Insurance Commissioner urges lawmakers to suspend health insurance tax

Halen Doughty

Louisiana Insurance Commissioner Jim Donelon is pushing for the repeal of an insurance tax imposed under the Affordable Care Act. Donelon is urging members of Louisiana's Congressional delegation to support legislation that would suspend the tax, which is a premium collected by health insurers.

That tax is dollar-for-dollar paid by every policyholder of health insurance in this state,” Donelon said. “The passage of this tax has caused a rise in health insurance premiums as all premium taxes are passed directly to policyholders.”

A firm estimated that Louisiana policyholders would pay higher premiums in the amount of $377 million due to the tax. The actuarial firm Olivery Wyman found that works out to around $500 in their premiums for families every year. Donelon said it's not just commercial policyholders that get hit either. He said Medicare Advantage plans and even the state's Medicaid plans are also taxed. It's estimated that Medicare Advantage premiums will rise about $576 per couple next year as a result of the Health Insurance Tax (HIT).

With the passage of Obamacare, we have seen premiums rise dramatically every year. Our individual market will see premiums go up an average of 18.5 percent next year. If you get your health insurance through your employer, in the group-employer market, your premiums will go up an average of 7.5 percent next year,” Donelon said. “This is on top of similar big ticket rate increases that we have seen for the four prior years."

Donelon is urging members of Congress to slow those health insurance increases by suspending or repealing the HIT. He noted the HIT portion of those increases can be reduced if Congress suspends it again, as federal lawmakers did for the 2017 plan year. Several health insurers have indicated that if the tax is suspended for 2018, they will file rate changes to lower rates during the year.

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