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Man handing over money Insurers argue that the health insurance tax that would require them to pay more than $260 billion to the government over 10 years, compelling them to raise premiums. (Photo: Shutterstock)

House Democrats and Republicans have teamed up on a bill that would postpone the health insurance tax from taking effect until after 2021. Joining them are representatives Ami Bera, D-CA, Josh Gottheimer, D-NJ, Jackie Walorski, R-IN and Kenny Marchant, R-TX, who have cosponsored a bill similar to a bipartisan effort in the Senate to do the same thing—put off the $16 billion tax on health insurance companies.

Healthpayer Intelligence cites a 2018 analysis by Oliver Wyman that was commissioned by UnitedHealth Group that finds that “[t]he taxes on health insurance are nondeductible for federal tax purposes for health insurers.” According to the analysis, for each dollar paid in taxes, requires more than an additional dollar in premiums be collected (for example, $1.54 for every $1.00 in taxes, assuming a 35 percent federal corporate income tax rate). The resulting impact on premiums would be as much as $22 billion.

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Marlene Satter

Marlene Y. Satter has worked in and written about the financial industry for decades.

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