Health insurers in Tennessee, Indiana, Oklahoma, Kentucky and Pennsylvania said they would all have to increase their premiums if the federal government imposed an annual “essentiare” tax on the industry.
According to the Insurance Institute for America (IIA), the federal tax would force health insurance companies to spend nearly $4bn (£2bn) on the costs of providing coverage to their 2.4 million enrollees in 2019 and 2020.
“If we can’t get our premiums down, it will force us to increase premiums for our most vulnerable patients,” said Steven A. Caughey, president and CEO of the Tennessee Blue Cross Blue Shield Association, a member of the IIA.
The ICA said premiums for those enrolled in the new plan in 2020 and 2021 would increase by 5% and 6% respectively, for a total increase of 11% in 2020.
“The reality is that if the tax is not enacted, it would require insurance companies in Tennessee and Indiana to increase costs,” said Daniel G. Schuster, IIA president and chief economist.
“There are people who are going to be impacted by the additional costs.
If you have someone with heart failure or somebody with a cancer, they will be affected by the increase in their premiums.”‘
Not a great situation’The insurance industry and Republican leaders have said the tax would be the worst possible scenario for the insurance industry.
“This would be a very, very, bad scenario for our insurance industry,” said Scott A. Thompson, president of the American Medical Association.
“If you don’t like your policy, if you don.
If there’s a change in policy, you can get it back.”‘
Absurd’ The federal government would have to impose the tax, which would cost insurance companies up to $2.9bn (£1.8bn) annually, if it passed.
In the absence of any new legislation, the federal healthcare system is expected to remain in place until 2021.