There’s one aspect of the Affordable Care Act that health insurers and other groups are loudly calling for Congress to repeal: the law’s health insurance tax. And while the GOP wants the law to be repealed in the coming weeks, it’s unclear if all taxes will be undone in a repeal measure.
Insurers are pushing for Congress to repeal the tax, one of several included in the Affordable Care Act, before they set their rates for next year. That is typically done in the spring, when insurers file their requested rates for different products to state or federal regulators. Insurers say if it’s not repealed before then, they’ll have to account for the tax in 2018 premiums.
It’s unclear if the GOP’s plan to repeal the ACA in the coming weeks will immediately end all of the taxes passed in the law. It could help to keep some taxes alive, as a way to cover the costs of Republican’s replacement bill. Rep. Kevin Brady (R-Texas), chair of the powerful Ways and Means Committee told Bloomberg last week that the law’s 23 taxes would be included immediately in a repeal, but Sen. John Cornyn (R-Texas), the majority whip, told reporters Thursday that the inclusion of the law’s taxes in a repeal bill is a topic of discussion that “hasn’t been resolved.”
The tax on health insurers was included to help pay for the cost of expanding coverage to millions of Americans. Insurers say they will pass the tax on to consumers via premiums. The tax was scheduled to take effect in 2018, after Congress approved a delay in December 2015.
Congressional aides say repeal is likely where the tax will be killed, not in the replacement plan. But industry still has concerns that the tax could end up being factored into next year’s premium rates.
America’s Health Insurance Plans, the trade group representing health insurers, praised bipartisan legislation from Reps. Kristi Noem (R-S.D.) and Kyrsten Sinema (D-Ariz.) earlier this month that would repeal the tax, and the group’s CEO Marilyn Tavenner penned a blog post citing a study that found the tax would add $220 annually to consumers who purchase insurance on the individual market.
AHIP isn’t the only group pushing for repeal. The Chamber of Commerce has run advertisements urging the repeal of the tax this month, and Grover Norquist’s group, Americans for Tax Reform, has also urged the repeal of the tax, along with others under the law.
Blair Holmes, a spokeswoman for the Chamber, said in an email that it was important to highlight how the tax could be factored into premiums for individuals and small businesses if not repealed before they renew their coverage this year. She added that lawmakers shouldn’t delay a repeal of the tax from taking effect.
“Policymakers have indicated that they intend to have a transition from Obamacare into a new system,” she said. “Allowing tax increases to take effect during this transition would further destabilize the insurance marketplace and disrupt any transition period.”