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Michigan businesses will face health insurance premium increases of $568 million beginning in 2020 if Congress does not act this year to delay the Health Insurance Tax this year.

Introduced as part of the Affordable Care Act, the HIT is basically a sales tax on health insurance coverage that would hit employers and consumers with higher premiums.

Thanks to bipartisan action by Congress, the HIT was suspended for 2019. But the one-year moratorium is scheduled to expire and return in 2020, resulting in a new $20.3 billion tax hike which will mean higher premiums.

Oliver Wyman Actuarial Consulting recently analyzed the projected impact of the HIT on health insurer premiums over the next 10 years and found that premiums are likely to increase 2.2 percent in 2020 and in subsequent years if Congress doesn’t delay or repeal the HIT. In Michigan, premiums in 2020 would increase by $568 million:

* Fully insured large employers and their employees will see premiums increase $424 for family coverage;

* Fully insured small employers and their employees will see their premiums increase $400 for family coverage;

* Seniors and disabled individuals in Medicare Advantage plans will see their premiums increase $452 per couple;

* Consumers in the individual market will see their premiums increase $157 per policy; and

* Michigan Medicaid will incur an additional cost of $167 million.

While no one should have to worry about a pre-existing condition denying them access to health care services, it is equally important to understand that increasing taxes does nothing to improve the overall health care system or address the rising costs of care.

Congressional action to delay or repeal the HIT will result in cost savings to businesses, middle-class families and seniors across Michigan.

Wendy Block is the vice president of business advocacy with the Michigan Chamber of Commerce.

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