Higher health taxes coming in new year

ST. PAUL -- The cost of health care in Minnesota will rise a bit higher Jan. 1 because of increases in two state taxes on medical services and health insurance.

The expense of visiting a doctor, spending a night in the hospital, buying a new pair of eyeglasses or getting a cavity filled by a dentist will increase because a current 1.5 percent health tax is scheduled to increase to 2 percent.

Almost everybody will pay the tax, either directly or indirectly.

The second tax, which covers about one-third of all Minnesota individuals and families who pay for their health insurance themselves or work for companies too small to have self-insurance funds, is not currently being levied.

After Jan. 1, the insurance tax, known as a gross-premium tax, will go into effect at 1 percent.


The two tax increases are coming on top of an overall increase in health-care costs that state planners expect to be about 10 percent a year in the next three years.

Although most Minnesotans will pay one or both taxes, few people who have insurance are likely to notice the increases. That's because the tax changes have been anticipated and built into premium increases already passed on by insurers to individuals and employers.

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