Senate Commerce Committee Republican Lead Gary Dahms (Redwood Falls) released the following statement on Governor Tim Walz’s proposal to assess a new tax on insurance companies to pay for the highly successful reinsurance program:

“When you look at the big picture on what is being proposed, between this new assessment tax, the doubling of the HMO Medicaid Surcharge, and other proposed mandates on policies, premiums will skyrocket and become even less affordable for every Minnesotan. Today is another reminder that Governor Walz is always looking for more revenue rather than finding efficiencies and savings, and Minnesotans deserve better.”

The Walz proposal would increase the Insurance Premium Tax, currently at 0.6%, by adding an “assessment” to cover the gap between what insurance companies pay and what the federal government provides for the state’s reinsurance plan. Minnesotans already pay a 1.8% tax on healthcare services to subsidize affordable healthcare options, and insurance companies are currently taxed at 8.86%. Unlike other states that use similar tax assessments, Minnesota has many non-profit insurance providers that would be significantly impacted by this additional burden.