Health insurance tax repeal gaining traction

In comments submitted to the House Ways and Means Committee Work Groups in April, AHIP wrote the “tax will be particularly painful for vulnerable populations, including consumers who buy coverage on their own, small business owners who struggle to provide coverage to their employees, seniors who rely on the Medicare Advantage program as a health care safety net, and low-income people who are served by state Medicaid programs.”

Small business groups also have been fighting back against the tax, arguing it will kill thousands of private-sector jobs.

A study by the National Federation of Independent Business suggested that the health care tax could reduce private-sector employment by several hundred thousand jobs over the next decade, more than half of which would come from small businesses.

But in testimony last month Paul Van de Water, an economist with the Center on Budget and Policy Priorities, said that those claims that the tax will kill jobs were “unfounded.”

“CBO foresees a small net reduction in labor supply, primarily because some people who now work mainly to obtain health insurance will choose to retire earlier or work somewhat less, not because employers will eliminate jobs,” he said.

The bottom line, the administration has argued, is that the tax is needed to help pay for the law.

“The health insurance tax forms part of a carefully thought-out structure to expand health insurance coverage and slow the growth of health care costs without adding to the budget deficit,” Van de Water said. ”Any effort to modify or repeal this tax must not undercut any of these critical objectives.”

See also:

• 15 PPACA provisions that will take effect in 2014
• How to navigate health care tax breaks