The Obama administration has proposed rules implementing a health insurance premium tax to help fund the healthcare reform law, even as health insurers and Republicans continued a push to kill it.
The health insurance tax (PDF)
is expected to collect $8 billion in 2014 and rise to $14.3 billion by 2018, according to the proposed rule.
The proposed rule also specified entities that are exempt from the tax, including self-insured employers and any government entities. The tax excludes long-term-care insurance and Medicare supplemental health insurance plans, as well
Insurers that are subject to the tax responded to the proposed rule by reiterating long-standing objections that the tax will just increase premiums.
“Imposing a new sales tax on health insurance will add a financial burden on families and employers at a time when they can least afford it,” Karen Ignagni, president and CEO of America's Health Insurance Plans, said in a news release.
Insurers highlighted the costs that they expect the tax to add to individuals' insurance premiums, such as an estimated $110 more in 2014 for buyers of individual coverage plans.
Rep. Charles Boustany Jr. (R-La.), chairman of the Ways and Means Oversight Subcommittee, recently reintroduced a repeal of the insurance tax that garnered 218 cosponsors in the last Congress.
Boustany's panel plans to review the impacts of the insurance tax, among other levies created by the healthcare overhaul, at a March 5 hearing.
“The president's healthcare law imposes a number of new taxes and reporting requirements on individuals and various industries—and many of those tax hikes hit the middle class,” Boustany said in a written statement issued Friday.
However, any legislation undermining the funding for the Patient Protection and Affordable Care Act faces a dim outlook in the Democratic-controlled Senate, according to health policy experts.