Taxes on health insurance could increase premiums by as much as $44 million in the individual market and 52 million in the small group market in Michigan in 2018. According to a recently released study.
For more than seven years, NFIB has been fighting to “Stop the HIT” or the Health Insurance Tax. The Health Insurance Tax (HIT), is a part of the Patient Protection and Affordable Care Act (PPACA) or “Obamacare” signed into law in 2010.
The tax went into effect in 2014 costing insurers $8 billion in taxes and increased to $11.3 billion for 2015-2016. In December 2015, Congress passed a one-year suspension of the tax, eliminating the tax for 2017. However, With the moratorium set to expire for 2018, insurers are setting rates that anticipate $14.3 billion in additional taxes.
The HIT is levied on health insurance companies who operate in the fully insured marketplace, and the extra cost of the tax is passed on to small-business because 87 percent of small businesses purchase health insurance in that marketplace. The HIT is one of the largest tax increases included in Obamacare and falls solely on small business since most large businesses can use alternative arrangements such as self-insurance.
A recent analysis by Oliver Wyman Actuarial Consulting has indicated that the projected impact of the HIT on health insurer premiums in Michigan could result in an average increase of $159 per person in the individual market and up to $519 per family in the small group market in 2018. For Michigan, this means a total premium increase of $44 million in the individual market and 52 million in the small group market. Unless Obamacare is repealed, or the tax ended, premium increases in Michigan will range from $2,284 per person in the individual market to $6,413 per family in the small group market over the next 10 years.
NFIB is pushing to pass S 1859 in the U.S. Senate that would stop HIT from taking effect in 2018 and we will continue the fight to end this unfair tax on small businesses that are already struggling with the out of control health insurance costs brought on by Obamacare.