About the HIT
What is the HIT?
The Health Insurance Tax—or HIT—is a multi-billion dollar tax imposed on health insurance premiums, making health care less affordable for those most in need of relief.
Who Gets HIT?
The HIT targets those who can least afford to pay, like small businesses that purchase health coverage for their employees and seniors and low-income individuals and families who rely on Medicare and Medicaid. This tax hurts Americans across the board, but is particularly harmful for:
- Small Businesses
- Poor & Middle Income Families
- Medicare and Medicaid Beneficiaries
- Young workers struggling to afford health insurance
How Hard Does It HIT?
It’s estimated that working families will pay an additional $5,000 in higher premiums over the next decade. Moreover, young workers, including 26 year olds transitioning off their parents’ policies, are hit with the tax just as they are struggling to make it on their own.
Workers and their families will forego access to programs to improve care quality and lower costs, such as wellness initiatives and disease management tools, as employers are forced to make cuts to investments in health programs.
Facing a premium increase of approximately $5,000 over the next decade, small businesses are being forced to decide between creating jobs or providing health coverage to their employees.
Poor & Middle Class
Nearly half of the entire HIT tax is paid by those with incomes between $10,000 – $50,000, making this a truly regressive tax. Only a small fraction of the tax will be felt by the most affluent.
Medicare Advantage coverage will increase by $3,590 per beneficiary over 10 years due to the HIT, which is resulting in seniors facing upward pressures on premiums and reductions in benefits.
State budgets are facing tremendous pressure as the HIT increases the cost of providing Medicaid health plans by $1,530 per enrollee over 10 years, making it more difficult for
states to provide safety-net coverage to the most vulnerable citizens.
Common Sense, Bipartisan Reform
At the end of 2015, over 100 Democrats joined with nearly 300 Republicans to provide relief from the HIT for one year (2017). This is projected to save $270 on average per small business worker.
Pulling the Rug Out
Since the cost of the HIT increases year-over-year, Americans will see temporary relief in 2017 only to face an even higher HIT impact on premiums in 2018. Providing relief from the HIT is a welcome and critical first step, but Americans need the certainty of full repeal.