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Lawmakers spar over whether HMO tax will raise premiums or protect Medicaid
Summary
Floor debate featured repeated warnings that the temporary HMO tax could be passed to consumers or lead insurers to withdraw coverage, while proponents said the tax draws federal matching funds and protects Medicaid services for vulnerable Iowans.
Floor debate on House File 2739 centered on whether a short, temporary increase to the HMO tax would be passed through to consumers or would serve to stabilize Medicaid coverage by securing federal match. Opponents cited a letter attributed to Wellmark saying insurers could withdraw and that up to about 1,600,000 Iowans might lose coverage; Representative Lundgren and other supporters said the primary goal is to draw down federal funds that states are otherwise leaving on the table.
The session included multiple emotional appeals about access to care and affordability. Representative Bathe and Representative Turek recounted clinical and rural care impacts if premiums rise or reimbursements fall, while Representative Lundgren noted that cutting insurers' taxes in the past preceded premium increases. The House voted on the package as amended and passed HF 2739.
