The House Ways and Means Committee held a hearing on July 12 examining the increase in premiums for health insurance plans offered in the Health Insurance Marketplace. The Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) created the Marketplace (sometimes called an “Exchange”). Individuals who obtain coverage through the Marketplace may qualify for the Code Sec. 36B premium assistance tax credit to help offset the cost of premiums.
PPACA “taxes and fees cost more than inpatient spending,” Joel C. White, president, Council for Affordable Health Coverage (CAHC), testified. According to White, healthcare premiums are increasing about three times faster than wages. Health insurance taxes should be repealed because the costs pass on to the consumer by way of higher premiums, he added.
Objective analysts have found that the individual mandate tax penalty is not achieving its intended result of having younger, healthier individuals purchase a health plan through the Marketplace, according to Christopher E. Condeluci, principal, CC Law & Polich PLLC, and former counsel to the Senate Finance Committee. Rather than buying a healthcare plan that an individual cannot afford, “instead, they are choosing to pay a stiff tax penalty,” Ways and Means Chairman Kevin Brady, R-Tex., said during opening statements.
“Congress has enacted 24 changes to the Affordable Care Act since its enactment, most of them in a bipartisan manner,” White testified. Among those changes, “Congress enacted a moratorium on collection of the health insurance tax, which is expected to lower premiums by 1-to3-percent in 2017,” White said.
“It is absolutely an imperfect market today, but it is a vastly improved one, yet it still needs to be improved upon,” Peter Lee, executive director of Covered California, said. Neither of the four expert witnesses advocated repealing the PPACA when asked by lawmakers, but all agreed adjustments and improvement are needed.