Insurance Industry In Panic Over Looming Obamacare Taxes

Panicked Doctor
The insurance lobby has made a terrible mistake.

Health industry groups are pushing for a delay of massive Obamacare medical device taxes, which would drastically explode the cost of healthcare.

Stalling the taxes on both medical devices and health insurance, which were designed as a means of paying for Obamacare, has been a rare area of bipartisan co-operation as Congress seeks to delya the onset of these onerous taxes.

The previous tax waiver runs out on Jan. 1st next year. With the taxes looming, health insurers, medical device companies, and other stockholders are pushing in to make sure they aren’t slammed.

Delays of these taxes, either for one or two years, could be attached to a larger legislation moving through Congress at the end of 2017.

An industry source had said that the lawmakers have told them that the tax delays would be attached to a bill to continue expiring Medicare programs, known as the “extenders,” in December. The situation could change, though. The year-end spending bill is also another potential vehicle.

Greg Crist, the executive vice president for the public affairs at AdvaMed, the medical device industry trade group, said that his organization is pushing for full repeal of the device tax, but would not “turn our nose” to any short-term delay.

“We feel we’re very much in play and that is for full repeal,” Crist said. “We’re talking with staff and leadership for the right vehicle.”

Device companies further argue that the 2.3 percent tax harms job creation and innovation for the new treatments, and the return of the tax is a burden on further future plans.

“We’re looking at next generation treatments, next generation creations for 2025, not 2018; that’s why we need the certainty that comes with that,” Crist added.

Health insurers, meanwhile argue that the Health Insurance Tax (HIT), drives up the premiums. Pushing off the tax, they argue, is a way to help lower premiums and keep them low.

“We’ve been incredibly encouraged by the bipartisan response to HIT relief, and urge Congress to take immediate steps to extend the HIT suspension and delay before the tax hits small businesses and their employees in 2018,” Elena Tompkins, the executive director of Stop the HIT, a coalition of business groups, had said in a statement.

The argument against repealing these taxes is that it would erode all the sources of funding for Obamacare, especially if the cost is not offset.

House Ways and Means Chairman Kevin Brady earlier this month had confirmed that he is talking with the Democrats about a way to put off these taxes before the end of the year.

“As the Ranking Member and Members on the other side of the aisle know – we have been working with them over the past month to find a path forward,” Brady requested to consider tax reform legislation this month. “We are working on common-sense temporary and targeted relief from many of these taxes to be acted on in the House before the end of the year.”

He specifically mentioned the medical device and health insurance taxes, as well as a tax on over-the-counter medications.

Another Obamacare tax that has drawn opposition from both the sides of the aisle is the “Cadillac Tax” on generous health insurance plans.