What is the health insurance tax?
The health reform law imposes a new sales tax on health insurance that increases the cost of health care coverage. The amount of the tax will be $8 billion in 2014, increasing to $14.3 billion in 2018, and increased based on premium trend thereafter. The health insurance tax will exceed $145 billion over the next ten years.
How will the tax impact you?
The Congressional Budget Office (CBO) has said that this tax will be “largely passed through to consumers in the form of higher premiums.” An analysis by Oliver Wyman estimates that this tax “will increase premiums in the insured market on average by 1.9% to 2.3% in 2014,” and by 2023 “will increase premiums 2.8% to 3.7%.”
An updated report by Oliver Wyman, “Annual Tax on Insurers Allocated by State,” estimates the impact this tax will have on individual market consumers, employers, and Medicare Advantage beneficiaries in all 50 states, as well as the impact on state Medicaid managed care programs. Using this data, AHIP has developed infographics for each of the 50 states and Washington, DC, detailing the effect of the tax.
This tax adds a financial burden on families and small businesses at a time when they can least afford it, and it should be repealed. AHIP supports legislation that would repeal the tax.
AHIP has launched Time for Affordability to raise awareness about how the health insurance tax and other provisions will affect premiums.
A bipartisan national poll commissioned by The Morning Consult found that the majority of Americans oppose the health insurance tax.
There are number of steps you can take to help sustain the momentum to repeal this tax including:
- Sharing this background video about the health insurance tax
- Sharing one of these infographics that shows how the health insurance tax will impact your state
- Sharing this video showing the support Congress has given legislation to repeal the tax
- Joining the conversation on Twitter
“Annual Tax on Insurers Allocated by State”
“Higher Costs and the Affordable Care Act, The Case of the Premium Tax”
Douglas Holtz-Eakin, American Action Forum
“Cost of the Insurance Premium Tax to Individuals and Families”
Edmund Haislmaier, The Heritage Foundation