Unless Congress acts, health insurance costs set to increase even more in 2018
Colorado Sen. Cory Gardner took to the floor of the U.S. Senate October 25 to push for immediate passage of his legislation that would delay, once more, the Health Insurance Tax (HIT) from taking effect.
“As is the case with most excise taxes, if this tax takes effect, costs will be passed to consumers in the form of higher premiums as confirmed by the Congressional Budget Office,” said Gardner in a news release.
“One of the cost drivers built into the ACA [Affordable Care Act-Obamacare], this tax was set to begin in 2014 starting at $8 billion and reach $14.3 billion by 2018; however, Congress suspended the tax from taking effect in 2017.
“Without congressional action, this tax will take effect in 2018.”
In addition to the Congressional Budget Office, Gardner cited reports and studies conducted by the Federal Reserve Board, the U.S. Dept. of Health and Human Services, and NFIB to make his case.
“A study by the National Federation of Independent Businesses found that allowing the HIT to take effect could result in a reduction of as many as 286,000 jobs by 2023,” said Gardner.
NFIB’s study, Effects of the PPACA Health Insurance Premium Tax on Small Business and Their Employees, was conducted by economist Michael J. Chow of NFIB’s Research Center.
“The 2010 healthcare law contains a tax on the health insurance policies that most small businesses purchase,” wrote Chow. “Although the tax is formally structured as a fee on health insurers, analysis has determined that virtually all of the tax burden will be passed on to the purchasers of insurance: employers and employees. Estimates predict the tax will raise the cost of employer-sponsored insurance by 2% – 3%, imposing a cumulative cost of nearly $5,000 per family by 2020. The NFIB Research Foundation’s BSIM model suggests that such price increases will reduce private sector employment by 152,000 to 286,000 jobs in 2023, with approximately 57 percent of those losses falling on small business.”
Senator Gardner’s speech can be heard below. NFIB is mentioned at 6:17 into the 7:16-minute video.