The countdown is on. Congress has less than 76 days to repeal or suspend the Health Insurance Tax (HIT), a $267 billion+ sales tax on health insurance. The Michigan Chamber is warning about the consequences of inaction: premium increases for businesses of all sizes and types, individuals, seniors, states, and taxpayers.
In a new interview on the Michael Patrick Shiels show, Chamber lobbyist Wendy Block stressed the importance of repealing the HIT. Without repeal or suspension, businesses buying coverage in the small-employer market could see their premiums go up an additional $500 per family per year because of this tax.
There is currently a one-year moratorium on the HIT - but that suspension is set to expire at the end of 2017. Without action by Congress, this sales tax on health insurance coverage will return in 2018. The Michigan Chamber supports full repeal of the health insurance tax because it makes health care even less affordable than it already is. The cost impact of this tax is big; if the HIT isn’t repealed or delayed, it will add an estimated $603 million to the cost of health insurance coverage in Michigan.
In 2018 alone, the tax will result in premium increases:
- It will cost employers buying single coverage in the small group market an added $192 more per year per enrollee.
- It will cost employers in the large group market buying family coverage an extra $524 more per year per enrollee.
- It will cost individuals buying single coverage an extra $159/year;
- It will cost senior citizens buying a Medicare Advantage plan $254 more per year; and
- It will increase costs for the state because the cost of Medicaid managed care plans for the low income and disabled will increase by $170 per enrollee per year.
Congress is running out of time to get this done. Realistically, their window is closing because health plans are currently finalizing their products and rates for 2018. Without quick action by Congress, half of all Americans—more than 156 million people—could get HIT. The Michigan Chamber is urging Congress to act now to improve the affordability of health care and health insurance.