[Congressional Record Volume 157, Number 175 (Wednesday, November 16, 2011)]
[Senate]
[Pages S7614-S7616]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mr. BARRASSO (for himself, Mr. Hatch, and Ms. Snowe):
S. 1880. A bill repeal the health care law's job-killing health
insurance tax; to the Committee on Finance.
Mr. HATCH. Mr. President, I want to thank my good friend from
Wyoming, Senator Barrasso, for his work on this and other issues
related to the President's health law. He is a leading orthopedist, and
I have nothing but respect for him. As a former medical liability
defense lawyer defending doctors, nurses, hospitals, and other health
care providers, I appreciate good doctors, and this is one good doctor.
He and Dr. Coburn are two of the best people I have known and are a
credit to their profession.
I thank him for his work on this and other issues related to the
President's health care law. He has been tireless in his careful
analysis and fair criticism of the health spending law, and I believe
we are in agreement on that bill's fundamental flaw.
The President and his allies repeatedly promised that the health law
would decrease costs. That is not going to happen. The so-called
Affordable Care Act is going to, in fact, drive up the cost of
coverage.
Among the biggest reasons for this inflationary impact are the taxes
that will be imposed on the American people to pay for the lost $2.6
trillion in new spending. At the top of the list of senseless cost-
increasing taxes is the law's tax on health insurance. It is not clear
to me how the cost of health insurance will decrease by taxing it.
Many people probably don't even know this tax exists. Like most of
the taxes in ObamaCare, its implementation was conveniently delayed
until after the 2012 Presidential election. But this tax is coming. It
is going to hurt employers and employees. It is going to be a drag on
our economy, and it is going to depress wages.
I am glad to be standing here with Senator Barrasso as we introduce
the Jobs and Premium Protection Act, a bill that repeals this onerous
and counterproductive tax on American workers and job creators. The
President speaks about the need for Congress to do something about
jobs. Well, we would go a long way toward creating the conditions for
job growth by passing this legislation.
Unemployment in this country remains a full-blown crisis. Millions
are out of work, and the 9-percent unemployment rate doesn't begin to
capture the full extent of our jobs deficit. We need policies that will
encourage businesses to invest and expand. Yet the health law's
insurance tax does just the opposite. According to a recent analysis,
in just the first 10 years, the insurance tax would impose $87 billion
in costs on businesses and their employees. Revenue that could be spent
on higher wages, new hires, and capital investment--increasing jobs and
growing the economy--will instead go to pay this tax. And that is just
the start. In the second decade, this tax will cost businesses and
their employees $208 billion.
[[Page S7615]]
It is important to understand how this insurance tax will work.
Starting in 2014, the health insurance companies will have to pay a tax
based on their net premiums written in the fully insured market. This
is the market where 87 percent of small businesses purchase their
health insurance. It is the market where the self-employed and
uninsured go to purchase insurance.
So who will pay this tax? Someone has to pay it. Contrary to the
talking points that all too often come out of this administration, all
of these new mandates and regulations are not free. Someone has to foot
the bill. Ultimately, it will be those least able to afford it who are
paying it. Primarily small businesses--and their employees--will be
responsible for paying this tax. When the cost of coverage goes up due
to this tax, employees will pay for it in lower wages or higher health
care costs.
According to a recent study, the average employee with a family plan
will see his or her take-home pay reduced by $5,000 over the next
decade because of this tax. The American people should remember that
statistic the next time they hear their liberal supporters of the
health care law talk about wage stagnation or income inequality.
The costs of this tax will be felt by citizens even beyond those
small businesses. The factories that lose orders because their
customers' health care costs are going up will pay for this tax. Those
searching for work will feel it too, because money that could go to new
wages for new employees will instead go to pay for this tax and
increased health care costs for existing employees.
This tax will hit wide swaths of the American economy, with millions
of businesses and individuals impacted. A study by the National
Federation of Independent Business shows this tax alone will lead to a
loss of 125,000 to 249,000 jobs between now and 2021.
The legislation we are introducing today will help to reverse this
trend. Ultimately, all of Obamacare must be repealed. I am fully
committed to uprooting it in its entirety. It undermines our
Constitution and it undermines personal liberty. It exacerbates the
Nation's debt crisis by creating and expanding entitlement spending,
and it also undermines our economy, destroying existing jobs and
preventing the creation of new ones.
The people of Utah and people all over the United States need a jobs
agenda. Repeal of the health insurance tax through the Jobs and Premium
Protection Act we are introducing today would do much to address the
scourge of unemployment and get our economy moving again.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. BARRASSO. Mr. President, first, I wish to congratulate and thank
my colleague, the senior Senator from Utah, Mr. Hatch, for his
continued leadership on the issue of health care. As the ranking member
of the Finance Committee, he has been a stalwart and strong supporter
in efforts to get for the American people the health care they need,
from the doctor they want, at a price they can afford, and amazing in
his fight against what this body, what the House of Representatives,
and what the President have forced onto people all across this country,
which, to me, has been bad for patients, bad for the providers of those
patients--the nurses and doctors who take care of them--and terrible
for taxpayers.
That is why week after week I come to the floor to give a doctor's
second opinion about the health care law, and why I am so pleased to be
here with my colleague today to join in the introduction of this piece
of legislation.
As people all around the country know--those who listened to the many
speeches given during the debate on health care--the President and
Democrats in Washington promised the American people this trillion
dollar health care spending law would lower health insurance premiums.
That is what the President promised, that health insurance premium
costs would go down. Well, the American people have now had 19 months
to review what is in the health care law, and they are finding that the
President and the Washington Democrats sold them a bill of goods.
On September 27 of this year, the Kaiser Family Foundation issued its
annual survey of employer-sponsored health insurance premiums. The
report showed that employer-provided health insurance premiums rose--
went up, not down--$1,303 for an average family last year alone.
Remember--and we do--that the President repeatedly promised his health
care law would reduce the average annual family premium by $2,500. Yet
the exact opposite of what the President promised has occurred. The
Kaiser Family Foundation report shows significant premium increases,
not savings as the President promised.
Not only are premiums continuing to climb, but the President and
Washington Democrats paid for their health care spending law by
imposing billions of dollars in new taxes on American business and
American consumers. Independent experts agree these taxes only serve to
increase an individual, a family, or a small business's cost to buy
medical coverage. Specifically, section 9010 of the health care law
creates a new $60-plus billion tax on health insurance plans starting
in 2014.
The health care law slaps this tax on all health insurance companies
based on net premiums in what is called the fully insured market. This
means the tax an insurance company must pay is equal to the percent of
their market share. The larger the insurance company's market share,
the higher their annual health insurance tax becomes. The aggregate tax
in 2014 is $8 billion and climbs to $11.3 billion in 2015 and 2016,
eventually reaching over $14 billion in 2018. After that, the law
mandates the health insurance tax grow by premium inflation. More
inflation, higher taxes.
Former Congressional Budget Office Director Douglas Holtz-Eakin
released a study in March of this year estimating the health insurance
tax could exceed $87 billion between 2014 and 2020. Some on the other
side of the aisle want to message this tax as a ``health insurance
fee.'' I would say to my friends all across this country, Do not be
fooled. This new tax directly hits small business.
The Joint Committee on Taxation makes it clear the insurance tax will
be borne by consumers in the form of higher prices, by owners of firms
in the form of lower profits, by employees of those firms in the form
of lower wages, or by other suppliers to the firms in the form of lower
payments.
Remember, this tax only hits health insurance companies that sell
their products in the fully insured market. As we have learned, and
heard earlier on the Senate floor, 87 percent of small businesses buy
their health insurance in this fully insured market.
The fully insured market is also the place that uninsured individuals
and the self-employed go when they need to purchase medical insurance.
Insurance companies selling plans to individuals and small businesses
are the ones that are hit with the tax. The new tax doesn't hit large,
self-insured businesses. Ultimately, uninsured individuals, small
businesses, and their employees are the ones who are going to end up
paying this unfair tax. This new punitive tax will add hundreds of
dollars to family and small business insurance premiums every year.
The Wyoming Blue Cross Blue Shield Association tells me that a
Wyoming family of four will see a premium increase because of this tax
of over $300 in 2014. In 2018, that same Wyoming family of four will
see over a $500 premium increase as a result of the tax. These premium
increases will have been passed through to consumers as a direct result
of this health care law's tax component--what the President and the
Democrats in this body have foisted on the American public.
Additionally, the Holtz-Eakin March 2011 study proves the health
insurance tax will raise premiums by as much as 3 percent or nearly
$5,000 for a family of four over the next decade. What American family,
I ask you, can afford to see their take-home pay reduced by $5,000 over
the next decade thanks to the President's new tax. The Nation's
unemployment rate stands at 9 percent. There are 14 million Americans,
people across our country, unemployed and looking for work. Struggling
American families cannot bear the brunt of President's Obama's new tax.
A recent study by the National Federation of Independent Business
found this health insurance tax will force the
[[Page S7616]]
private sector to shed somewhere between 125,000 and 249,000 jobs
between now and 2021. More than half of those losses will fall on the
backs of small businesses.
Two million small businesses across this country cannot afford
President Obama's new tax. Twenty-six million workers, who get their
insurance through their employer, cannot afford President Obama's new
tax. And the 12 million people who buy health insurance plans on their
own in the individual market cannot afford President Obama's new tax.
That is why today we introduce legislation called the Jobs and Premium
Protection Act.
I introduced this bill along with my friend, the ranking member of
the Senate Finance Committee, Senator Hatch. Our legislation is simple
and straightforward. It eliminates the health care law's punitive tax
on every individual, family, and small business that chooses to do the
right thing and buy health insurance. Unbelievably, the health care law
punishes individuals and punishes small businesses, the very two groups
who find buying health insurance at an affordable price extremely
challenging. Why would the Federal Government implement policies that
make it harder by imposing a tax on the products these individuals buy?
Some must believe that insurers will simply be able to absorb the
tax. Well, experts tell us that assumption is false. Here is what the
nonpartisan Joint Committee on Taxation said in a letter to Senator
John Kyl in June of this year:
We expect a very large portion of the insurance industry
fee to be passed forward to purchasers of insurance in the
form of higher premiums.
A very large portion, they say. Then they go on to say:
Eliminating this fee would decrease the average family
premium in 2016 by $300 to $400.
Isn't that what we want, to lower the cost of insurance for
individuals? This is the way to do it.
Finally, the Joint Committee on Taxation letter confirms the
following:
Repealing the health insurance industry fee would reduce
the premium prices of plans offered by covered entities by 2
to 2\1/2\ percent.
This ill-conceived discriminatory tax must be eliminated. It must be
stopped well before it starts to impact individuals, families, and
small businesses. Our bill is a critical piece of pro-business
legislation. It has the support of organizations such as the National
Federation of Independent Business, the U.S. Chamber of Commerce, Blue
Cross Blue Shield Association, and America's health insurance plans.
I urge colleagues on both sides of the aisle who are concerned about
the cost of insurance for families of America, who are shocked and
surprised, some in disbelief, that what the President promised the
American people--of a reduction in premiums--isn't true, and who want
to try to in a little way right that wrong to do so by cosponsoring and
supporting the Jobs and Premium Protection Act.
I thank the Chair and the ranking member of the Senate Finance
Committee, Senator Hatch--especially Senator Hatch--for his leadership
and for joining me in introducing this legislation today. The time has
come to eliminate a bad policy that not only increases health insurance
costs but also negatively impacts America's job creators.
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