“With full implementation of the ACA a year away, the focus needs to be on making coverage more affordable,” said AHIP President and CEO Karen Ignagni. “Taxing health insurance will have the opposite effect by making it more expensive.”
Gov. Deval Patrick and the state Legislature have prioritized making health care more affordable, last summer passing a comprehensive payment reform bill that will experiment with alternative payments and caps on cost growth to reduce expenses. Health care now consumes more than 40 percent of the state budget, and leaders frequently site the high cost of insurance in Massachusetts as an impediment to business growth. The new cost control law sets the 2013 health care cost growth benchmark at 3.6 percent.
The governor and many Democrats in the Bay State have also been staunch supporters of the Affordable Care Act, while some like U.S. Sen. Scott Brown (R-Wrentham) and U.S. Rep. Niki Tsongas (D-Lowell) have called for the repeal of some of the taxes in ObamaCare, particularly the tax on medical device manufacturers.
The report estimates that the tax could reduce future private sector employment over the next 10 years by 159,000 jobs, and reduce sales nationwide by $18 billion.
“What would have to happen at the federal level is a repeal of the insurance tax. The unfortunate thing about this tax is that it’s going to add to the cost of care which is the opposite goal of the ACA,” Linzer said.