Late last Friday, Representatives Charles Boustany (R-LA-3), Kyrsten Sinema (D-AZ-9), Kristi Noem (R-SD-At-large) and Ami Bera (D-CA-7) sent a letter to House Speaker Paul Ryan and House Minority Leader Nancy Pelosi urging them to include another one-year delay of the Health Insurance Tax, or “HIT,” in any end-of-year legislative deal. Their letter followed a letter sent last Thursday by the Stop the HIT coalition, of which NAHU signed onto, which also requested that the tax again be delayed in any end-of-year legislative deal. The House bill, H.R. 928, has the support of 236 members, more than half the chamber, and is a companion to S. 183, sponsored by Senator John Barrasso (R-WY).
The HIT assesses a tax on all health insurance companies of insured plans both inside and outside the exchange based on their “net premiums” written, with tax revenue set to reach $14.3 billion by 2018. In reality, this tax is passed on from insurers to consumers and particularly harms small businesses and self-employed persons purchasing coverage in the individual market. Over a 10-year period, this tax is projected to increase premiums for single coverage by an average of $2,150 and for family coverage by an average of $5,080. The tax is a significant revenue off-set to pay for the costs of the ACA.
The HIT had previously been suspended through last year’s $1.8 trillion end-of-year package, along with a two-year delay of the Cadillac/excise tax and a one-year moratorium of the medical device tax. The one-year moratorium of the HIT is effective for 2017. Together, these amounted to a loss of $35 billion in revenue to the federal government. Based on estimates made by the Congressional Budget Office (the methodology of which NAHU disputes), permanent repeal of all three of these taxes would amount to $250 billion over a 10-year span.