Likely Return of the Health Insurance Tax to Impact MA Profits

Congress appears unlikely to delay the health insurance tax next year. If that happens, Medicare Advantage plans would see the biggest impact, analysts and insurers say.

On Wednesday, a bipartisan group of House lawmakers introduced a suspension of the tax, known as the HIT, through 2021. The tax was in place for 2018, suspended in 2019 and is due to take effect again in 2020.

But as House lawmakers unrolled their proposal for another delay, senior congressional staff from both chambers and parties said they don’t think it’s likely to move before insurers start setting their ACA exchange rates next year.

One senior GOP aide said it’s unclear how any of the smaller tax delays will get done, “let alone the big spendy healthcare extenders.”


Some insurance executives have been bracing for the possibility they won’t get their delay. But they also haven’t given up on urging Congress to step in and eliminate the tax or continue the moratorium from 2019.

In a quarterly earnings call in January, UnitedHealth Group CEO David Wichmann warned that the return of the HIT would increase healthcare costs by a total $20 billion for 142 million people.

“That causes the average senior couple to see their premiums raised by $500 per year and for families with small business coverage by about the same amount, around $480 or so per year,” Wichmann said. “Our view is that outcome is unacceptable because healthcare already costs too much.”

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Original Article on Modern Healthcare