Carriers Slam Tax Proposal

The 5-to-1 age band in the original version of the chairman’s mark already reflects compression, relative to the natural distribution of underlying health care costs across age groups, the authors of the letter write.

“If age bands are narrowed or compressed too much, premiums will rise significantly for these individuals, making coverage unaffordable, and resulting in a smaller and less stable pool, and higher premiums for everyone,” the authors write.

The proposed taxes would not apply to employers providing coverage on a self-insured basis, according to Joint Tax Committee staffers who conducted a “walk through” of the latest version of the draft Tuesday. That would lead more employers to self-insure, the authors of the insurer letter write.

“This would encourage a vicious cycle, whereby the taxes are ultimately borne by a increasingly narrow group of consumers, including those purchasing coverage through the exchange,” the authors of the letter write.

If the proposed taxes were enacted and implemented, they “would undermine the shared goals of achieving universal coverage and improving the affordability and quality of healthcare for the uninsured and for those currently with coverage,” the authors of the letter write.

The new taxes would “likely be borne principally by those obtaining individual coverage in the exchange and by small businesses,” the authors of the letter write. “These new taxes, coupled with other provisions in the chairman’s mark, would make coverage less affordable to consumers.”

Proposed new taxes on drugs and medical devices would increase underlying medical costs, and those costs also would be shifted to health plans and consumers, the authors of the letter write.

We tweet about health reform at http://twitter.com/ReformWatch

We also have started a health reform newsletter. You can sign up for it at http://www.lifeandhealthinsurancenews.com/HCRW/Pages/default.aspx