Washington, D.C.—New data from independent actuaries at the Centers for Medicare and Medicaid Services (CMS) found that “the pace of spending on health care nationally is rising in part because of an Affordable Care Act tax on insurers,” according to the latest reporting from The Wall Street Journal (highlights below). The Health Insurance Tax (HIT)—which adds more than $15 billion to the cost of coverage for millions of Americans—is fundamentally flawed policy that undermines the goal of affordable care for consumers. In response to the latest national data, the Stop The HIT Coalition issued the following statement:
“The latest National Health Expenditures data is a sobering reminder that the Health Insurance Tax (HIT) is only adding to the cost burden facing the country and millions of Americans. Next year alone, small business employees and their families will pay $500 more on average for their health coverage—a cost challenge that Congress can address by suspending the HIT now.”
“Suspending the HIT is a proven, common-sense solution to lower our unsustainable health care costs. In 2017—a year when the HIT was suspended, the net cost of health insurance was around 4.3 percent of overall health spending. Yet, when the HIT was in effect a year later, health insurance costs grew to 13.2 percent. The data is clear: Congress must take action to suspend the HIT now and lower costs for small businesses and their employees, families, seniors, and consumers.”
More Uninsured People, Faster Growth in Health-Care Spending Due to ACA Tax, Report Says
By Stephanie Armour
December 5, 2019
- “More Americans are going without health coverage and the pace of spending on health care nationally is rising in part because of an Affordable Care Act tax on insurers, Trump administration officials said Thursday.”
- “Overall, national health-care spending rose to $3.65 trillion in 2018, up 4.6% from 2017. The U.S. spent $11,172 per person, and national health-care spending accounted for 17.7% of the economy last year, compared with 17.9% in 2017.”
- “While the overall acceleration in national health-care spending wasn’t that large relative to other years, an Affordable Care Act tax is being blamed for most of the increase. The tax, an annual fee on all health insurers, is among several imposed under the law to cover its estimated 10-year cost of more than $1 trillion.”
- “The tax has been controversial, with consumer and industry groups saying it will raise premiums and hurt consumers. Congress suspended the tax in 2017 and 2019. It is slated to kick in again in 2020.”
- “Federal officials on Thursday linked the tax to a rise in the net cost of private insurance, which includes factors such as insurers’ costs for premium taxes and bills. The cost grew 15.3% last year to $164 billion, its fastest rate of increase in 15 years.”
- “Officials said the growth in the net cost of insurance was also behind some of the growth in spending on Medicaid, a federal-state program for low-income and disabled people. Overall spending on the program increased 3% to about $598 billion in 2018.”
- “The impact of the tax in 2018, when it was in effect, could provide a glimpse at its implications for future years and galvanize its opponents. A coalition of industry and consumer groups are lobbying for a two-year delay. The levy, known as the ‘HIT tax,’ is expected to generate $15.5 billion in 2020, according to the Internal Revenue Service.”
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Media Contact: Erin E. H. Dixon, edixon@reservoircg.com
About Stop The HIT
The Stop The HIT Coalition represents the nation’s small business owners, their employees and the self-employed who are actively working to repeal the Health Insurance Tax. Since the Coalition’s formation in 2011, it has grown to include more than 35 national organizations, representing millions of small business owners across the country.
Additional information may be found at www.StopTheHIT.com.
Twitter: @StopTheHIT
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