Dear Majority Leader Reid and Speaker Boehner:
Business Roundtable (BRT) strongly supports legislation (S. 1880 and H.R. 1370) that would repeal a new tax on health insurance premiums included in the Affordable Care Act. According to the Joint Committee on Taxation, this tax, which starts in 2014 but will be felt by individuals and businesses starting in 2013, will be passed on to consumers in the form of higher premiums, averaging $400 per year. In the Senate, Senators Barrasso, Hatch, and Snowe introduced S. 1880, the Jobs and Premium Protection Act, to repeal this new tax on health insurance providers; in the House, Congressman Charles Boustany introduced H.R. 1370, which currently has 226 bipartisan co-sponsors – more than would be necessary to pass the bill.
Business Roundtable encourages you to include legislation fully repealing this devastating new tax in any appropriate legislative package that is expected to reach the President’s desk for signature in the coming months.
Business Roundtable is an association of chief executive officers of leading U.S. companies with nearly $7.3 trillion in annual revenues and nearly 16 million employees. BRT member companies comprise nearly a third of the total value of the U.S. stock market and invest more than $150 billion annually in research and development – equal to 61 percent of U.S. private R&D spending. Our companies pay more than $182 billion in dividends to shareholders and generate nearly $500 billion in sales for small and medium-sized businesses annually. BRT companies give more than $9 billion a year in combined charitable contributions.
Business Roundtable companies provide health coverage to nearly 40 million Americans. As such, we play a significant role in helping American workers and their families remain healthy or receive treatment when necessary. BRT CEOs have opposed this new tax since it was enacted and called for elimination of the tax in our pro-growth policy agenda, ‘Taking Action for America: A CEO Plan for Jobs and Economic Growth,’ released earlier this year.
Business Roundtable CEOs consistently cite rising medical care costs as one of their greatest cost pressures. These costs are inhibiting job creation and damaging our ability to compete in global markets. Medical care costs are also putting a strain on the household budgets of many American families. Imposing a tax on health insurance providers will do nothing to improve the efficiency or quality of the health care system and will simply be passed on to consumers, continuing to increase their costs with no value added. In fact, the Congressional Budget Office (CBO) recognizes that this new tax alone will cause premiums to increase by 2.0 to 2.5 percent by 2016. Additionally, the impact is not only on employers and consumers. Studies indicate that the tax will require the Federal government to spend an additional $23 to $27 billion by 2023 and states will bear up to $14.9 billion in additional costs to their budgets.
For these reasons, we again urge you to include legislation repealing this new tax on health insurance premiums in a broader legislative package expected to reach the President’s desk for signature as soon as possible.
Business Roundtable looks forward to working with you to achieve passage of this important legislation that will prevent employers’ and families’ health care costs from rising unnecessarily.