Thursday, June 4, 2009
Michigan Report
Volume #48, Report #107, Article #3
A Senate Fiscal Agency analysis of the health care insurance package introduced by Senate Republicans has been distributed by businesses worried the package could boost overall state taxes by as much $600 million to $700 million.
The analysis comes out as the Senate Health Policy Committee is planning to begin hearings on the package on Wednesday. Committee Chair Sen. Tom George (R-Kalamazoo) also said he hoped to report the package to the full Senate in a few weeks.
The analysis of SB 579, SB 580, SB 581 and SB 582 also says that the revenue, if the state can get a waiver on Medicaid eligibility from the federal government, could generate as much as $1 billion in additional federal funds.
But a memo distributed to members of Consumers for Fair and Affordable Insurance Reform (created a year ago when debate was underway over enacting reforms to the state's individual insurance market) said the SFA analysis also said that the program would not "necessarily fix Michigan's health care problems. Despite the tax increase and expansion of health insurance coverage, independent SFA analysts say insurance premiums aren't likely to drop significantly, a key argument of advocates of this approach."
The analysis says that advocates for the package argue an expansion in health care coverage "would result in a reduction in uncompensated care and thus could potentially reduce the cost of private health insurance."
The CFAIR memo follows memos distributed earlier by the Detroit Regional Chamber worrying about the potential tax costs of the package.
The package, creating the MI-Health program that would cover most the uninsured persons in Michigan by providing coverage for those with incomes of as much as 200 percent of the federal poverty level, creates a 1.8 percent surcharge on health insurers for all health insurance companies as well as a surcharge on those plans that offer MI-Health services. In addition, SB 581 would require Blue Cross Blue Shield of Michigan to make a payment equivalent to what it would pay under the Michigan Business Tax, about $120 million. And SB 582 would increase the current hospital quality assurance assessment rate to the current maximum allowed by the federal government, raising about $180 million.
John Truscott, spokesperson for CFAIR, said with the current economy, this was not the time to raise taxes on companies.
But Mr. George said failing to do so means more people will go without health insurance - studies indicate about 1.2 million people do not have health insurance and the package could cover as many as 700,000 of them - which will increase the indirect costs that business and individuals pay to make up for uncompensated care for those without coverage.
"What's their proposal if they're so smart," Mr. George said.
Mr. Truscott said the group thinks that between the package unveiled by Senate Republicans and a second unveiled by House Democrats there is room for a compromise proposal on health care coverage.
Mr. George, meanwhile, said the committee would begin hearings on the package on Wednesday, June 10. A second hearing will be held at Wayne State University on Monday, June 15, with a third meeting planned for Wednesday, June 17.