Negotiators eye one-year suspension of ObamaCare’s ‘premium tax’

Lawmakers are considering scaling back an ObamaCare tax on insurance companies as part of a year-end legislative deal.

Two other ObamaCare provisions were already expected to be in the package: a two-year delay of the “Cadillac tax” on high cost health insurance and a two-year suspension of the excise tax on medical devices.

{mosads}But sources say a one-year suspension of the Health Insurance Tax, also known as the “premium tax,” in 2018, is also in the mix.

Sen. John Cornyn (R-Texas), the Senate’s No. 2 Republican, previously expressed reluctance to give Democrats their request for a two-year delay in the Cadillac tax without extracting concessions in return. 

Asked on Thursday what Republicans might get in exchange, he pointed to the other two ObamaCare taxes. 

“Well I know the medical device tax and the premium tax are being discussed in that context,” Cornyn said.

Along with the Cadillac tax delay, he said, “Those are some of the things that are being discussed together.”

Health insurers have long pushed for repeal of the Health Insurance Tax, arguing its cost is passed on to consumers in the form of higher premiums. The government is expected to bring in more than $100 billion from the tax on insurers over 10 years. 

Republicans have long been in favor of repealing the HIT, and there has been some Democratic support as well. A bill in the House to abolish the tax has the backing of 228 Republicans and seven Democrats.

There is still uncertainty around the tax package, as it is unclear whether negotiators will reach a broad deal that includes ObamaCare or fall back on a narrower deal that simply extends some expired tax breaks. 

House Ways and Means Committee Chairman Kevin Brady (R-Texas), though, has floated the possibility of including changes to the ObamaCare taxes in the package even if it is narrower. 

Sources also say that Democrats previously pushed for help for insurers under ObamaCare’s “risk corridor” program, possibly including a new tax credit to help insurers deal with heavier-than-expected losses.   

The program, meant to provide a cushion for insurers against losses in the early years of the healthcare law, has been unable to bring in enough money to meet insurers’ requests for payouts. 

Republicans, though, have strongly objected to the program as a “bailout” for insurers, and sources say that new help for the program appears dead.