The Iowa House has passed a bill to temporarily raise the premium tax on private companies that offer HMOs to Iowans, as well as the three companies that manage Iowa’s Medicaid program.
The nine-month measure would generate $124 million in federal matching funds for the state to help cover a Medicaid deficit.
Republican Rep. Shannon Lundgren of Peosta says the move is responsible budgeting and notes similar steps are being taken in other states.
Democratic Rep. Austin Baeth of Des Moines says when property taxes increase, landlords raise rent and businesses pass higher costs on to consumers. He argues this tax increase will ultimately impact Iowans who purchase insurance.
Lundgren says it will be a business decision whether companies like Wellmark pass the tax increase on to consumers, noting the insurer ended 2025 with more than a $3 billion surplus.
