Heather C. Briccetti, Esq., president and CEO of The Business Council of New York State, Inc.
New Yorkers are well aware that Tax Day is April 15, but a second tax day is just around the corner. This one is going to cost workers, families, seniors, and taxpayers billions of dollars and has the potential to kill thousands of jobs.
On June 15 the Internal Revenue Service will send out the initial bills for ObamaCare's Health Insurance Tax. This year's tax bills alone are expected to total $8 billion, rising to more than $100 billion over the next decade. Though the IRS sends the bills to insurance companies, the tax is a sales tax on policies that insurance companies, like any business, pass along to consumers and employers.
At over $100 billion, the Health Insurance Tax is the largest tax in the Affordable Care Act. The tax touches practically every health care consumer, increasing the financial burden and limiting choice for employees with company-sponsored health coverage, low-income families on Medicaid and seniors on fixed incomes alike.
Study after study reveals the damaging impact of this new tax. The Health Insurance Tax will immediately increase both employer and employee health care costs. A study by the a former head of the Congressional Budget Office found that the tax will increase premiums of employer-sponsored insurance by as much as three percent, or about $5,000 per family over the next ten years. Individuals who purchase coverage on the public exchanges, but who do not receive government subsidies to help lower the cost of premiums, will pay a higher share of the Health Insurance Tax than subsidy-eligible consumers.
As employers face increased health care costs, these costs are passed on to consumers or even worse, jobs are lost. It has been estimated that Health Insurance Tax will cost our economy up to 286,000 jobs over the next nine years, with 59 percent of job losses coming from small- and medium-sized businesses.
Seniors will face higher premiums and fewer benefits. The Health Insurance Tax on certain Medicare Advantage plans and Medicare Part D prescription drug coverage, both popular and affordable choices among seniors, will reach a combined $34 billion. According to a study by the consulting firm Oliver Wyman, America's seniors should expect to pay up to $20 per month in increased premiums this year alone, with rates doubling over the next decade.
Finally, state Medicaid programs serving our nation's most vulnerable citizens will be jeopardized. The Health Insurance Tax is projected to increase the cost of state managed care initiatives across the nation by nearly $15 billion, threatening access to quality health care for 30 million low-income individuals and families who depend on these programs every day.
Legislation to repeal or delay the Health Insurance Tax enjoys Republican and Democratic support in Congress. Bipartisan legislation in the U.S. House of Representatives has 222 co-sponsors — enough to pass. Now is the time for the Senate to act.
Higher health care costs, fewer jobs, more pressure on state budgets and reduced benefits. ObamaCare's Health Insurance Tax is the wrong tax at the wrong time, and Congress must stop it. New Yorkers need affordable health care and good jobs. What they don't need is another tax day.