LITTLE ROCK — The 2.5 percent premium tax collected on each insurance plan sold through the private option would go into a trust fund under an amendment endorsed by Joint Budget Committee Tuesday.
Money collected in the Health Care Independence Trust Fund, established in 2013 by the Legislature, would be used to help offset the state’s share of the private option cost, Sen. Johnny Key, R-Mountain Home, said during the meeting.
The federal government is now paying all the cost for the next two years, after which the state’s share will increase gradually to 10 percent.
Without the amendment, Key said, the premium tax revenue would go directly into state general revenues.
The amendment was on HB 1073, the Insurance Department operations budget.
State Insurance Commissioner Jay Bradford estimated that somewhere between $23 million and $50 million could be collected and placed into the trust fund, depending on how many people enroll in the private option.
The committee also voted to amend the state Securities Department’s budget to require quarterly reports on funds received through settlement agreements. Rep. Andrea Lea, R-Russellville, successfully got a similar amendment added to the state attorney general’s budget two years ago.
State Securities Director Heath Abshure said the department had no objection to the amendment.
The Securities Department has been under fire from the legislative joint Performance Review Committee for making informal deals in securities disputes.