Delay of ACA tax could hand health insurers a victory

The potential one-year delay of an Affordable Care Act tax could prevent health insurers from paying several billions of dollars annually to the U.S. government in 2017 and 2018, Morning Consult reports.

The tax on health insurers, which is also known as HIT, was included in the ACA to help pay for expanded coverage of individuals. Passing or delaying the tax has its pros and cons for the industry, but some are pushing to delay the tax and add a provision that would prevent taxpayer dollars from being used to help insurers recoup their losses on the public exchanges through the risk corridor program. 

Sen. Marco Rubio (R-Fla.) has been involved in the push to limit risk-corridor payments, saying "the American taxpayer should not be spending $2.5 billion to bail out a private insurance company."

However, the article points out that the cost of a one-year pause on the ACA's health insurer tax far outweighs the $2.5 billion that the government kept by paying only a portion of what it owed to insurers in risk corridor payments. Delaying the tax in 2017 would cost $12 billion, and in 2018, that figure jumps to $12.5 billion, the article stated.

Additionally, a suspension of the tax could help reduce the cost of insurance across the board, since the total amount is paid by individual insurers based on their market share, according to the article.

As part of the tax "extenders" deal currently in negotiation, Congress also is likely to include include a two-year delay on the Cadillac tax and the medical device tax.

To learn more:
- here is the Morning Consult article

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