Just because the reconciliation effort to repeal and replace the Affordable Care Act (ACA) has been eclipsed in Washington—for now—doesn’t mean that consumers all over the country aren’t feeling the pain of the law’s shortcomings. Premiums continue to rise and choices in the individual market continue to dwindle. Fortunately, there are at least two critical actions Congress could take to help stabilize Obamacare’s exchanges.
First, Congress should fully fund cost sharing reduction (CSR) payments, and the administration must continue to provide them. The ACA mandated that insurers reduce out-of-pocket costs for certain low income individuals in exchange for compensation through CSR payments. If the administration ends these payments, insurers will still be required to limit out-of-pocket costs but may have to raise premiums by as much as 20%. Washington is actively talking about preserving these payments. Now it’s time to get this done.
A second priority, which to date has received less attention from policymakers, is extending the suspension of Obamacare’s health insurance tax (HIT). Originally part of Obamacare, the HIT was suspended in 2015 but under current law will be reinstated next year, slamming a $14.3 billion fee on millions of health insurance policies. Individuals, families, seniors, and small businesses will pay the price in higher premiums. According to one study, reimposing the tax would hit families in the small group market, which serves many small businesses, with a $500 increase. Seniors enrolled in Medicare Advantage would also see $245 more in costs. But if the HIT is repealed, it will save individuals and families up to $6,675 over the next 10 years.
The U.S. Chamber of Commerce is working to build public awareness of the looming HIT, and we urge all lawmakers to stop it in its tracks. I doubt that many lawmakers will want to explain why they allowed a tax on health insurance to take effect. While we ramp up pressure on both the HIT and CSR payments, we will continue pressing for action on other health care priorities—namely, the medical device tax and the so-called Cadillac tax on premium insurance plans.
Businesses across the country are wondering what will happen next with health care. Congress and the White House must do all they can in the short term to ensure that our existing health care system is as stable as possible. But soon our leaders will have no choice but to offer a new vision for American health care—and the Chamber will be ready to help when the time comes.