NAHU joined the Stop the Hit Coalition in sending a letter on Tuesday to Senate Majority Leader Mitch McConnell (R-KY), Senate Minority Leader Chuck Schumer (D-NY), and whips, Senators John Cornyn (R-TX) and Dick Durbin (D-IL), requesting that the Senate health reform package include a full repeal of the health insurance tax (HIT). The HIT was previously granted a one-year moratorium under legislation passed in December 2015. Since then, NAHU and our coalition partners have been aggressively lobbying Congress to pass a full repeal of the tax, expected to total $14.3 billion next year that will ultimately be passed onto health insurance consumers.
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. 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.
Our letter this week notes that nearly 400 bipartisan members of Congress supported the one-year moratorium in 2015. Previous legislation in the 114th Congress had the official backing of 236 members of the House, more than half of the chamber, and the Senate companion bill was co-sponsored by 39 senators. Our letter specifically noted the impact that the HIT will have on Americans, with increased premiums for small businesses, middle-income families, seniors and young workers, with more than half of the tax paid for by those earning between $10,000 and $50,000.
Both the Senate’s Better Care Reconciliation Act and the House-passed American Health Care Act included a permanent repeal of the HIT, along with virtually all of the ACA’s other taxes, including the medical device tax, net investment tax, Medicare wage surtax increase, and the tanning tax. It did not include a repeal of the Cadillac/excise tax, but instead extended the current delay through fiscal year 2025. Last week, NAHU sent a letter with the National Coalition on Benefits in support of a full repeal of that tax, along with not making any changes to the employer exclusion of health insurance.