Axne, Bipartisan House Freshmen Push Democratic Leadership to Delay Health Insurance Tax

WASHINGTON, Nov. 7 -- Rep. Cynthia Axne, D-Iowa, issued the following news release:

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- A tax on health insurance is scheduled to go into effect in 2020

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U.S. Rep. Cindy Axne (IA-03), along with 50 bipartisan new members of the House of Representatives, sent a letter regarding their concerns about the Health Insurance Tax (HIT). The tax, which is scheduled to go into effect for 2020 and 2021, would increase health insurance premiums for families, seniors, and state Medicaid markets. The letter was sent to House Republican and Democratic leadership, including Speaker Pelosi, Minority Leader McCarthy, the House Committee on Energy and Commerce, and the House Committee on Ways and Means.

"At a time when approximately 40% of Americans would struggle to cover an unexpected expense of $400, and many seniors live on fixed incomes, this tax would add an unnecessary financial burden for millions of Americans," the letter stated.

Without Congressional action, the tax is scheduled to go into effect on January 1, 2020 and could impact as many as 142 million Americans using marketplace health insurance.

"Without delaying this tax, hardworking Iowa families could see higher health care costs," said Rep. Axne. "Repealing this tax ensures Iowa seniors and working families aren't paying the price for Washington dysfunction. I will continue to work with Democrats and Republicans in order to find bipartisan solutions to lower the cost of care."

Rep. Axne continues to fight for better health care as a Member of the Affordable and Accessible Health Care Task Force and the Blue Collar Caucus, a working group focused on the needs of workers and middle class families. Rep. Axne co-sponsored legislation to repeal the HIT and voted to pass the Middle Class Health Benefits Tax Repeal Act of 2019 in July, which would permanently repeal the "Cadillac Tax" on certain employer-sponsored plans. Rep. Axne has introduced legislation that would protect Iowans from surprise bills, supports legislation to increase and expand Medicare services, and announced her support of H.R. 3 - Lower Drug Prices Now Act.

The text of the letter can be found here (https://www.scribd.com/document/433883907/2019-11-1-Letter-to-House-Leadership-HIT-Tax-Delay-2) and below:

Dear Speaker Pelosi and Leader McCarthy,

As new members of the U.S. House of Representatives, we write to request quick action to address health care affordability. Rising health care costs remain a primary concern for American families and small businesses, a message we hear frequently in our districts.

One way to immediately address these concerns and demonstrate our bipartisan commitment to lower health care costs is to prevent the return of the Health Insurance Tax (HIT) for 2020 and 2021 - thereby lowering health insurance premiums for consumers and protecting nearly half of all Americans from higher health care costs. We respectfully request your consideration of a delay of the HIT in appropriate legislation that will become law before the end of the year.

Congress has previously come together on a bipartisan basis to address this important issue, most recently by including a suspension of the tax for 2019 in a continuing resolution that was signed into law last year. A suspension of the HIT was enacted because there is broad recognition that the tax increases health care costs for consumers. Absent further Congressional action this year to delay the tax, the HIT will return, impacting approximately 142 million Americans.

According to an Oliver Wyman analysis, reinstatement of the HIT in 2020 would result in a premium increase of $479 for families with small group coverage and $458 for families with fully insured large group coverage. Additionally, seniors enrolled in Medicare Advantage would see higher premiums, an average $241 increase for nearly 22 million seniors in Medicare Advantage plans. Consumers in the individual market and state Medicaid programs would also be impacted, seeing an estimated increase in premiums by $196 and $157 respectively. At a time when approximately 40% of Americans would struggle to cover an unexpected expense of $400, and many seniors live on fixed incomes, this tax would add an unnecessary financial burden for millions of Americans.

As Congress considers policies to bring down health care costs, acting immediately to extend a moratorium on the HIT for 2020 and beyond is a step Congress can take now to protect individuals and families, seniors, and small businesses from higher health care costs. As broader conversations on improving health care continue, we urge you to include a delay of the HIT for 2020 and 2021 in legislation that must pass before the end of the year, to deliver lower health care costs to millions of Americans across the country.

Sincerely,