Majority of U.S. House of Representatives Supports Repeal of Health Insurance Tax

For Immediate Release
June 17, 2013

Robert Zirkelbach

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Bipartisan Legislation to Repeal Tax Reaches 218 Co-Sponsors 

Washington, D.C. – Bipartisan legislation to repeal the Affordable Care Act’s (ACA) health insurance tax has reached 218 co-sponsors, a majority of the U.S. House of Representatives.  Reaching 218 co-sponsors is an important milestone that adds momentum to efforts to repeal this tax in Congress.    

The ACA imposes a new sales tax on health insurance that starts at $8 billion in 2014, increases to $14.3 billion in 2018, and increases every year thereafter. The Joint Committee on Taxation estimates that the health insurance tax will exceed $100 billion over the next ten years.  The health insurance tax is larger than the device tax and the prescription drug tax combined. 

Representatives Charles Boustany (LA) and Jim Matheson (UT) earlier this year introduced the Jobs and Premium Protection Act (H.R. 763), bipartisan legislation to repeal the health insurance tax.  This bill now has over 218 co-sponsors, representing a majority of the U.S. House of Representatives.  Senators John Barrasso (WY) and Orrin Hatch (UT) introduced a Senate version of this bill (S.603).   

“Taxing health insurance makes it more expensive, and that is the opposite of what health care reform was supposed to accomplish,” said AHIP President and CEO Karen Ignagni.  “Congress should take action this year to protect families, small businesses, and seniors from the harmful effects of this tax.”   

According to an analysis by Oliver Wyman, this tax alone will mean that next year an individual purchasing coverage on his or her own will pay $110 in higher premiums, small businesses will pay an additional $360 for each family they cover, seniors enrolled in Medicare Advantage will face $220 in reduced benefits and higher out-of-pocket costs, and state Medicaid managed care plans will incur an additional $80 in costs for each person enrolled.  A follow-up analysis by Oliver Wyman highlights the impact this tax will have on consumers and employers in all 50 states.   

AHIP recently submitted comments to the House Ways and Means Committee Work Groups urging repeal of the ACA's health insurance tax as part of a comprehensive tax reform package.   

To learn more about the impact the health insurance tax will have on the affordability of health care coverage, visit AHIP’s Coverage Blog here: End the Health Insurance Tax.  AHIP is also raising the awareness of the health insurance tax repeal effort on Twitter using the hashtag #repealthetax

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