Opponents urge Congress to suspend ObamaCare tax this year

Opponents urge Congress to suspend ObamaCare tax this year
© Getty Images

Opponents of a tax on health insurance are urging lawmakers to suspend the ObamaCare tax starting this year after House Republican leadership unveiled a stopgap spending measure that included a one-year delay only for 2019.

GOP leaders unveiled the measure late Tuesday as part of their plan to avoid a government shutdown. It included a six-year reauthorization of the Children’s Health Insurance Program (CHIP) as well as a two-year delay of a tax on high-cost insurance plans knows as the Cadillac tax and a medical device tax in an effort to get their members on board with another short-term spending bill.

While GOP leaders have pushed to delay the health insurance tax (HIT) for one year starting in 2019, some opponents say the tax needs to be suspended retroactively for 2018, arguing that it has caused health insurance premiums to rise for millions of people and that rebates would help offset the price hike.


Stop The HIT — a 30-member-plus coalition representing small business owners, their employers and the self-employed — is among those pressing for immediate action.

“While we welcome the suspension of the health insurance tax (HIT) in 2019, small businesses need help now. It’s critical that policymakers provide urgent relief and much-needed certainty by suspending the tax immediately for 2018 and 2019,” the coalition’s executive director, Elena Tompkins, said in a statement Wednesday.

“Millions of small businesses — as well as seniors, middle-class families, and consumers — would benefit from a tax rebate this year as a result of HIT suspension," she continued.

Similarly, the U.S. Chamber of Commerce, which is also a member of Stop The HIT, echoed that sentiment in a Wednesday letter to lawmakers detailing policy priorities for an appropriations package.

“At a minimum, Congress should suspend the HIT retroactive to January 1, 2018, and provide a suspension for at least 2019,” wrote Neil Bradley, the U.S. Chamber of Commerce’s executive vice president and chief policy officer.

However, according to a person in Tuesday night’s GOP conference meeting, the health insurance tax wasn't suspended this year because insurance companies would have received a windfall as they’ve already locked in their 2018 premiums and did so with the thought that the tax would be in place.

A source familiar with negotiations countered that insurers have said if the tax is delayed in 2018, companies would turn those extra dollars back to consumers.

In December, three major insurers — Aetna, Humana and UnitedHealth Group — sent a letter to House and Senate leadership requesting that the tax not go into effect in 2018 and detailing how they view the pause as helping consumers.

“If Congress extends the current moratorium of the tax for 2018, our companies are committed to working with Federal and State regulators, employers and others to ensure that the people, employers and State Medicaid programs affected by the tax directly realize the value of the 2018 moratorium through premium reductions, enhanced benefits, rebates or other mechanisms,” the trio wrote.

The tax was included in ObamaCare in an effort to help pay for the bill, with advocates arguing it was put in place to help the government pay for expanding health insurance to more people.

Insurers have been hit with the tax before, but a one-year moratorium was enacted last year.