From Dave Simpson, Lew Ebert, Larry Wooten, Gary Harris, Tim Kent, Lynn Minges and Andy Ellen:
It’s possible that you haven’t heard much about the Health Insurance Tax (HIT) that was passed as part of the Affordable Care Act, but you will unless Congress acts.
On behalf of our state’s leading business and trade groups, we are raising the alarm about this imminent threat, which is set to return in 2018 and which insurance companies will have to account for in a few weeks when they begin announcing premiums for 2018.
The Health Insurance Tax will significantly burden North Carolina businesses and employers, making it difficult to provide health insurance to our employees, expand our workforces and grow North Carolina’s economy.
In 2015, more than 400 Democratic and Republican members of Congress and the Senate acted in a bipartisan manner to delay the health insurance tax for 2017. Democratic Leader Nancy Pelosi noted of the delay of the HIT that it “suspends the Health Insurance Tax in the Affordable Care Act for one year – 2017, which will result in a reduction in health insurance premiums.”
That delay lowered policyholders’ premiums by 3 percent and saved the health care system $13.9 billion. However, without immediate action, the tax will kick in on January 1, 2018, costing Americans, employers, states and the federal government $22 billion in 2018 and $267 billion from 2018 to 2027.
Actuarial consulting firm Oliver Wyman estimates that if left in place, over the next decade the HIT will increase the cost of premiums by $2,326 for individuals and $6,675 for family coverage for large employers, and $2,282 for individuals and $6,190 for family coverage for small businesses.
Insurance commissioners, actuaries and independent researchers all agree that delaying the health insurance tax will help lower premiums by at least 3 percent, and a delay of the HIT should be part of any stabilization package considered by Congress.
Additionally, thousands of retired state employees who have Medicare Advantage will face premiums that are 30 percent higher because of the tax on health insurance.
This is unacceptable.
Our member companies want to be good partners in providing access to health care and creating new jobs, but this tax would greatly hinder our ability to do both and could even force our members to cut jobs. We are asking Congress to make delaying the HIT a major and urgent priority.
Simpson is CEO of Carolinas AGC. Ebert is CEO of the North Carolina Chamber. Wooten is president of the North Carolina Farm Bureau. Harris is executive director of the North Carolina Petroleum Marketers Association. Kent is the executive director of the North Carolina Beer & Wine Wholesalers Association. Minges is the CEO of the North Carolina Restaurant and Lodging Association. Ellen is the president of the North Carolina Retail Merchants.