Health Insurance Premium Tax
May 20, 2009

HI, I’m Gene Barr. Welcome to this month’s Pennsylvania Chamber Minute.

As employers, you know all too well that rising costs continue to erode health-care affordability and accessibility.

Health-care costs are also a major deterrent to job creation and business growth.

Pennsylvania residents and employers are looking to lawmakers to address the many factors that are driving these costs. That’s why it’s hard to understand why the Rendell administration wants to INCREASE the cost of health care through a new health insurance tax.

Included in the governor’s proposed budget for the coming fiscal year is a 2 percent tax on virtually all health insurance plans in the Commonwealth. This proposal was officially introduced on April 28 as House Bill 1351.

Businesses of all sizes would have to bear the weight of this tax. In many cases, employees would end up shouldering the burden in some manner as well. So too could low-income individuals enrolled in AdultBasic and parents of children enrolled in the Children’s Health Insurance program, if both of these plans pass costs directly on to participants.

The proposal also amounts to double taxation on insurers, as most already pay taxes on health-care plans, depending on the structure of their business.

Taxing health insurance takes Pennsylvania in the wrong direction.

Recently, the Pennsylvania Chamber testified before the House Health and Human Services Committee about this issue. Many of the business community’s friends in the General Assembly share our concerns. We hope as more attention is brought to the issue, other lawmakers will rethink the wisdom of placing a direct tax on Pennsylvanian’s access to health care.

Especially now, with employers and consumers struggling in the current economy, lawmakers must be prepared to make the tough choices in this year’s budget debate to bring down ever-rising health-care costs.

This means addressing cost drivers, including lawsuit abuse and government mandated benefits. Failure to do so could leave many employers with no other option than to drop health benefits they can no longer afford to offer.

We’ll continue to deliver this message to policymakers on your behalf. We encourage you to contact your elected officials so they know how this tax would impact your ability to offer health benefits to your employees.

Thank you for your continued support and for sharing a minute of your time with the Pennsylvania Chamber – the statewide voice of business.