Health Insurance Tax Poised to Impact Millions of Americans
The ACA “HIT” Job
Since it became law in 2010, the Affordable Care Act has had hit after hit of failures at the expense of American families and businesses. For instance, millions of people discovered the hard way that if they like their insurance or doctors, they cannot keep either one. That includes some five million people who have already received cancellation notices from their insurance companies.
Thousands of small businesses are bracing themselves for the onset of the employer mandate in 2015, which will lead to tens of millions more of those cancellation notices later this year.
Now, nearly two million small businesses are literally getting “HIT” with yet another provision that will affect 11 million employees who have plans in the individual market and 23 million covered by their employer.
“HIT” appropriately stands for the “Health Insurance Tax” – one of the largest tax increases included in the ACA. It took effect January 1, 2014 and is basically a sales tax on policies sold to individuals, working families small businesses and seniors.
The tax will raise an estimated $8 billion this year and will rise to $14.3 billion in 2018. Overall, the tax is expected to cost $101.7 billion in the first ten years and $208 billion in the decade to follow.
Like a lot of taxes on business, the cost will be passed along to both employers and employees in the form of higher health insurance premiums. The Congressional Budget Office predicts the average family premium will go up $475 per year, or nearly $5,000 per family over a decade.
An insurance industry study says the HIT will hit even harder – more than $2,800 per person and $6,800 per family over a decade.
As if that’s not enough of a blow to American businesses and families, the National Federation of Independent Business Research Foundation found the HIT will lead to as many as a quarter million lost jobs, 59 percent of those suffered by small businesses.
And these are just a few of the devastating effects of this tax, and a painfully demonstration of how the ACA has failed to address the most glaring problem with the health care system: Runaway costs. Trying to provide insurance for 30 million more Americans did nothing to fix the cost problem that made health coverage too expensive for too many people. This is a long-time problem and still unsolved by the ACA.
Job Creators Network Foundation believes real healthcare reform needs to put patients in charge of their healthcare dollars and thus remove power from health insurance and government insurance bureaucracies. That would make the ACA more affordable and even more affordable than our current broken health care model.