Don’t Take the HIT

by Ramesh Ponnuru

Will Republicans let a tax increase take effect on their watch? Obamacare includes a tax on health insurance plans. This “health insurance tax” (HIT) has been suspended, but is scheduled to go into effect in 2018. The effect has been estimated to be a $185 increase in premiums for small-group plans.

Opposition to the HIT has been something of a bipartisan cause. Now Republicans are debating how to handle the issue in the continuing resolution they are using to keep the government funded next year.

One option is to suspend the tax for participants in Obamacare’s exchanges and Medicare Advantage—leaving people who get coverage through their employers in the cold. That option would let the government keep more of the revenue of the tax, and some Republicans say that it’s too late to eliminate the tax on employer-provided coverage in a way that will be passed on to employees. It’s a disputed point. But it would be decidedly odd for Republicans to leave the tax in place for most plans while exempting the Obamacare exchanges.

A spokesman for the House Ways and Means Committee, which has jurisdiction over taxes, tells me, “Members are working to deliver as much relief as possible from the health insurance tax – as soon as possible.”

The Corner

The one and only.