Gardner Leads Bipartisan Group of Colleagues to Request Health Insurance Tax Delay
Washington, D.C. – Today U.S. Senator Cory Gardner (R-CO) and several of his colleagues sent a bipartisan letter to leadership of the U.S. Senate and U.S. House of Representatives urging a delay in the Health Insurance Tax before it goes into effect again on January 1, 2020. The tax is a fee to health insurers on their health policy premiums that increases costs on families, small businesses, seniors, Americans with disabilities, and state Medicaid programs.
“We write to request relief from the costly Health Insurance Tax (HIT) before it goes into effect January 1, 2020. Without Congressional action, the HIT will raise health care costs for consumers and small businesses across the country,” the Members of Congress wrote. “At a time when increasing healthcare costs are a burden on American families, we urge continued bipartisan cooperation to ensure this costly tax does not go into effect.”
A recent report from the Centers for Medicare and Medicaid Services found that the Health Insurance Tax was the primary driver of the rise in health care costs when it was in effect in 2018. Without action from Congress, the HIT is schedule to go into effect again on January 1, 2020.
In January, Senators Gardner, Jeanne Shaheen (D-NH), John Barrasso (R-WY), Doug Jones (D-AL), Tim Scott (R-SC), and Kyrsten Sinema (D-AZ) introduced S. 172, the Health Insurance Tax Relief Act of 2019, to delay the HIT for 2020 and 2021. H.R. 1398 is the companion legislation in the U.S. House of Representatives, and is championed by Representatives Bera (D-CA), Gottheimer (D-NJ), Walorski (R-IN), Marchant (R-TX), and Brindisi (D-NY).
The full letter is available here and below:
Dear Leader McConnell, Leader Schumer, Speaker Pelosi, and Leader McCarthy,
We write to request relief from the costly Health Insurance Tax (HIT) before it goes into effect January 1, 2020. Without Congressional action, the HIT will raise health care costs for consumers and small businesses across the country.
The Internal Revenue Service estimates that in 2020 alone this tax would impose a $15.5 billion fee on health insurance plans. That fee would be passed down to families, small businesses, seniors, Americans with disabilities, and state Medicaid programs.
As costs continue to rise, Americans are being forced to spend an unbearable percentage of their income on health insurance premiums. A December 5, 2019 Centers for Medicare and Medicaid Services Office of the Actuary report on national health care spending demonstrates that when the tax was in effect for 2018 it was a main driver of rising health care costs. According to the report, the net cost of health insurance grew 13.2 percent in 2018, compared to only 4.3 percent in 2017 when the tax was not in effect.
According to the actuarial firm, Oliver Wyman, if the HIT went into effect for 2020 it would raise costs for approximately 142 million Americans. The price increases would particularly impact seniors and Americans with disabilities that utilize Medicare Advantage (MA). Oliver Wyman reports that had the HIT been levied in 2019, MA premiums would have climbed from $393.05 to $612.09—a 55.7% increase.
Congress worked together in a bipartisan fashion to suspend the tax for 2017 and 2019. Our bipartisan legislation, S. 172 and H.R. 1398, the Health Insurance Tax Relief Act of 2019, would delay this tax for two years, 2020 and 2021, and has support from 33 senators and 165 members of the House of Representatives.
At a time when increasing healthcare costs are a burden on American families, we urge continued bipartisan cooperation to ensure this costly tax does not go into effect.
Cory Gardner is a member of the U.S. Senate serving Colorado. He sits on the Energy & Natural Resources Committee, the Foreign Relations Committee, the Commerce, Science, & Transportation Committee, and is the Chairman of the Subcommittee on East Asia, the Pacific, and International Cybersecurity Policy.
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