A new tax on health insurers' premium revenue under the federal health reform law has drawn concern from many state Medicaid directors, Kaiser Health News/McClatchy reports.
About the Tax
The overhaul requires insurers -- including Medicaid managed care plans, which contract with states to run their Medicaid programs -- to pay the fee
As a result, any additional cost to such managed care plans will be passed on to Medicaid programs, which are funded by state and federal governments.
According to a Milliman report released Tuesday, the tax will cost Medicaid programs between $36.5 billion and $41.9 billion over a decade, at least $13 billion of which will be paid by states.
Concerns From State Medicaid Directors
Matt Salo, executive director of the National Association of Medicaid Directors, predicted that states will struggle to find ways to cover the extra cost while also seeking ways to scale back Medicaid spending.
Tennessee Medicaid Director Darin Gordon said he has brought the issue to the attention of CMS officials and hopes the administration will exempt Medicaid managed care plans from the tax (Galewitz, Kaiser Health News/McClatchy, 2/1).