Louisiana House Bill HB35

Louisiana 2016 2nd Special Session

• Introduced: 6/5/16
• Refer: 6/5/16
• Refer: 6/6/16
• Report Pass: 6/7/16
• Engrossed: 6/13/16
• Refer: 6/14/16
• Report Pass: 6/15/16
• Enrolled: 6/17/16
• Chaptered: 6/22/16
• Passed: 6/22/16

Caption

Establishes the annual tax on health maintenance organizations (Item #5) (EN +$168,300,000 SD RV See Note)

Impact

The legislation is anticipated to generate significant revenue for the state, particularly aimed at supporting the Louisiana Medical Assistance Trust Fund. By instituting a predictable tax amount based on receipts, it provides a new revenue stream directly tied to the healthcare market, which could enhance funding for Medicaid and other health-related programs. The estimated additional revenue resulting from this bill is projected to be around $168.3 million, reflecting a significant impact on the state's financial landscape.

Summary

House Bill 35 aims to amend the existing tax framework for health maintenance organizations (HMOs) in Louisiana by establishing a new structure for annual taxation based on gross premium receipts. Specifically, it sets a minimum tax rate of $550 for every $10,000 of premiums collected, which is a substantive change from prior law that does not apply a similar tax rate structure to HMOs. This bill replaces previous tax provisions, creating a more standardized approach to the taxation of health insurance organizations, including Medicaid-enrolled managed care organizations.

Sentiment

The sentiment surrounding HB 35 appears largely supportive, particularly from policymakers and groups focused on health care finance. The proponents have highlighted the necessity for a consistent and applicable tax structure that aligns with the evolving healthcare economy. However, there are underlying concerns from various stakeholders about the potential implications of increased taxes on HMOs, which may influence premium rates for consumers in the healthcare market.

Contention

While the passage of HB 35 has garnered wide support, there is some contention regarding the appropriateness of the new tax structure and its long-term effects on the healthcare system in Louisiana. Critics argue that the increased tax burden on HMOs could lead to higher health insurance premiums for consumers, ultimately making healthcare less accessible. Opponents express concerns about the impact on smaller health organizations, which may struggle to absorb the costs associated with the new tax regime. The bill's potential to reshape healthcare funding in the state is an ongoing topic of discussion among legislators and healthcare advocates.