By Ashley Corr
With a presidential election on the horizon, everyone seems to be talking about health care. But beyond future and idealistic policy proposals, there are issues working through the halls of Congress that could immediately better the affordability of health care for years to come. Virginians with private insurance plans, including seniors with Medicare Advantage, need Congress to act right away to protect them from higher costs as a result of the health insurance tax.
The health insurance tax — appropriately known as the “HIT” — packs a wallop for Americans who rely on private health plans. This tax is estimated to raise the cost of their health coverage by hundreds of dollars per beneficiary — this despite the fact that so many beneficiaries survive on fixed incomes and are already stretching every dollar.
As president of the Virginia Association of Health Underwriters (VAHU), I oversee an organization representing more than 300-plus members in the commonwealth, who implement plans for health care benefits to more than 1 million Virginians. The VAHU advocates for a free-market solution for the delivery of health care, health care financing and health-related services and coverage, including health insurance, long-term care insurance and disability coverage.
The Virginia health insurance market currently supports a robust selection of health insurance and Medicare Advantage plans. VAHU members help consumers and seniors alike choose from a variety of no-premium and low-premium options to find the right combination of coverage, provider network and benefits to fit their individual situations.
More than 22 million seniors across the country, including more than 300,000 in Virginia alone, enjoy the convenience of Medicare Advantage and its financial protections, including low co-pays for medical services and a cap on their annual out-of-pocket expenses. But as premiums inevitably rise as a result of the HIT, the choice of plans available within a given senior’s budget could diminish.
Many Virginians, not just seniors but both individuals and employers alike, could soon find themselves unable to afford the health plan that has been working well for them or their business, and switching plans could have unfortunate consequences, including changing doctors or dealing with a different drug formulary that doesn’t include the medications they take.
While the HIT is cloaked as a fee, it is a tax on insurance providers that will undoubtedly be passed on to small businesses, their employees and the self-employed. The Congressional Budget Office (CBO) has confirmed this, stating that the HIT “would be largely passed through to consumers [small and family-owned businesses] in the form of higher premiums for private coverage.”
Increasing the cost of health insurance plans for small business owners and the self-employed makes offering affordable coverage, or any coverage at all, to employees more difficult. In fact, former CBO Director Douglas Holtz-Eakin estimates the average impact to be as much as a 3% (or $5,000) increase in premiums for a family of four over ten years.
If you can’t afford this increase, then a loss of health plan benefits could ensue. Higher premiums could force consumers to downgrade their plans, foregoing crucial benefits that so many depend on, in an effort to reduce premiums and out-of-pocket costs.
As the saying goes, prevention is worth a pound of cure. The best way to protect the health and financial well-being of our citizens and to control U.S. health care spending is to prevent the HIT from placing quality health care out of reach for so many Virginians. Surely, lawmakers will agree now that these goals are worth fighting for, no matter the partisan background noise in our nation’s capital.