Pressure Grows For Repeal Of ObamaCare's Health Insurance Tax (Another $100 Billion)

Tax News ^ | November 5, 2013 | Mike Godfrey

[2ndDivisionVet]

With the date of its imposition in the United States on January 1, 2014, drawing nearer, what President Barack Obama's Affordable Care Act (ACA) calls the health insurance provider fee, or, as it is known under its more general name, the health insurance tax (HIT), is arousing increasing opposition.

Beginning in 2014, the ACA assesses a fee on health insurance providers that, across the industry, will total USD8bn, increasing to USD14.3bn by 2018, and then will continue to increase based on premium trends every year. The Joint Committee on Taxation (JCT) has estimated that the fee, which, it has said, is essentially an excise tax based on the sales price of health insurance and will not be tax deductible, will exceed USD100bn over the next ten years.

In effect, it is estimated that the HIT will increase individual and small group health insurance premiums by an additional 2-3 percent. Both the JCT and the Congressional Budget Office have indicated that they expect a very large portion of the HIT to be passed through to the purchasers of insurance in the form of higher premiums, driving up the cost of insurance for families and small businesses.

With two business and commercial associations, the Affordable Coverage Project and the Stop the HIT Coalition, being established and demanding elimination of the HIT, the Heritage Foundation (HF) has also, in a paper, called for its repeal as it "will have an adverse impact on consumers, but have little impact on large employers and their employees because large firms usually self-insure (and are exempted from the tax). … It should be repealed."

The HF confirms that the HIT will affect almost exclusively small businesses and individual consumers. In 2011, 86.3 percent of employers with 1,000 or more employees were in self-insured plans. About 35 percent of employers with 100–999 employees self-insured and less than 13 percent of employers with fewer than 100 employees self-insured.

"Because the tax is an annual tax paid by insurance companies, it is effectively hidden from health insurance buyers, including both individual consumers and small employers," the HF concludes. "The HIT, of course, is just one of many reasons that premiums will increase under Obamacare."

In addition, Ways and Means Oversight Subcommittee Chairman Charles Boustany (R – South Louisiana) and Ami Bera (D – California) have introduced into the House of Representatives a bipartisan bill, the Small Business and Family Relief Act, which would delay the imposition of the HIT by two years.

"Obamacare continues to fail the American people while burdening small businesses with taxes," Boustany stated. "Employers purchasing fully insured coverage, in addition to individuals who purchase coverage on their own, will face higher premiums due to this tax. Delaying this tax will reduce the financial burden on families, small businesses and seniors when they purchase coverage."

"We must do everything we can to lower the skyrocketing cost of health care for middle class families," added Bera. "The ACA is giving millions of people health care who didn't have it previously, but we need to work together to fix the areas of it that are problematic and make it work better for the American people. This bill would delay the collection of the health insurance tax until 2016, to allow health insurance markets time to stabilize while providing immediate relief to working families, small businesses and seniors."

[2ndDivisionVet]

I don't recall hearing about this, do you?

[flaglady47]

Yet another plot by the Obama regime to destroy the middle class, especially small business. Soon we will have the uber rich with crony capitalism and a large lower class that used to be middle class, along with the ever present and needy welfare class. A commie, pinko, socialist elitist’s wet dream. Obama will have succeeded in destroying our capitalist country and turned it into a European model socialist state.

[2ndDivisionVet]

Hunger Games scenario.

[tcrlaf]

Well...
Liberal hero George Wiley did create ACORN (Called the NWRO then) to set the conditions for a Black Radical Socialist takeover of America by forcing the economy to crash, leading to revolution.

[MinuteGal]

Perfectly put.

The DemonCrats commie agenda for the U. S. in a nutshell.

Leni

[Texas resident]

We had to pass the bill to find out what was in it.
There are a pile of new taxes hidden in obamacare.
We have only scratched the surface.

[bert]

-——but have little impact on large employers and their employees because large firms usually self-insure-——

Were it not for the Heritage Foundation study noted in the article, I would not believe this to be true. I would have thought that most businesses, regardless of size, purchase insurance for their employees within a group plan. The companies do not self insure in the sense they pay providers for medical expenses.

Somehow I can not understand this piece at all.

[rawhide]

the tax is an annual tax paid by insurance companies, it is effectively hidden from health insurance buyers, including both individual consumers and small employers," the HF concludes. "The HIT, of course, is just one of many reasons that premiums will increase under Obamacare."

what other hidden taxes are there? Just because it is hidden, does not mean consumers will not be paying for it. As was said before, companies do not pay taxes, consumers do.

[ridesthemiles]

When all these existing insurance companies go out of business, what kind of hit will that be on shareholders & the stock market?

[Mygirlsmom]

When all these existing insurance companies go out of business, what kind of hit will that be on shareholders & the stock market?

Well, one thing's for sure....the unemployment rate is sure to "plummet" with all the people who will be out of jobs.