MA in the News
June 6, 2019

Senate Finance Adds Health Insurance Tax To List Of Fees It Is Tackling

A Senate Finance Committee task force has added the Affordable Care Act’s health insurance tax to the list of health fees for which it is seeking a permanent fix, a Senate staffer confirmed. The annual health insurance tax was put off for 2019 but is set to go back into effect in 2020, and insurers have been lobbying for years to get the tax repealed. Insurers were livid when Finance unveiled the health task force several weeks ago along with an agenda that included the ACA’s controversial device tax but made no mention of the insurance tax.

The insurance tax was inadvertently left off the tax force’s initial agenda announced May 16, the aide said. The initial agenda included the medical device tax, the medical tax deduction and several other assessments.

Bipartisan groups of lawmakers in the House and Senate have introduced legislation to delay the fee through 2021.

“The health insurance tax (HIT) is a $100 billion+ sales tax that hits nearly everyone, increasing the cost of health coverage for individuals, small businesses, seniors, states, and taxpayers. That’s why we continue to advocate for the elimination of this tax that harms American families. Congress can still act to protect Americans from this tax in 2020 and beyond,” America’s Health Insurance Plans said in a statement.

The fee applies to nearly all health issuers, including Medicaid managed care and Medicare Advantage plans, and is apportioned based on market-share. It was slated to bring in $8 billion in 2014, and to bring in $14.3 billion in 2018, and it was indexed to premium growth post-2018. However, Congress paused the tax in 2017 and then again for 2019.

The health task force is one of several set up by the Senate Finance Committee to look at temporary tax provisions and delays of taxes that expired or will expire between Dec. 31, 2017 and Dec. 31, 2019. The task forces are charged with finding solutions that would offer long-term certainty.

“Extending tax incentives for a year or two at a time is no way to craft public policy. The Finance Committee’s task forces are working to develop permanent solutions to these vexing tax issues,” ranking Finance Democrat Ron Wyden (OR) said in announcing the task forces.

“The alternative is continued uncertainty or an even worse outcome,” Finance Chair Chuck Grassley (R-IA) added. — Amy Lotven (

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