As health care costs continue to rise, affordability continues to be a major concern for Americans and employers. MSNBC’s Chuck Todd highlighted this issue last week on “Daily Rundown” with AHIP’s Robert Zirkelbach.
Starting next year, the health care reform law 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. As Zirkelbach noted, “the tax is doing nothing but adding to the cost of coverage at a time when we are trying to get people to participate and undermines the goal of health care reform.”
In fact, 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.
Bipartisan legislation introduced last week to delay the health insurance tax would provide immediate financial relief for individuals, working families, small businesses, and seniors. To learn more about the impact of the health insurance tax on affordability, click here.