Opinion: Why Health Insurance Tax could mean skyrocketing premiums
Whether I am home in Charleston or visiting with South Carolinians in Washington, D.C., I hear this concern echoed time and again: Health care costs are too high for too many.
Indeed, the latest government projections show that health-care spending continues to increase at a rate of 5.5% annually – faster than wages or inflation – and will consume nearly 20 percent of our economy by 2027.
In light of this trend, you’d think Congress would be taking steps to lower consumers’ health-care spending, but some in Washington would have us move in precisely the opposite direction.
A multi-billion-dollar tax on 142 million Americans’ health coverage known as the Health Insurance Tax or, more appropriately, the “HIT,” is set to take effect in January 2020. With my support, Congress has delayed this senseless tax twice with bipartisan support, but now we are up against another deadline – and vulnerable patients’ health-care costs hang in the balance.
If Congress doesn’t act before Dec. 31, the HIT will come roaring back. This threatens up to 286,000 Americans’ jobs and livelihoods, according to a study from the National Federation of Independent Business, and will carry a total impact of $15.5 billion in 2020 alone.
Skeptics of our fight to stop the HIT point out that this is a tax on insurers, not individuals, but this betrays a dangerous naivete that hurts consumers. These taxes will inevitably be passed on to beneficiaries in the form of higher premiums. Only in Washington could someone expect businesses to absorb billions in new costs without a downstream effect on consumers.
To make matters worse, more than 25 percent of the HIT falls on Medicare Advantage and Part D plans – making this a direct hit on South Carolina seniors, many of whom are on fixed incomes. Left unaddressed, the HIT could equate to a $3,052 cost increase over the next decade per Medicare Advantage beneficiary.
The Better Medicare Alliance, a coalition of Medicare Advantage supporters and advocates, warns that, “The HIT could impact not only the cost of health care, but the availability of supplemental benefits like dental, vision, and hearing” – vital services that many of our state’s more than 273,000 Medicare Advantage beneficiaries rely on to stay well.
At a bare minimum, Congress must act quickly to further delay this tax while we work toward more permanent solutions. That is why I partnered with Democrats and Republicans alike to introduce the Health Insurance Tax Relief Act of 2019.
Our bill, now sponsored by nearly one-third of the U.S. Senate, would stave off the HIT for two more years so that families and seniors could plan for the year ahead without fear of this tax wreaking havoc on their budgets – and lawmakers could continue to seek out long-term solutions to our health cost trend.
A bipartisan companion bill in the House of Representative has attracted a whopping 138 co-sponsors. Now, we need party leaders to commit to allowing an up-or-down vote.
It is clear there will be tough choices necessary in the years ahead to contain rising costs and protect patients – but this should be among the easiest votes that any senator takes. This Christmas, Washington should give Americans the gift of decisive action to stop the HIT.