On Thursday, February 27, Governor Tim Walz announced a proposal to increase the Insurance Premium Tax, currently set at 0.6%, by adding an “assessment” to cover the funding gap between what insurance companies pay and what the federal government provides for Minnesota’s reinsurance program. 

Senate Commerce Committee Republican Lead Senator Gary Dahms (R – Redwood Falls) is warning that this new tax, along with other proposed healthcare cost increases, will drive up premiums and make healthcare less affordable for Minnesotans. “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,” Senator Dahms said. “This is another reminder that Governor Walz is always looking for more revenue rather than finding efficiencies and savings, and Minnesotans deserve better.” 

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. 

“Rather than increasing taxes, the state should focus on fiscally responsible solutions that ensure affordable healthcare for all Minnesotans. We must find ways to lower costs without placing additional strain on consumers and businesses,” concluded Senator Dahms.