The current national debate surrounding health care centers around two key components — how can we make health care more affordable and accessible for millions of Americans? While there is no “silver bullet” that will fix these issues, eliminating the sales tax on health insurance would lower the cost of coverage for hardworking Americans and small businesses.
The ACA’s health insurance tax is bad policy and a burden to millions, plain and simple. Worse, this tax is regressive, inflicting the most harm on those who can least afford it. Want proof? Estimates show working families will be forced to pay $5,000 in higher premiums over a decade. In addition, the HIT will cost small businesses $500 per employee each year and could reduce private sector jobs by 249,000.
At a time when the president has called for a return to the golden age of jobs and a competitive American workforce, this tax alone discourages the type of innovation and investment that small businesses should be dedicating to their employees and future growth.
States across the country have seen this economic hit first hand. Take Wisconsin, for example. The Badger State boasts one of the strongest construction industries in the country, more than 400,000 small businesses and more than 1.2 million workers. Rather than focusing on job training and competitive benefits, we face painful trade-offs every day that leave our members and their employees at the whim of antiquated and misguided tax policies. By driving up the cost of premiums and forcing employees to take on greater cost burdens, the health insurance tax diminishes our ability to compete within the U.S. marketplace.
Repealing this sales tax on health insurance would lead to a 3 percent reduction in insurance premiums on average, according to recent reports and company assessments. For small businesses across the U.S., this is the type of common-sense solution that we want to see leaders in Washington prioritize. As they advance new policy proposals aimed at improving the affordability and accessibility of healthcare for all Americans, repealing the health insurance tax must be included as part of these comprehensive reforms.
Our members were encouraged to see recent GOP health reform proposals in both the House and Senate included immediate and permanent repeal of this tax. Indeed, absent immediate Congressional action, the health insurance tax is projected to increase to $14.3 billion in 2018 – further driving up the cost of premiums for our members, their employees, and those most in need of relief.
Already, health insurance companies are preparing to finalize 2018 premiums and coverage options in states across the country. Now is the time for action. Now is the time for Congress to lead the way in supporting small businesses as well as millions of Americans who demand relief from this bad tax policy.
On behalf of our more than 21,000 members across the country, we urge policymakers to prioritize the middle class and our economy by immediately and permanently repealing the health insurance tax now, once and for all.
John Mielke is president of the Wisconsin Chapter of the Associated Builders and Contractors, Inc. Chuck Goodrich is chairman of the Associated Builders and Contractors Inc. National Executive Committee. They are members of the Stop the HIT Coalition.
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