A bipartisan group of House lawmakers on Thursday moved to delay the health insurance tax for another year, triggering the next round of work to curb the Affordable Care Act's taxes on the industry.
While the lawmakers aren't proposing an all-out repeal of the tax, the measure would be the third delay of the assessment. Reps. Kristi Noem (R-S.D.) and Jackie Walorski (R-Ind.) co-sponsored the bill along with Reps. Kyrsten Sinema (D-Ariz.) and Ami Bera (D-Calif.).
Insurers have to pay the tax for 2018, though it was suspended in 2017 and Congress passed another moratorium for 2019. Insurers estimate it will cost them $14.3 billion this year.
The tax went into effect with the Affordable Care Act, and cost the industry a total of $8 billion in 2014. This went up to just over $11 billion in 2015 and 2016 until the delay in 2017.
Oliver Wyman Actuarial Consulting projected that the tax would likely raise premiums by 2.7% to 2.8% each year it is in place as insurers build it into plans. That could spell $165 hikes for enrollees in the individual market, more than a $520 increase for a family in the small group market and more than a $560 increase per family contract in the large group market. Medicare Advantage individual plans could go up by $255 and Medicaid managed care plans by $195.
The insurance trade association America's Health Insurance Plans (AHIP) applauded the move, which they say will lower rates across the market for 2020.
"Americans have been calling for more affordable coverage and care, and this bill delivers for them," AHIP said.
Along with the 2019 delay of the health insurance tax, Congress also delayed Cadillac tax and 2.3% excise tax on the sale of medical devices for two years. The only tax currently in effect is the employer mandate.
While carriers say lifting the taxes will relief enrollees, the Congressional Budget Office says the delays will add considerably to the deficit.
Last year, the CBO said repealing those taxes would reduce federal revenue by $144.7 billion over 10 years. A delay of the Cadillac tax until 2026 would cost the government $66 billion, while wiping out the device tax would cost $19.6 billion over 10 years.
An edited version of this story can also be found in Modern Healthcare's May 28 print edition.
