With big-picture health care reform off the table in Washington, there is an immediate need to stabilize faltering health insurance markets and keep premiums from rising out of control. This issue is urgent for Knoxville residents. Since Humana bowed out, we are in great danger of having no insurers willing to offer plans to small businesses and individuals in our area.
Many solutions are gaining traction with lawmakers, but one of the most important will be the elimination of the Health Insurance Tax. Tennessee’s U.S. Sen. Lamar Alexander, who was a co-sponsor of legislation to repeal the HIT in 2015, will hold hearings in September on health care. We certainly encourage him to either look at repeal legislation or ensure that a delay of this tax makes it into any stabilization bill coming out of his committee.
Right now, no one is paying the Health Insurance Tax because 400 Republicans and Democrats came together to put it on hold for 2017. We need this type of bipartisan cooperation once again.
The broadly supported HIT suspension expires on Dec. 31, and health insurance will once again become subject to a large government surcharge passed through to consumers and businesses.
Unfortunately, Congress doesn’t even have until the end of the year to fix the problem. Insurance companies are setting their premiums right now. Without action from our elected leaders, rates in the fully insured market where individuals and most small businesses purchase coverage will go up about $500 per family. Rates for Medicare Advantage, a resource for seniors and disabled individuals, will increase $245 per person. And even Medicaid, our program for disadvantaged families and children, will be $181 more expensive for those using managed care plans.
These premium hikes would fall on top of any other market-driven rate increases, which in some states could be 20 percent or more over this year’s pricing. That means health insurance, which consumers and businesses already find too expensive, will become truly unaffordable for too many Americans.
This will have predictable effects. As prices rise, more employers, especially Tennessee’s 500,000 small businesses, will stop offering employees a health plan. More individuals will find themselves priced out of the market as well, and they will discontinue their insurance so they can pay other bills. This could cause cascading problems with health insurance premiums if younger, healthier individuals disproportionately drop out.
There are also broad economic consequences. As businesses spend more on health insurance, they will cut back elsewhere. Lower salaries and bonuses, less hiring and lackluster growth will soon follow. A report by Oliver Wyman predicts a total loss of 152,000 to 286,000 jobs within 10 years.
Although there are other pressing issues to be addressed, including subsidies that help insurers cover high-cost patients, delaying the Health Insurance Tax is one of the easiest changes Congress could make to save Americans money on health insurance. Bipartisan support also makes it one of the most likely to pass.
Together these factors should drive HIT relief to the top of Alexander’s list and to the floor of Congress, where his colleagues should give it a “yes” vote.
Date:Aug 27, 2017