Whether at town halls, in meetings, through letters or emails, the top concern we hear from hardworking Americans is that health care costs are too high. Many families rely on their health insurance to cover their medical needs, only to be hit with high deductibles, surprise emergency room bills, and unaffordable prescription drug costs. This is especially true for our nation’s seniors. This fall, Congress has an opportunity to fix this for many seniors with a simple, bipartisan solution: eliminating the Health Insurance Tax (HIT).
For Medicare Advantage beneficiaries who live on fixed incomes, the out-of-pocket cost protections they have in their coverage are vital. But, unless Congress acts, these beneficiaries risk facing the possibility of higher health care costs or fewer benefits due to the HIT. The HIT is a multi-billion-dollar tax on annual premiums that was first levied in 2014 and increases every year by the rate of growth in premiums. Over 25 percent of the HIT falls on Medicare Advantage and Part D plans, resulting in higher costs and possible reductions to supplemental benefits shouldered by seniors and other beneficiaries who depend on their coverage to meet their health care needs and keep health care affordable.
Today, over 22 million Medicare beneficiaries are covered by Medicare Advantage, and almost half live on less than $24,000 a year. They are looking to Congress for solutions that will lower health care costs. Uzella Scoville is a Medicare Advantage beneficiary from Cincinnatus, N.Y., who is concerned about the mounting health care costs she faces every day. Uzella suffers from Central Pain Syndrome after a stroke paralyzed the right side of her body a few years ago. With the tax looming, any increase in her health care costs would be devastating for her and other beneficiaries living on razor thin margins.
Many beneficiaries with Medicare Advantage and Part D coverage are low- to modest-income individuals, and over 20 percent of enrollees are also eligible for Medicaid. The threat of the HIT could impact not only the cost of health care, but also the availability of supplemental benefits like dental, vision, and hearing as well as newly-allowable benefits like pest control, transportation services, and post-hospital meal delivery, among others.
Another beneficiary, Carolyn Lee of Rome, N.Y., has spinal stenosis and is ardently opposed to changes in her Medicare Advantage plan. Carolyn shares, “I absolutely love my Medicare Advantage plan. My prescriptions are covered very, very well, I seldom pay more than $5 to $8…Any time I go to my primary care doctor my copay is only $5 and I would not like to see that change.”
The value beneficiaries derive from the Medicare Advantage’s affordability and high-quality care advances what we ought to strive for across the health care system. Unfortunately, if reenacted, the HIT would leave beneficiaries like Uzella and Carolyn making the choice between their health coverage and paying for other necessities like gas, groceries, and utility bills. We can spare beneficiaries from these painful decisions by passing the Jobs and Premium Protection Act that would repeal the HIT for good.
We cannot leave seniors with more worry and more financial insecurity. Permanently ending the HIT would protect some of the most vulnerable in our communities and reduce rising health care costs for many Americans. Nearly 40 percent of New Yorkers and 34 percent of Americans on Medicare are enrolled in Medicare Advantage. Without a repeal of the HIT someone will be left paying more for their care.
Hardworking Americans need to be heard. Their ask of us, as policymakers, is to reduce their health care costs. Congress needs to listen and act now to reduce health care costs, not increase them.
Repealing the HIT is the best way Congress can deliver on lowering health care costs for beneficiaries who rely on Medicare Advantage and Part D prescription drug coverage to sustain their health. Let’s listen to Uzella and Carolyn and provide them with the security in their health coverage that they deserve.
Brindisi represents the 22nd District of New York. Schwartz is a former representative from Pennsylvania and is CEO & President of Better Medicare Alliance.