Gov. Snyder signs law extending health insurance tax

Published: Mar. 16, 2016 at 7:12 AM EDT
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Michigan's tax on health insurance will continue under legislation signed by Gov. Rick Snyder.

The bill enacted Tuesday extends the health insurance claims assessment, which helps pay for Medicaid for low-income residents, until July 2020. The tax would have gone away in two years if the legislation were not adopted.

The 0.75 percent tax is expected to rise to 1 percent in 2017 when the federal government no longer allows another tax to fund Medicaid.

Critics such as the Michigan Chamber of Commerce call the bill a tax increase. But the Republican governor has advocated for the measure partly as a way to lessen pressures in the state's general fund when more money is shifted to road construction in coming years.