Provider tax repealed; new tax to be imposed on MCOs

House Bill 2405, introduced January 15, repeals the onerous provider tax that was imposed on health care providers several years ago to generate revenues for Medicaid.

The proposed legislation calls for imposition of tax on managed care organization and health maintenance organizations.

The tax imposed shall be based on the following rates applied to each taxable health plan’s total Medicaid member months: $59.00 for each Medicaid member month under 250,000; $49.00 for each Medicaid member month between 250,000 and 500,00; and $37.00 for each Medicaid member month greater than 500,000.