(Quin Hillyer, Liberty Headlines) Even if Congress can’t repeal and replace Obamacare, policy specialists are insisting Congress can and should find a way to ward off one particular Obamacare tax that otherwise will take effect on Jan. 1, 2018.
Unless Congress acts, Obamacare’s rules will apply a “Health Insurance Tax” (HIT) of between 4 and 6 percent on every health plan, other than self-insurance, sold in America. Critics have urged Congress for months to use various legislative vehicles to repeal or at least delay the tax, but so far Congress has not been able to make a repeal or delay fit in to any one bill.
The HIT was originally slated to take effect several years ago, but Congress delayed it several times, most recently in a government-funding bill President Barack Obama signed in 2015.
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Grover Norquist of Americans for Tax Reform wrote that “Next year alone, the health insurance tax will total $12.3 billion, according to the Congressional Budget Office. Over the next decade it will result in nearly $145 billion in higher taxes.”
Norquist further wrote: “Any [of HIT’s] costs are passed directly to small businesses that provide healthcare to their employees, and middle class families through higher premiums. The tax even impacts the care received by seniors through Medicare advantage coverage and low-income Americans that rely on Medicaid managed care. According to the American Action Forum, the tax is responsible for premiums increasing by as much as $5,000 over a decade and half of the tax will be paid by those earning less than $50,000 a year.”
Even if insurance companies don’t pass the entire tax directly through to consumers, a group of companies led by United Health publicized a study showing HIT alone would force premium hikes next year of 2.6 percent. And that’s on top of other factors causing huge premium increases in an Obamacare market struggling to stay afloat.
According to the respected, ideologically neutral Kaiser Family Foundation, the average number of insurers offering plans in each state already has fallen from 6.7 in 2015 to 5.1 in 2017 – and that number is expected to fall further to 4.6 next year. The HIT will add to those pressures chasing companies out of, and thus destabilizing, the health-care market – leaving even fewer choices for consumers.
Furthermore, the National Federation of Independent Business released estimates that the tax could cause a loss of some 286,000 jobs by 2023.
Speaker of the House Paul Ryan has met with groups opposed to the HIT, and agreed it is “a bad tax.”
Various complicated rules for the federal budget and for how Congress handles the budget have made it difficult to eliminate the tax without identifying “savings” to offset the “cost” to government of losing the revenues produced by the HIT. The HIT would be one of the many taxes eliminated by every major version of both the House and Senate bills to replace Obamacare this year, but of course that effort, for now, has died in the Senate.
And for tactical reasons, House leaders do not want to repeal Obamacare taxes piecemeal – partly because doing so would take away a lot of impetus for replacing Obamacare as a whole, because one of the few, universally popular portions of the “repeal and replace” effort is the lure of cutting taxes as part of the legislation.
A few other legislative vehicles for eliminating the HIT do remain this year, but time is running out.Click here for reuse options!
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