Imagine being charged nearly $50 million a day in taxes. This is exactly what will happen to American businesses and consumers in 2020 if Congress does not act once again to delay the Health Insurance Tax (HIT) this year.
The HIT was initially included in the Affordable Care Act (ACA); it is essentially a sales tax on health insurance coverage that would hit employers and consumers with higher premiums. Smartly, Congress has enacted a common sense, bipartisan delay of this tax in recent years. No one should have to worry about getting health care for family members with a preexisting condition. But, it is important to recognize that simply increasing taxes does nothing to improve the overall health care system or address the increasing costs of care. It only adds to the already high cost of care – in this instance, on the backs of employers, families and seniors.
We are particularly concerned about the potential impact of this tax on small businesses in our districts and across the country. We hear from our constituents daily about the serious responsibility (and increasing burden) of providing health care for the talented people they employ. But the cost of health care is a reality that impacts the bottom line of every company. These hard-working Americans understand first-hand that increasing the cost of health care makes it far more difficult to hire additional people, reward dedicated employees, bid on multi-year contracts, and make investments needed to expand businesses.
Research shows that businesses of all sizes are impacted disproportionately by this tax. Employers, individuals, and families purchasing coverage on their own bear 60 percent the burden. This is a real hit on millions of hard-working Americans. Without action this year, this will have a significant effect on the national economy, including stifled job creation and hundreds of thousands of jobs lost.
Seniors are also among the most impacted, with 25 percent of the tax falling on Medicare Advantage and Part D plans. That works out to an additional $350 in premium costs per year for Medicare Advantage members and beneficiaries.
Congress was able to take bipartisan action to delay the HIT for 2019. But with health plans beginning to set rates for 2020 premiums in coming months, the time to act for 2020 is now. That’s why we are proud to sponsor along with a bipartisan group of our colleagues, H.R. 5963, which would delay the HIT for 2020.
America can’t afford $50 million per day for health care. Instead, we should be working together to reduce health care costs and increase coverage options so that more families and small businesses can thrive. Taxing health care premiums and sticking our country’s small businesses and seniors with the bill is not the answer. Congress must act now so employers, families and seniors are not hit with this harmful tax.
Gottheimer represents North Jersey’s 5th District and serves as Co-Chair of the bipartisan Problem Solvers Caucus. Katko represents the 24th District of New York and serves as a member of the bipartisan Problem Solvers Caucus.