April 8, 2015 —

$145 Billion Tax Raising Health Care Costs For Texas Families

AUSTIN—The Texas Association of Health Plans (TAHP) today issued the following statement in support of HCR 89 by State Rep. Dade Phelan (TX-21), which urges the U.S. Congress to approve legislation fully repealing the health insurance fee (HIT) included in the Affordable Care Act. HCR 89 is being considered today by the Texas House Committee on State & Federal Power & Responsibility.

The HIT is a $145 billion tax on health insurance. The tax started at $8 billion in 2014, increased by 40 percent in 2015, and will nearly double over the course of four years to $14.3 billion in 2018. The non-partisan Congressional Budget Office (CBO) has confirmed that the HIT will translate into higher health care costs for consumers, stating that it will be “largely passed through to consumers in the form of higher premiums for private coverage.”

Bipartisan legislation to repeal the HIT has been introduced in the U.S. House of Representatives by Rep. Charles Boustany (R-LA) and Kyrsten Sinema (D-AZ) and recently achieved support from a majority of representatives (218). In the Senate, the Jobs and Premium Protection Act, introduced by Sen. Orrin Hatch (UT) and Sen. John Barrasso, would fully repeal the health insurance tax.

“As health care costs continue to climb, the last thing Texans need is a $145 billion health care tax that translates into higher premiums for themselves and their families. The effort to win full repeal of this onerous tax is gaining steam in Congress as more and more leaders on both sides of the aisle realize its harmful impact on families across the country, on small businesses, job creation and our economy,” said TAHP CEO Jamie Dudensing. “TAHP supports Rep. Phelan’s HCR 89, which sends a united message from the Texas Legislature to the U.S. Congress to swiftly approve full repeal of the HIT.”

Impact of the HIT on Texans

According to analysis by the actuarial firm Oliver Wyman, the HIT will:

  • Impose a $7 billion fee on Texans over 10 years.
  • Cut future private sector employment in Texas by 14,500 jobs by 2023.
  • Result in $2.5 billion in Texas small business sales losses by 2023.
  • Increase premiums for individual Texans by up to $2,639 over 10 years.
  • Increase Texas family premiums by up to $7,506 over 10 years.
  • Increase Medicare Advantage plans for seniors by an average of $4,033, coupled with reduced benefits, over 10 years.
  • Increase Medicaid health plans by 41,346 over 10 years.

The Texas Association of Health Plans

The Texas Association of Health Plans (TAHP) is the statewide trade association representing private health insurers, health maintenance organizations, and other related health care entities operating in Texas. Our members provide health and supplemental benefits to Texans through employer-sponsored coverage, the individual insurance market, and public programs such as Medicare and Medicaid. TAHP advocates for public and private health care solutions that improve the affordability, access and accountability of health care for many Texans. As the voice for health plans in Texas, TAHP strives to increase public awareness about our members’ services, health care delivery benefits and contributions to communities throughout the state.