A controversial new fee on health insurance providers that was part of the Affordable Care Act was introduced into the Federal Register Monday.
While the Internal Revenue Service is expecting to raise tens of billions of dollars from the fee, industry groups have harshly criticized the move, warning the fee will be passed on to the consumer.
“This is a new $100 billion tax on health insurance,” a spokesman for America’s Health Insurance Plans (AHIP), the leading the insurance industry trade group, told The Hill. “Taxing health insurance is only going to make it more expensive.”
AHIP blasted the tax, which is expected to exceed $100 billion over the next decade, for hitting families still struggling through a weak economy.
“The group estimates that an average family’s health insurance would rise by more than $300 next year, with that total surpassing $500 in subsequent years,” The Hill reported.
The Treasury Department maintains that the fee, when looked at in the entirety of the health care law, will work to increase competition and drive down costs. The added demand of new customers will also aid in competition and keeping costs down, the department claims.
The spokesperson at the Treasury Department pointed to the Congressional Budget Office’s estimates that suggest the Affordable Care Act could reduce premiums for small group and individual plans, while having virtually no effect on large plans.
Meanwhile, a bipartisan group of lawmakers has introduced a bill to repeal this portion of the Affordable Care Act. The Stop the HIT coalition, a group of small business owners and employees, argues the health insurance tax will hurt small businesses, the “nation’s greatest source of job creation,” and the self-insured.
“Small businesses are already an underdog, and simply taxing them more will do nothing to grow the economy,” Sheila Ogle, Owner and CEO of The Matthews House, said in a statement. “In fact, it will have the opposite effect by stifling my ability to expand my business and hire new employees from my community.”
Last week, a report from the Government Accountability Office revealed that despite repeated promises by the president and Democratic leaders, Obamacare is not paid for and “will take a .7 percent bite out of GDP over a 75-year period, amounting to $6.2 trillion in deficits,” The Daily Caller reported. (RELATED: Obama’s promise falls short)
“The big-government crowd in Washington manipulated the numbers in order get the financial score they wanted, in order to get their bill passed and to increase power and influence,” Alabama Republican Sen. Jeff Sessions said in a hearing last week.
The rule has a 90-day comment period.
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