A new report reveals the 2019 repeal of the federal Affordable Care Act's costly Health Insurance Tax will save individuals and families enrolled in in fully insured health plans as much as $20.4 billion in premium reductions.
Released in February, the report produced by consulting firm Oliver Wyman found the repeal of HIT will reduce premiums by more than $270 billion over the next 10 years.
The report counters claims by supporters of two state legislative proposals that levy $50 million in annual assessments on health insurance carriers to fund additional premium subsidies on the state-run healthcare exchange.
Connecticut small businesses have voiced concerns over the proposed assessments, which are a tax hike that will drive up healthcare costs for employers and families.
At a press conference earlier this week, Gov. Ned Lamont defended the proposed assessment, saying it was “absolutely wrong [that it will be passed along to consumers].”
However, the Oliver Wyman analysis, which used financial statement data to project premium savings for fully insured plan participants in each state, found significant savings for Connecticut individuals and families.
In 2021, those in Connecticut with individual marketplace coverage will see a total premium reduction of over $23 million, while small group enrollees will see a $25.4 million reduction and large group enrollees will see total savings of $54 million.
On a per capita basis, this translates to annual savings of $215 for the individual marketplace, $170 for the small group single, $529 for the small group family, $186 for the large group single, and $528 for the large group family.
From 2021 through 2030, those with individual marketplace coverage will see a $334 million reduction, small group enrollees will see a $313.7 million cut, and large group enrollees will see a $668.7 reduction.
For Connecticut consumers, that translates to a 10-year, per capita savings of $2,739 for the individual marketplace, $2,096 for the small group single, $6,518 for the small group family, $2,291 for the large group single, and $6,513 for the large group family.
'Duplicative and Unnecessary'
The U.S. Congress repealed HIT in December 2019. The tax was a major driver of health insurance costs since it was imposed on fully insured plans with the passage of the Affordable Care Act in 2010.
The assessment is also duplicative and unnecessary, given that the federal American Rescue Plan Act allocates more than $40 billion to states that will increase premium tax credits and decrease the cost of insurance for millions of people across the country.
CBIA's Wyatt Bosworth told an earlier committee hearing that the business community opposed HB 6447 "due to the financial burden that will be placed on the large group and individual markets by this assessment."
State taxes, fees, and assessments already add $591 annually to the cost of a fully insured healthcare policy, with fears the latest proposal could add hundreds of dollars more to individual policies.