President Obama’s health care law took effect three years ago. Since then, Americans have watched their health insurance premiums continue to rise. Now, they’re about to get hit again unless Congress repeals one of ObamaCare’s most expensive tax increases.
The president’s health care law included more than $1 trillion worth of tax hikes. One of those is the health insurance tax, also referred to as the “HIT.”
Washington will start charging the tax next January – almost four years after the bill became law. This new tax is another example of how President Obama and Democrats in Congress designed for the painful parts of the law to kick in years later.
Over the next 10 years, this tax will amount to $102 billion.
While insurance companies are responsible for paying the tax, it’s clear that they will pass most of the expense on to their customers.
This massive health insurance tax, like the rest of the health care law, is completely flawed. For example, the cost of the tax stays the same – regardless of how many companies and people have to pay it. While larger businesses may be able to avoid the tax by self-insuring, the remaining customers will have to pay more each. The tax will fall most heavily on those least able to afford it: small businesses and self-employed people.
Faced with higher health insurance costs, many businesses will push more of the costs to their employees. According to one estimate, families who get insurance through a small employer will see their take-home pay cut by about $5,000 over the next decade because of the new health insurance tax.
Sharing the costs won’t be enough for many businesses. They will be faced with a difficult choice: they can either trim staff or avoid hiring. The National Federation of Independent Business estimates the tax will force the private sector to cut between 146,000 and 262,000 jobs by 2022.
Twenty-three million Americans are either out of work today or working less than they’d like. The last thing we need is a tax that forces more layoffs. The Federal Reserve understands, even if the White House does not. The Fed’s latest “Beige Book” cited the president’s health care law as one reason for persistently high unemployment.
I hear the same when I talk with people back home in Wyoming, and when I travel around the country. Small business owners tell me they want to grow, expand and succeed. They also tell me about the ways Washington is holding them back. The president’s health care law is at the top of their list.
How can they grow their businesses when they don’t know how the law’s 20,000 pages of new red tape will affect them? How can they hire more workers when they can’t predict how much they will have to pay for the mandated insurance and all the new taxes?
The president’s health care law was a bad idea that will only get worse in the years ahead. As the law is implemented, Americans will understand how it makes it harder for them to get the care they need, from a doctor they choose, at a lower cost.
The best solution is to repeal this law entirely and start over with real reforms so that America’s health care system will continue to be the best in the world.
Until that happens, we can fight for legislation that improves the lives of the American people. This week, Senator Orrin Hatch and I introduced the Jobs and Premium Protection Act to repeal this health insurance tax before it can do more damage.
Washington needs to focus on helping small businesses grow, not burdening them with new taxes. It’s time to eliminate this bad policy that will make it harder for people to afford health insurance and cost thousands of Americans their jobs.
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