When even supporters of federal health care reform use phrases like “train wreck” to describe what is coming, business owners in Texas and beyond have reason to be nervous. The promises of the Affordable Care Act continue to fall far short of reality.
Yet, there's some good news: a growing chorus of bipartisan lawmakers supports the repeal of one of the act's costliest, most misguided requirements: the $100 billion Health Insurance Tax, or HIT.
The HIT, if fully implemented, will cost hundreds of thousands of jobs, increase health care costs, and hurt virtually all Texans. By the most recent count, 218 members of the U.S. House of Representatives are cosponsoring a bipartisan bill to repeal the HIT. The measure now has enough support to pass.
As the leader of the state's business and chamber organization, this is welcome news. The HIT is a punch in our economic gut none of us — businesses or consumers — can afford. And, lawmakers are finally listening.
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The HIT is supposed to help pay for federal health care reform. Supporters call it a tax on health insurance companies, but this tax will be passed on to consumers and businesses through higher premiums for their own health insurance. If Washington doesn't repeal the Health Insurance Tax, this unconscionable burden will fall on small businesses and families — the very people who should be helped by health care reform. One study estimates the HIT will cost up to 250,000 jobs over the next eight years as businesses try to cope with the increased cost of insuring their employees. In Texas, the pain will be felt by the 353,000 small businesses that operate here and the 2.9 million Texans who work for them. The non-partisan Congressional Budget Office stated, “Fees would largely be passed through to consumers in the form of higher premiums for private coverage.”
That pinch is an expected increase of at least $2,800 over the next 10 years for individuals and an extra $5,000 for families.
In Texas, where we are committed to creating jobs and building a strong, diverse economy, this measure flies in the face of everything we have worked hard to build. If we don't repeal the Health Insurance Tax, quality of care and access to care will decline, as businesses become saddled with increased costs, consumers see higher premiums, and insurers shift to lower-cost and ineffective models for delivery of health care.
The HIT in federal health care reform is not the right approach. Let's focus on providing states the flexibility to reshape Medicaid to better serve our citizens, and to empower state leaders to develop innovative solutions for access and delivery of services. We need to keep up the pressure on Washington. The message is simple: American business and families cannot take the HIT.
