The paid claims would be an obligation on insured and self-insured entities. Details regarding this budget proposal, including operational issues and effective date, are unclear at this time. But the Michigan budget is predicated on the implementation of this provision. If it fails, then the remaining options will be reductions in Medicaid, largely in provider rates and health plan premiums.
In short if we tax the insurance companies for paying claims, premiums will have to increase to the insured to compensate the additional tax. Individuals should contact their elected representatives and voice their opinion. Insurance rates are already becoming unaffordable to individuals and businesses as it is. This is only a proposal at this stage, but unless action is taken this could become a progressive tax and one in which the public at large is unaware of.
