Premium Tax

Beginning in 2014, the ACA requires health plans to pay a new sales tax on policies sold to individuals, working families, small businesses and seniors. The tax begins at $8 billion in 2014 and rises to $14.3 billion in 2018. 

While one of the goals of the ACA is to make coverage more affordable, the new sales tax on health insurance will have the opposite effect. The Congressional Budget Office has said that this tax will be passed along to individuals and small businesses in the form of higher health insurance premiums. According to Doug Holtz-Eakin, former director of the Congressional Budget Office, the tax will place an upward pressure of $135 billion on premiums over the next 10 years and will add as much as 3 percent per year ($475) to the average family premium, or nearly $5,000 per family over a decade.

Latest Documents

End the Premium Tax

 

AHIP Web Resources | Strategic Communications | 09/19/2012

JCT Partial Re-Estimate of Tax Provisions in ACA

The Joint Committee on Taxation projects that the new premium tax contained in the health reform law will total $101.7 billion between 2013 and 2022.

Government Documents | Strategic Communications | 09/19/2012

Premium Tax: What You Need to Know - [PDF]

 

Reports/Fact Sheets/Briefs/Talking Points | Strategic Communications | 07/13/2012

NFIB Study: Effects of the PPACA Health Insurance Premium Tax on Small Businesses and Their Employees - [PDF]

The National Federation of Independent Business Research Foundation released a study examining the private-sector job loss that will result from the health insurance premium tax.

Other Reports/Papers | Strategic Communications | 11/09/2011

Oliver Wyman Study: Estimated Premium Impacts of Annual Fees Assessed on Health Insurance Plans - [PDF]

A technical analysis by Oliver Wyman estimates that the new health insurance tax in the Affordable Care Act (ACA) “will increase premiums in the insured market on average by 1.9% to 2.3% in 2014,” and by 2023 “will increase premiums 2.8% to 3.7%.” AHIP commissioned this report as part of its ongoing effort to raise awareness about the impact the tax will have on consumers, employers and public program beneficiaries.

Reports/Fact Sheets/Briefs/Talking Points | 10/31/2011

Marwood Group Study: Impact of ACA Annual Health Insurance Tax on State Medicaid Programs - [PDF]

The Marwood Group prepared this study on the impact of the health insurance premium tax on state Medicaid programs.

Other Reports/Papers | 10/06/2011

Higher Costs and the Affordable Care Act: The Case of the Premium Tax - [PDF]

The Affordable Act imposes a fee on health insurers that amounts to a de facto “health insurance premium tax” that will raise the cost of health insurance for American families and small employers. Specifically, under the law, an annual fee applies to any U.S. health insurance provider, with the intent of raising nearly $90 billion over the budget window.

Other Reports/Papers | 03/09/2011

Labor Market Incentives, Economic Growth and Budgetary Impacts - [PDF]

Former Director of CBO Doug Holtz-Eakin testified before a House Ways & Means Committee hearing that the tax increase on health insurance premiums will be passed on to consumers with American families paying as much as $135 billion in higher premiums over the next 10 years.

Congressional Correspondence | 01/26/2011