An Obamacare tax on health insurance providers is expected to generate $15.5 billion in taxes next year unless Congress suspends it again, according to a notice issued this week by the IRS.
The tax on all fully insured health plans was created as part of the Affordable Care Act to help fund implementation of the ACA’s health insurance exchanges. Congress suspended the tax in 2019 over fears that the tax would increase health insurance premiums. The tax was last implemented in 2018, generating $14.3 billion in tax collections, according to IRS Notice 2019-50.
According to analysis conducted by Oliver Wyman Actuarial Consulting for UnitedHealth Group, the tax would affect 142 million consumers and trigger a 2.2 percent increase in premiums in 2020. The analysis also predicted that higher premiums could lead to lower enrollment in the ACA exchanges and a higher number of uninsured.