NAHU joined the Stop the Hit Coalition in sending a letter on Wednesday to Senate HELP Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA), urging them to include a full repeal of the health insurance tax (HIT) with any market-stability legislation. The HIT was previously granted a one-year moratorium under legislation passed in December 2015 and is due to take effect again in the 2018 plan year, adding an additional $500 increase in average premiums for each affected family as the taxes are ultimately be passed onto health insurance consumers. NAHU and our coalition partners advocated for the one-year moratorium and have continuously lobbied for a full repeal of the tax.
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 family coverage by an average of $5,080. The tax is a significant revenue offset to pay for the costs of the ACA.
This week’s letter to the HELP Committee leadership notes that repealing the tax can help to provide immediate market stability, the primary purpose of holding the hearings this month and the forthcoming legislation expected to be introduced in the coming weeks. The letter emphasizes 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. It also notes the strong bipartisan support for relief from this tax, with nearly 400 bipartisan members of Congress supporting 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.