Sununu joins governors urging repeal of Obamacare taxes

Monitor staff
Published: 12/12/2018 5:00:20 PM

Gov. Chris Sununu is leading 11 Republican governors to urge Congress to repeal two Obamacare health taxes that they say are raising premiums, hoping to capitalize on a dwindling lame-duck session before Democrats retake the House.

In a letter to Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan sent Wednesday, the governors asked lawmakers to abolish the Health Insurance Premium Tax (HIT) and the Medical Device Tax (MDT) from the Affordable Healthcare Act.

The letter comes a month after a bipartisan letter sent by Sen. Jeanne Shaheen in November, which called for an extension of a moratorium on both taxes after 2020. 

The HIT taxes insurers on premiums they charge; the MDT is a 2.3  percent excise tax on medical devices sold within the United States.

Both taxes are part of a range that accompanied the 2010 Affordable Care Act to help fund key subsidies within the program without raising the federal deficit.

But Sununu and other critics argue that the HIT burdens insurers with costs that are passed on to consumers and businesses in the form of higher premiums. This January, Congress passed an exemption to the tax, suspending it until 2020; the governors wrote that Congress should abolish it before it is reinstated. 

The medical device tax has long been a political target in New Hampshire, with both Sen. Kelly Ayotte and her successor Sen. Maggie Hassan calling for its repeal in the 2016 campaign. In January, the tax was reinstated after a two-year suspension, reigniting criticism that it was overburdening New Hampshire health care manufacturers.

“The solution is not, as some Democrats have suggested, to pour more and more taxpayer dollars into the problem through subsidies,” the letter read. “Rather the best solution is to repeal the tax entirely. Doing so would result in lower premiums for millions of Americans.”

In laying out their case, the governors are seeking to draw a direct connection between the taxes and the high premiums that have plagued the individual market in recent years, pointing to an August report commissioned by the United Health insurance group.

That report, carried out by Oliver Wyman Actuarial, estimated that the $16 billion in taxes could raise premiums by 2.2 percent in 2020. And it estimated that premium increases in New Hampshire could total $8.4 million for small group plans and $22.9 million for large group plans.

The tax is only one of several reasons premiums on the individual market have risen, analysts say, including poor participation from healthier populations, the removal of “cost-sharing reduction” subsidies to insurers in 2017, and the effective elimination of the individual mandate for next year’s plans.

But Sununu and the other governors singled it out as a factor that should be reversed.

“The result of this tax is billions in increased costs on insurers, though it is small businesses and consumers who are left to foot the bill in the form of higher premiums,” the governors wrote in the letter.

Wednesday’s letter was drafted and spearheaded by Sununu’s office over the course of several weeks, a spokesman for the governor said.

Signing the letter were a panel of Republican governors – some whose terms are about to end – including Govs. Scott Walker of Wisconsin; Paul LePage of Maine; Rick Scott of Florida; Greg Abbott of Texas; Matt Bevin of Kentucky; Phil Bryant of Mississippi; Kim Reynolds of Iowa; Jeff Colyer of Kansas; Pete Ricketts of Nebraska; Henry McMaster of South Carolina; and Gary Herbert of Utah.

But it lands at an unusually busy time for the outgoing Congress, a day after McConnell promised to bring forward a wide-ranging criminal justice bill and instructed senators to prepare to work around the holidays to complete it ahead of the Jan. 3 inauguration.

But in signing off, the governors made an appeal in principle to Congressional leadership, calling it “vital that we seize on opportunities to inject free-market principles into our health care system, which will not only improve it but bring down premiums and stop the unsustain able spending.”

(Ethan DeWitt can be reach ed at edewitt@cmonitor.com, at (603) 369-3307, or on Twitter at @edewittNH.)




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