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.
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(11) comments
If the cost for affordable coverage for Virginians is zero … we gots to charge a lot of rich folks to meet all this "deserving". Hallelujah, and period.
"We're making a heck of a lot of money., so please don't change anything. We promise to pass along any savings to our customers, cross our hearts and hope to die. Oh -- those are fingers?" [sneaky]
Ashley Corr is president of the Virginia Association of Health Underwriters and as such she is opposed to anything that interferes with what she calls “free market.” That is her job, so OK. Two comments:
1) This op-ed is the best testament to the need of universal care. She mentions the many different plans available and most likely affected by any change. Every one of these plans costs money to administer it, and that money invariably comes out of clients’ pockets and contributes to the fact that America pays significantly more per capita for health care than other moderns countries.
Two: This op-ed is a smorgasbord of quantifications and carefully worded scare tactics. “This tax is estimated to raise the cost of… coverage by hundreds of dollars per annum,” “more could diminish,” “switching plans could have unfortunate consequences,” [costs] “will undoubtedly be passed on,” “the average impact to be as much as a 3%,” “a loss of health plan benefits could ensue,” “higher premiums could force consumers to downgrade,” And her plea: “The best way to protect the health and financial well-being of our citizens…” is to let the free market continue to make great gobs of money at the expense of the easily rooked.
Rarely have I seen a better example of why we need universal health care with a one payer system.
"The MA market is very competitive compared with the individual market, so MA payers can't pass along the tax's cost to enrollees." (from the website modernhealthcare.com/insurance) Oh, they'll find a way.
Norbert Mayr - Am I misremembering or was your position that something like Medicare for all - universal basic coverage supplemented by optional additional coverage for those who were willing and able to pay for it? That is and has been my position, and I thought we were on the same page about it.
Steve, I fully agree. Basic health care coverage including dental, optical, hearing, etc. if somebody wants a Cadillac plan, there should be providers. But they don’t influence basic care, or drive up over-all prices.
Norbert Mayr - Thanks that's what I thought I remembered. It will contribute to total health care cost, of course. I suspect that if this is enacted (Medicare for all, additional coverage optional) it won't be long before incorporating the optional coverage into the taxpayer funded Medicare is demanded. We'll have to wait and see how that unfolds.
Norbert, and I fully agree with you. Dental, vision, hearing should definitely be included in Med4All. It should be paid through our tax structure, which should include taxation on the value of corporate "cadillac" type medical benefits, not offered to common worker bees in the organization.
George Snead - The extras those "Cadillac" plans include are largely dental, vision, hearing and such. To that extent, they will no longer exist. How much money do you think taxing what's left of them will generate?
Isn’t the Health Insurance Tax part of the Affordable Care Act.......
Steve, to yours of 3:26;
those bene's avail only to corp execs should be taxed as income. But, we also need to roll back the Trump tax cuts (in most but not all areas) and do what Trump said he was going to do originally,* and tax cap gains, carried over interest, and insure a minimum individual and corporate tax - as well as a surtax on incomes above X amount (I would propose $10,000,000 but wouldn't quibble..)
We have, in essence, corporate welfare that should be examined. Our military budget could surely stand some scrutiny. Lot's of ways we can re-prioritize.
I believe health care is a right of US citizenship. I believe we can do whatever we set our minds to do. Ideally, we want a health care system which continues to best the best and the most innovative in the world, but does provide a floor of essential health care benefits to all our citizens. There's plenty of room for differences of opinions. We need a national dialogue. We, as the richest nation on earth, should not be the only developed country on the planet which doesn't provide basic health care for all our people.
* Remember when Trump said something close to "Oh, the rich aren't gonna like me very much when they see my tax plan" Yuk Yuk!
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