Insurance industry licks its chops at possible 3rd delay of health insurance tax

Congress' House of Representatives
Industry licks its chops at possible third delay of health insurance tax. (House Committee on Appropriations)

A group of bipartisan lawmakers is seeking to once again delay the health insurance tax, this time until 2021. And the insurance industry is already licking its chops. 

The measure (H.R. 5963), co-sponsored by Reps. Kristi Noem and Jackie Walorski, Republicans, as well as Democrats Krysten Sinema and Ami Bera, would be the third such delay of the Obama-era tax.

Insurers lost about $8 billion (PDF) in 2014 under the law, which jumped to $11 billion the following year. The provision was suspended in 2017, in place for 2018, but then delayed again for 2019.

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The federal government, meanwhile, lost $14 billion (PDF) in revenue in 2017 due to the delay. The Joint Committee on Taxation estimates delaying the tax will cost the government more than $31 billion over 10 years

The conservative Heritage Foundation has said the tax increases ACA exchange premiums by up to 3%. The Kaiser Family Foundation estimated a similar amount, as did a 2017 analysis commissioned by UnitedHealth. 

RELATED: Trump administration policies could account for $1,000 average increase in ACA premiums

If the tax is brought back as scheduled in 2020, it could be snowballed into other rate increases as a result of the administrative and congressional action. 

America's Health Insurance Plans was quick to jump on the legislation, urging passage.

“Americans have been calling for more affordable coverage and care, and this bill delivers for them," the group said in a statement. "Suspending the Health Insurance Tax will help to lower premiums for everyone, whether they get coverage through their jobs, buy their own coverage, or enroll in Medicare Advantage or Medicaid."

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