Fill me in: The Affordable Care Act created a new tax on health insurance commonly known as the Health Insurance Tax, or HIT, which would hit families, seniors, and small businesses particularly hard in the form of significantly higher premiums. Although the tax is in effect now for 2018, Congress earlier this year passed legislation to suspend the HIT for 2019. However, the tax will resume after this one year suspension in 2020 unless additional action is taken. The House earlier this summer approved legislation that would stop the HIT for 2020 and 2021.
Why does it matter? More than 142 million Americans – including individuals purchasing their own coverage as well as small business owners, employees, families, and seniors – will face a $20.3 billion tax hike starting in January 2020 if nothing is done, according to an analysis by Oliver Wyman.
Number to know: $479. Due to the HIT, that’s how much health insurance premiums stand to increase next year for the average family purchasing insurance in the small group market, according to the Oliver Wyman estimates. For families in the large group market, the toll would be $458 next year, while Americans purchasing insurance through the individual market would see premiums increase by nearly $200.
Over the next decade, the HIT would result in premium increases ranging from $2,473 per person in the individual market to $5,824 per family in the small group market.
Our take: “Health insurance premiums have gone up enough. Our nation’s small businesses, seniors, and families are counting on their representatives in Washington to keep their premiums from going even higher. If they don’t, American businesses, the U.S. economy, and families like yours will pay the price. It is time to eliminate the HIT Tax.” – Katie Mahoney, U.S. Chamber Vice President, Health Policy (read the full post here)
What’s next? The House and Senate must act to eliminate or further suspend the health insurance tax as soon as possible. Several different bills have been introduced, and some legislation has been passed by the House that take different approaches: S.3065 – the Health Insurance Tax Relief Act of 2018 – introduced by Sen. John Barrasso (R-WY) in June, repeals the tax outright; H.R. 6311 passed by the House in July would further suspend the HIT until 2022. However, to provide relief to families, seniors, small businesses, and individuals, the HIT must be repealed, and in the short-term, an additional delay must be enacted by the end of the year.
Related: Messages from Main Street on the Health Insurance Tax