Health Care Law’s Tax Increases Do Not Equal ”Affordable Care”
There’s a glaring misnomer in the Patient Protection and Affordable Care Act (PPACA). It doesn’t make health care more affordable. Much of the blame lies in the hundreds of billions of dollars in taxes and fees that pay for the law.
The U.S. Chamber put together a list of $835.9 billion in additional costs on businesses that include new taxes, new fees, and the elimination of deductions. What’s more, in sorting out an argument between Senator Ron Johnson (R-WI) and Rep. Debbie Wasserman Schultz (D-FL) over how much in taxes the PPACA will impose, the Washington Post’s fact checker, George Kessler wrote, “there seems little debate that the health-care law has about $1 trillion in taxes.”
Adding $1 trillion in taxes is the opposite of making health care more affordable.
One particularly painful tax is the Health Insurance Tax (HIT). This is an annual fee on insurance companies based on net premiums issued. Both the non-partisan Joint Committee on Taxation (JCT) and the Congressional Budget office conclude that consumers will pay the brunt of this tax. Repealing the HIT could make health insurance more affordable by decreasing the average family premium on average $350 to $400 in 2016 according to JCT.
Another harmful tax is the 2.3% tax on medical devices that I've often wrote about. There’s now a possibility that medical apps on smartphones and tablet computers could be classified as medical devices and slapped with the tax.
Finally, Kessler’s story notes an underreported ticking tax time bomb that could target many Americans in the future. Sen. Johnson’s spokesman pointed out that the 0.9% payroll tax and 3.8% unearned investment income tax on individuals making more than $200,000 a year and couples making more than $250,000 a year isn’t indexed to inflation. Like the Alternative Minimum Tax, as wages rise because of inflation, the scope of the tax will engulf more individuals and couples who don’t consider themselves high-income.
Put aside the fact that health insurance costs continue increasing, the PPACA’s taxes alone crush any notion that the law will make health care more affordable.