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House passes bill to raise short-term HMO tax to draw federal Medicaid matching funds
Summary
The Iowa House approved House File 2739 to raise a temporary tax on health maintenance organizations to draw federal Medicaid matching funds; the final vote was 53-39 and the bill was messaged to the Senate.
The Iowa House on final passage approved House File 2739, a measure that replaces the existing HMO premium tax with a new, temporary health-care-related tax designed to draw federal Medicaid matching dollars. Representative Lundgren, the bill manager, told colleagues the change is aimed at complying with federal managed-care rules so the state can “draw down federal funds” for Medicaid.
Supporters framed the bill as a short, targeted change to shore up Medicaid financing. Lundgren said the nine-month increase is intended to return the tax to its prior rate after the state secures federal match: “What were doing is raising the tax for a short period of time in order to draw down federal funds for the state of Iowa that other states are already collecting.” Opposition members warned the tax could raise premiums or reduce coverage; multiple amendments seeking to block or modify the tax failed during floor debate. The roll call on final passage recorded 53 ayes, 39 no, and 8 absent or not voting; the clerk certified that the bill received a constitutional majority and the measure was ordered messaged to the Senate.
