Health insurance tax repeal gaining traction

By BenefitsPro

By Kathryn Mayer

The health insurance industry is pushing legislation that would repeal the new tax on health insurance plans — and it has some serious support.

The Jobs and Premium Protection Act (H.R. 763), bipartisan legislation to repeal the health insurance tax in President Obama’s health care law, now has 218 cosponsors in the House, America’s Health Insurance Plans reported this week.

The carrier group has slammed the tax and thrown its support at the legislation to repeal it.

The House bill was introduced by Reps. Charles Boustany, R-La., and Jim Matheson, D-Utah.

The Patient Protection and Affordable Care Act imposes a new sales tax on health insurance that starts at $8 billion in 2014, increases to $14.3 billion in 2018, and will increase based on premium trend thereafter. The Joint Committee on Taxation estimates that the health insurance tax will exceed $100 billion over the next decade.

Opponents argue the fees would be largely passed through to consumers in the form of higher premiums on private coverage.

“Taxing health insurance makes it more expensive, and that is the opposite of what health care reform was supposed to accomplish,” AHIP President and CEO Karen Ignagni said.

In comments submitted to the House Ways and Means Committee Work Groups in April, AHIP wrote the “tax will be particularly painful for vulnerable populations, including consumers who buy coverage on their own, small business owners who struggle to provide coverage to their employees, seniors who rely on the Medicare Advantage program as a health care safety net, and low-income people who are served by state Medicaid programs.”

Small business groups also have been fighting back against the tax, arguing it will kill thousands of private-sector jobs.

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