He says the complicated plan would likely have been rejected by the federal Medicaid office, and that would have resulted in the loss of federal money.
“I am very concerned that the federal government would not recognize this tax structure as an eligible Medicaid matching fund source, putting at risk federal funding for critical state health programs and leaving our state budget out of balance,” Snyder said in a statement released by his office.
Business groups, in particular, have been frustrated with the current tax on health insurance claims. They say it drives up the cost of employee health coverage.
The governor’s spokesman says the issue will be a high priority in 2017.