The Affordable Care Act’s health insurance tax will lead to more premium hikes if it is not repealed, according to the Chamber of Commerce.
Obamacare mandated that the health insurance industry as a whole be taxed a fixed amount each year. This tax would be split between insurers based on their proportional market share as measured by total premiums.
The tax cost health insurers $8 billion in 2014, the first year the Affordable Care Act went into effect. That collective tax rose to $11.3 billion in 2015 and 2016. I will rise to $13.9 billion in 2017, and will rise again to $14.3 billion in 2018.
“The logic behind this tax is that insurance companies will make money from increased enrollment due to the ACA, and therefore should pay more to the federal government,” said Robert Book, a health care and economic expert at the American Action Forum.