More than half of House members cosponsor bill to repeal premium tax

From: Humana Health Reform News
A majority of House members have now signed on as cosponsors of legislation to repeal a provision of the health reform law important to the health insurance industry: the premium tax. The premium tax is set to go into effect in 2014. Its purpose is to help pay for reforms that improve access to health care coverage, including subsidies for people below a certain income level to buy insurance, and the expansion of the Medicaid program. The tax will contribute $8 billion to the costs of health reform when it goes into effect in 2014, will rise to $14.3 billion by 2018, and thereafter will increase annually based on premium growth.

But as studies by the Congressional Budget Office (CBO) and the Joint Committee on Taxation have shown, this tax on the health insurance industry will result in the opposite of what the reform law intended – it will increase the cost of health insurance rather than cut costs or slow cost growth. As the CBO wrote, the tax "would be largely passed through to consumers in the form of higher premiums for private coverage."

Of course, even if the Republican-led House votes to repeal the tax, the legislation is unlikely to become law as long as Democrats control the Senate and President Obama remains in office.