs, a type of Medicaid Advantage plan offered by private companies for health care through a specified network, from the current rate of 0.925% of premiums to 3.5% between Jan. 1 and Sept. 30 this year. On Oct. 1, the tax would decrease to 0.95%.<\/p>\n

In addition to the tax increase, which lawmakers estimated would provide the state $173 million in one-time funds and $61 million in the years following, the bill also would route $70.3 million from the state General Fund to the Iowa Department of Health and Human Services for the state\u2019s Medicaid program.<\/p>\n

Sen. Jesse Green, R-Harcourt, said the bill \u201cprovides a solution to a challenge.\u201d<\/p>\n

\u201cThe challenge is based on the December Medicaid forecast,\u201d Green said. \u201cIowa Medicaid need is nearly $200 million without considering cost containment measures for fiscal year \u201927.\u201d<\/p>\n

Green said the\u00a0\u201cOne Big Beautiful Bill\u201d Act<\/a>\u00a0approved by President Donald Trump and Republicans in Congress caps premium tax rates at 3.5%, a threshold Iowa is \u201cwell under\u201d due to the Centers for Medicare and Medicaid Services\u2019 requirements on premium taxes. But CMS, in discussions with Iowa HHS, \u201chas provided the opportunity to review the state\u2019s request to temporarily increase the premium tax,\u201d he said.<\/p>\n

Under the measure, 85% of the increased taxes would be paid by\u00a0Managed Care Organizations, or MCOs,<\/a>\u00a0the private entities overseeing much of the state\u2019s Medicaid coverage \u2014 Amerigroup Iowa, Inc., Iowa Total Care and Molina Healthcare of Iowa \u2014 and 15% by other HMO plans.<\/p>\n

But private health insurance providers have rallied against the proposal, saying the measure would result in major increases in health care costs. Matt McKinney with the Federation of Iowa Insurers said the proposal would result in a 238% tax hike for health insurance costs. Advocates representing private insurance companies like Wellmark Blue Cross and Blue Shield said the measure would retroactively increase taxes from $11.5 million to $61.7 million in the current year for Iowans covered through the Wellmark Health Plan of Iowa.<\/p>\n

Democrats said the measure will result in higher health care costs for Iowans, as these insurance companies shift those costs onto Iowans. Sen. Janet Petersen, D-Des Moines, said she opposed the bill in the subcommittee and committee meetings because it would result in a tax increase for Iowans who receive health insurance through the Affordable Care Act and those who receive private health insurance through the small individual market, for small businesses and other entities.<\/p>\n

\u201cI don\u2019t believe that we should be taxing Iowans on their health insurance,\u201d Petersen said. \u201cIt\u2019s already outrageously expensive. And asking them\u00a0to\u00a0do so to help bail out the MCOs just, simply, I think is wrong.\u201d<\/p>\n

There are other changes included in the measure aimed at allowing lawmakers to address budget shortfalls. The bill would transfer $296.2 million from the Iowa Taxpayer Relief Fund to make up for funds lost through tax cuts included in the tax and spending bill signed into law by President Donald Trump in July 2025. It would also remove the current 50% limit on how much money can be taken from the Taxpayer Relief Fund to address the difference between state appropriations and revenues.<\/p>\n

The measure would remove the cap entirely in the current fiscal year, then move to a 75% cap in fiscal year 2027, and then return to the 50% cap in FY 2028.<\/p>\n

Petersen said the impact of the tax and spending bill approved by Republicans in Congress, including Iowa\u2019s federal delegation, \u201cis actually gonna be growing.\u201d She said she had \u201cconcerns\u201d about making up for the budget shortfalls by \u201cfront-loading\u201d costs through the Taxpayer Relief Fund.<\/p>\n

Green responded that the Taxpayer Relief Fund transfer is needed because \u201csome of the changes with the Big, Beautiful Bill (weren\u2019t) realized at the time,\u201d and change is needed \u201cin order to make sure that Iowans benefit from those changes\u201d in the federal law.<\/p>\n

\u201cI think this is a tool in the toolbox to help fill that gap in Medicaid,\u201d he said.<\/p>\n

The House advanced a companion bill,\u00a0House Study Bill 762<\/a>, through a subcommittee Thursday.<\/p>\n

Copyright 2026 IOWA CAPITAL DISPATCH. All rights reserved.<\/p>\n","protected":false},"excerpt":{"rendered":"DES MOINES, Iowa (IOWA CAPITAL DISPATCH) – The Iowa Senate Ways and Means Committee advanced a measure Wednesday…\n","protected":false},"author":3,"featured_media":650392,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[35],"tags":[154018,17281,276194,102314,9223,210,1141,211049,3168,165978,276196,1142,276197,6478,276193,7337,7776,42458,276195,219972,41240,16854,116239,67,132,68],"class_list":["post-650391","post","type-post","status-publish","format-standard","has-post-thumbnail","category-health-care","tag-approves","tag-bill","tag-certain","tag-committee","tag-doctor","tag-health","tag-health-care","tag-health-care-bill","tag-health-insurance","tag-health-insurance-plan","tag-health-maintenance-organizations","tag-healthcare","tag-hmo","tag-hospital","tag-increase-taxes","tag-insurance","tag-iowa","tag-iowa-medicaid","tag-iowa-senate","tag-one-time-tax","tag-plans","tag-senate","tag-tax-increase","tag-united-states","tag-unitedstates","tag-us"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116216538715059124","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/650391","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=650391"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/650391\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/650392"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=650391"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=650391"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=650391"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}