Tax increases are on the way, and these don’t center around the fiscal cliff. The Affordable Care Act (ACA) is set to be implemented in the next few years with billions in taxes on health insurance on the horizon. A new report released by the Oliver Wyman firm found that$8 billion in 2014, growing to $14.3 billion in 2018 and increasing with inflation thereafter – that will lead to higher health insurance premiums for individuals and employers as well as up to a quarter of a million lost jobs.
The new report laying out the impact on businesses and consumers projects that the average employee-only premium in the fully insured small group market will increase by nearly $2,800 between 2014 and 2023, and family premiums will increase an average of $6,800 over the same time period. Consumers in some States will see even higher premium increases: the report estimates that the per-family premium impact of the tax will be $9,221 in West Virginia, $9,046 in New York, and $7,895 in Massachusetts.
The report is the latest in a series of studies showcasing the negative impacts of the Health Insurance Tax. The National Federation of Independent Business has estimated that the increased cost of employer-sponsored health insurance will reduce private sector employment by as much as 249,000 jobs and reduce real GDP by up to $36 billion by 2021. The Joint Committee on Taxation has also estimated that “a very large portion” of the tax will “be borne by consumers” in the form of a 2 to 2.5 percent increase in premium cost by 2016.
Manufacturers have traditionally provided comprehensive benefits to their employees – but these benefits are now at risk. Reducing the cost of health care must be a primary focus and the health insurance tax in the ACA does the exact opposite of that, all while threatening to reduce jobs. Congress should repeal the tax to help make health care coverage more affordable for our country’s employers and consumers and help more Americans get back to work.