Brief Reaction to “Spending Bill Would Repeal Up To Three Obamacare Taxes” from Forbes

According to a recent article by Forbes, the congressional 2020 spending bill will include three additional repeals to the Affordable Care Act, after the repeal of the individual mandate earlier this year. These repeals are for the so called “Cadillac tax” for high cost health insurance plans that employers had to pay 40 percent taxes on but suspended since 2015; a 2.3 percent excise tax on medical devices that has been in moratorium since 2015; and the health insurance tax (HIT tax) that was an excise tax on health insurers and suspended since 2017.

The implications of these repeals on the U.S. healthcare system and Affordable Care Act will be dramatic. Nobody likes taxes, but we can all agree that it is a necessary evil when funding government and state programs that effect all of us. The real question is, what will these repeals do? The “Cadillac tax” had the initial purpose of discouraging employers from partaking in high cost insurance plans that would cost more than twice as much for ”premium” healthcare than normal healthcare. What’s good for the goose is good for the gander. Healthcare that comes at a premium for some, encourages hospitals and HCPs to charge an excess for services that may otherwise be routine. Since the tax’s suspension due to pushback from unions, health insurance premiums and out of pocket costs have only gone up all across the board.

Excise taxes on medical device manufacturers are taxes that will be pushed down to the patient so this makes no sense. Economically, this 2.3 percent tax may be used to continuously fund the ACA’s services, but since its moratorium there have been no complaints from patients or providers. Kill the tax.

The HIT tax taxes health insurance providers, which is effectively a sales tax. This also does not make much sense, because health insurance sales should be taxed like most professional services, not like products. Kill this tax too.

If the current spending bill is approved by Congress, none of these taxes will ever be implemented in 2020 or the foreseeable future. The Affordable Care Act, aka ObamaCare, has many parts to it that are still important and protects patients from excess healthcare costs. By gradually dismantling it one policy at a time, what will we be left with? I for one do not want to live in the world pre-ACA where health insurance was unattainable for most of the middle class and an unforeseen medical event could lead to financial ruin.

Sources

https://www.forbes.com/sites/kellyphillipserb/2019/12/16/spending-bill-would-repeal-up-to-three-obamacare-taxes/