Stabilize Insurance Markets Through Across-The-Board Relief from Obamacare’s Health Insurance Tax

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Posted by Alexander Hendrie on Friday, September 1st, 2017, 2:00 PM PERMALINK

Eight governors from across the country led by Gov. John Kasich of Ohio and Gov. John Hickenlooper of Colorado have released a number of proposals to stabilize healthcare insurance markets. Among the proposals, these governors suggest exempting counties with only one insurer from Obamacare’s health insurance tax.

While the governors are right to call for relieving Americans from the health insurance tax, they should not exempt a select few from this tax. Instead, Congress should ensure that everyone is protected from the higher costs that are being driven by the health insurance tax.

Roughly one-third of counties nationwide have just one insurer operating on Obamacare’s marketplaces, as the law’s costly mandates and regulations have increased costs. Next year, it is estimated that this number could increase to nearly half of the counties in the country.

The health insurance tax is set to go into effect at the end of the year, and will total $14.3 billion in higher taxes in 2018.  Clearly, this will contribute to the lack of coverage options. However, many Americans are shouldering the negative impacts of the health insurance tax, and relief should not be assigned on a case by case basis. 

Across the country, the health insurance tax hits 11 million households that purchase health care through the individual insurance market. This tax also hits 23 million households covered through their employers, and 1.7 million small businesses. Half of this tax is paid by those earning less than $50,000 a year. According to research by the American Action Forum, this tax is responsible for increasing premiums by an average of $5,000 per family over a decade.

According to the National Federation of Independent Businesses, the health insurance tax has cost an estimated 286,000 small business jobs and $33 billion in lost sales.

Congress’ failure thus far to repeal Obamacare taxes – including the tax on Americans facing high medical bills, taxes on health savings accounts, a tax on prescription medicines, and the tax for failing to buy health insurance—has already been devastating to American families, seniors, and businesses.

The last thing taxpayers need is another Obamacare tax to go into effect, and 36 conservative groups and activists recently told lawmakers that they must act so to prevent the health insurance tax from harming Americans. However, this relief should be offered to all, not a select few. 

Photo Credit: Michael Havens

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