Senator Jesse Green. Photo courtesy of Iowa Legislature

A change in federal regulations for Medicaid is creating a bill in the Iowa Legislature to handle a shortfall in funding. 

District 24 Senator Jesse Green says because Medicaid is partially funded by the federal and state governments, there is going to be a $170 million shortfall in Medicaid. He tells Raccoon Valley Radio that many states utilize a health insurance provider tax, of which the Big Beautiful Bill requires all states to align to 3.5 percent of that rate, and Iowa is currently less than one percent. He talks about how Senate File 2464 would operate, if it is passed by the House and Senate and signed by Governor Kim Reynolds into law.

“The state proposal that would temporarily increase the insurance provider tax for about nine months in fiscal year 2026. And this would generate additional revenue for our Medicaid program. And then after that nine months, the tax would then drop back to Iowa’s lower rate.” 

Senator Green points out that the Senate Appropriations Committee, which he serves on, approved the bill last week and it will need to pass through the other taxing committee he serves on, the Senate Ways and Means Committee. He adds that the bill, if it becomes law, would be implemented later this year.