Take from insurance tax doubles
The amount of premium taxes collected by the Louisiana Department of Insurance has more than doubled since 2015, according to a report by the state’s legislative auditor.
The Medicaid expansion enacted by Gov. John Bel Edwards in 2016 is the primary cause of the increase, the report says.
About $454 million in premium taxes were collected in fiscal year 2015. During the most recent fiscal year, the department collected $915 million, which was $22 million more than the year before.
The largest increase occurred from fiscal year 2016 to 2017, the auditor’s office says. During that time, premium taxes increased by approximately $314 million for the Medicaid-enrolled managed care organizations due to Medicaid expansion.
Also, the Medicaid tax rate increased from 2.25 percent to 5.5 percent. Other increases are attributable to the general growth in life, accident and health, and fire and casualty premiums, the report says.
The department’s 2017-2018 annual report – the most recent available – breaks down where the money that flows through the department goes. That year, total revenue was a little more than $1 billion, of which almost $893 million came from insurance premium taxes.
Just under $30 million was spent on the department’s operations. Nearly $67 million went to retirement expenses for firefighters and law enforcement, and almost $2.4 million went to municipal fire and police civil service. Almost $5 million paid for insurance fraud assessments by the Department of Public Safety and the Department of Justice.
The vast majority of total revenue – more than $900 million – ended up in the state’s general fund, which is the part of the state budget over which lawmakers have the most control.
The Legislative Auditor did not report any negative findings regarding the department’s financial reporting or its compliance with relevant laws and regulations.