The health reform law imposed a new sales tax on health insurance that increases the cost of health care coverage. The amount of the tax was $8 billion in 2014 and increase by 41 percent for 2015. The tax will total more than $145 billion over the next ten years.
Bipartisan Legislation to Repeal the Health Insurance Tax & #Driveto218
Repealing the health insurance tax is an important step policymakers can take to make health insurance premiums more affordable and would provide immediate financial relief to those impacted by the tax.
AHIP supports legislation in the House and Senate to fully repeal the health insurance tax. Bipartisan legislation in the House, introduced by Rep. Charles Boustany (R-LA) and Kyrsten Sinema (D-AZ), has achieved support from a majority of representatives (218). In the Senate, the Jobs and Premium Protection Act, introduced by Sen. Orrin Hatch (UT) and Sen. John Barrasso, would fully repeal the health insurance tax.
In order to raise awareness about the importance of garnering support for this legislation, join the conversation on Twitter using the hashtag #repealtheHIT.
Impact of the Health Insurance Tax
According to an analysis by the actuarial firm Oliver Wyman, the total impact of the tax will mean that an individual purchasing coverage on his or her own for 2015 will pay $170 in higher premiums and small businesses will pay an additional $530 for each family they cover. The Congressional Budget Office (CBO) has said that this tax will be “largely passed through to consumers in the form of higher premiums.”
The Oliver Wyman analysis also estimates the effect of the new tax on insurance market segments and public programs:
- The health reform law includes a $145 billion tax on health insurance. The tax started at $8 billion in 2014, increased by 40 percent in 2015, and will nearly double over the course of four years to $14.3 billion in 2018. The tax will continue to increase based on premium trend each year.
- According to an analysis by Oliver Wyman, repeal of the health insurance tax will save consumers on average:
- $514 per year (individual), $688 per year (small group), and $719 per year (large group) for family coverage;
- $360 per year for each senior with Medicare Advantage; and
- $152 per year for each Medicaid enrollee.
An updated report by Oliver Wyman, “Annual Tax on Insurers Allocated by State,” estimates the impact this tax will have on individual market consumers, employers, and Medicare Advantage beneficiaries in all 50 states, as well as the impact on state Medicaid managed care programs. AHIP has also developed infographics showing the state-by-state impact of the tax.
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This tax will add a financial burden on families and small businesses at a time when they can least afford it, and it should be repealed. The health insurance tax will also be assessed on dental coverage which will increase the cost of this important coverage. AHIP has launched Time for Affordability to raise awareness of how the health insurance tax and other provisions will affect premiums.
Beginning in 2014, the Affordable Care Act (ACA) imposed a tax that will exceed $145 billion over the next 10 years on families, small businesses, seniors, states, and taxpayers in the form of what is essentially a new sales tax on health insurance coverage.
Health insurance tax interactive map of co-sponsors for delay and repeal legislation.
A new "listicle" of media coverage from communities across the country showcases the far-reaching concern about the HIT's impact on affordability.
This document reviews current research outlining the key drivers of health care costs and advances a new policy framework for bending the cost curve and improving the quality of patient care.
America’s Health Insurance Plans’ (AHIP) President and CEO Karen Ignagni released the following statement in support of bipartisan legislation, The Small Business and Family Relief Act, introduced today by Representatives Ami Bera (D-CA) and Charles Boustany (R-LA) that would delay the ACA’s health insurance tax for two years.
Bipartisan legislation to repeal the Affordable Care Act’s (ACA) health insurance tax has reached 218 co-sponsors, a majority of the U.S. House of Representatives.
A new report from Milliman, Inc. helps explain how the Affordable Care Act’s (ACA) coverage expansion, new benefits, and market reforms will impact individual market health insurance premiums in 2014. The report highlights how some provisions will increase premiums while others will make health care coverage more affordable for consumers. The focus of this report is to highlight the broad range of changes happening in the marketplace and the wide variation in impact that is likely to occur.
America’s Health Insurance Plans’ (AHIP) President and CEO Karen Ignagni released the following statement in support of the Jobs and Premium Protection Act introduced today by Senators John Barrasso (WY) and Orrin Hatch (UT) to repeal the Affordable Care Act’s (ACA) health insurance tax.
The Internal Revenue Service (IRS) at the U.S. Department of Treasurytoday issued a proposed rule on the $100 billion health insurance tax included in the Affordable Care Act (ACA). The health insurance tax will increase costs for consumers and employers in all 50 states, according to a recent analysis by Oliver Wyman
America’s Health Insurance Plans’ (AHIP) President and CEO Karen Ignagni released the following statement in support of bipartisan legislation co-sponsored by Representatives Charles Boustany (R-LA) and Jim Matheson (D-UT) to repeal the Affordable Care Act’s (ACA) health insurance tax.
The new health insurance tax included in the Affordable Care Act (ACA) will increase the cost of health care coverage for consumers and employers in every state, according to a new state-by-state analysis conducted by Oliver Wyman for America’s Health Insurance Plans (AHIP).
In this report we have quantified the total premiums by state that will be assessed and estimated per member per year costs of this assessment by line of business.
The Joint Committee on Taxation projects that the new premium tax contained in the health reform law will total $101.7 billion between 2013 and 2022.
The National Federation of Independent Business Research Foundation released a study examining the private-sector job loss that will result from the health insurance premium tax.
A technical analysis by Oliver Wyman estimates that the new health insurance tax in the Affordable Care Act (ACA) “will increase premiums in the insured market on average by 1.9% to 2.3% in 2014,” and by 2023 “will increase premiums 2.8% to 3.7%.” AHIP commissioned this report as part of its ongoing effort to raise awareness about the impact the tax will have on consumers, employers and public program beneficiaries.
The Marwood Group prepared this study on the impact of the health insurance premium tax on state Medicaid programs.
The Affordable Act imposes a fee on health insurers that amounts to a de facto “health insurance premium tax” that will raise the cost of health insurance for American families and small employers. Specifically, under the law, an annual fee applies to any U.S. health insurance provider, with the intent of raising nearly $90 billion over the budget window.
Former Director of CBO Doug Holtz-Eakin testified before a House Ways & Means Committee hearing that the tax increase on health insurance premiums will be passed on to consumers with American families paying as much as $135 billion in higher premiums over the next 10 years.