The Joint Committee on Taxation released a report to Committee of Ways and Means Chairman Dave Camp shortly after the Supreme Court ruling that recalculates the costs to insurers, consumers and businesses under the new plan. According to their report – which does not include updated scores for the individual mandate, the employer mandate, or certain other revenue effects – the tax increases that remain on the books will cost taxpayers more than $675 billion over the next ten years. Chief among these will be the sales tax on the purchase of health insurance, totaling $101.7 billion, and making it larger than all the other industry-specific taxes combined.
“The health insurance tax will add a financial burden on families and small businesses at a time when they can least afford it, and it should be repealed, ” says AHIP, a trade association representing health insurance industry providers, in today’s call for the repeal of the health insurance tax before it can take affect. As they report,
· Starting next year the ACA imposes a new $100 billion tax on health insurance. The tax will start at $8 billion in 2014, increasing to $14.3 billion in 2018, and will continue to increase each year.
· The health insurance tax is larger than the device tax and the prescription drug tax combined.
· The health insurance tax will increase costs for individuals and families purchasing coverage on their own, small businesses, seniors and people with disabilities enrolled in a Medicare Advantage plan, and state Medicaid managed care plans.
· The health insurance tax is far greater than the minimum penalty for those who choose not to buy health insurance – further incentivizing young, healthy people to forgo purchasing insurance until they need medical care.