As voters head to the polls on Super Tuesday, one of the most harmful issues facing Main Street—the multibillion-dollar annual tax on health insurance premiums—needs to be a consistent part of the broader dialogue on healthcare affordability.
The Health Insurance Tax (HIT) takes aim at small businesses, seniors and poor and middle-income Americans by imposing a tax on health insurance premiums. Ironically, the HIT was included as part of President Obama’s health reform package as a way to pay for the expansion of health coverage, yet it has only made health care less affordable for those most in need of relief.
With both taxes and health care being such hot-button issues on the campaign trail, it’s hard to understand why more candidates aren’t talking about the need to repeal the HIT. After all:
- The HIT is a regressive tax, inflicting the most harm on those least able to afford it: middle and low income Americans, including those on Medicaid and Medicare. Indeed, it’s estimated that approximately half of the health care premium increase will fall on those with yearly incomes between $10,000-$50,000.
- Additionally, the HIT impacts 26 year olds transitioning off their parents’ policies and those that lose their coverage when the small business where they’re employed can no longer afford to provide healthcare.
- The tax also places a drag on small business hiring—America’s engine of economic growth—forcing owners to decide between increasing their workforce or being able to provide health insurance to their employees. Estimates show that the HIT could reduce private sector job creation by as much as 249,000 workers.
This is one of the unusual areas where both Republicans and Democrats can agree. In fact, at the end of 2015, over 100 Democrats joined forces with nearly 300 Republicans in voting to delay the impact of the HIT tax by a year. A one-year delay is far from the total repeal that is needed, but it is a start.
The next President has an opportunity to finish the job and lead the effort for repeal. Whatever a candidate’s position on President Obama’s health plan, there is no reason not to speak directly to voters’ pocketbook concerns and pledge to repeal this tax.
The 12 states with a primary or caucus on Super Tuesday are home to over 7.3 million small businesses that employ nearly 14 million Americans. Every single one of them—plus millions of other Americans young and old—are paying this tax. Americans want results and the candidate who gives it to them improves his or her chance of winning the nomination. Taking a vocal stand on a misguided and harmful tax that hits the middle class right in the wallet is certainly a good start.
Breakdown of the HIT Impact on Super Tuesday States
| State | # of Small Businesses | # of Small Business Employees | Most Impacted Industries |
| Alabama | 393,400 | 757,475 | -Manufacturing
-Retail Trade -Health Care & Social Assistance
|
| Alaska | 69,201 | 134,485 | -Health Care & Social Assistance
-Retail Trade -Accommodation & Food Services
|
| Arkansas | 242,036 | 482,849 | -Manufacturing
-Health Care & Social Assistance -Retail Trade
|
| Colorado | 556,586 | 962,232 | -Retail Trade
-Health Care & Social Assistance -Accommodation & Food Services
|
| Georgia | 950,532 | 1,479,081 | -Retail Trade
-Health Care & Social Assistance -Manufacturing
|
| Massachusetts | 613,264 | 1,369,448 | -Health Care & Social Assistance
-Retail Trade -Accommodation & Food Services
|
| Minnesota | 501,551 | 1,173,793 | -Health Care & Social Assistance
-Manufacturing -Retail Trade
|
| Oklahoma | 334,930 | 675,890 | -Health Care & Social Assistance
-Retail Trade -Manufacturing
|
| Tennessee | 566,578 | 1,017,917 | -Manufacturing
-Health Care & Social Assistance -Retail Trade
|
| Texas | 2,366,053 | 4,119,801 | -Health Care & Social Assistance
-Retail Trade -Administration, Support, Waste Management, Remedial Services
|
| Vermont | 77,726 | 156,760 | -Health Care & Social Assistance
-Retail Trade -Manufacturing
|
| Virginia | 664,665 | 1,431,801 | -Retail Trade
-Professional, Scientific & Technical Services -Health Care & Social Assistance
|
| Total | 7,336,522 | 13,761,532 |