Friday, August 28, 2009

A Tax on Insurance Companies is a Tax on You

Bob Laszewski addresses in his Healthcare Policy and Marketplace blog a recent idea by the Congress and the White House for paying for the proposed healthcare “reform.” They want to tax insurance companies. Let’s set aside for a moment that Ohio and most other states already have a state premium tax that insurance companies pay and instead look at what this really is. It is simply an attempt to stick somebody with the price tag for the legislation currently being discussed. And since, as Mr. Laszewski points out, everyone else has fought back against being saddled with that price tag, the Congress and the White House are picking a target that the general public would never defend: insurance companies.

Well, Mr. Laszewski is asking that you in fact defend the insurance companies against this move, and he is right. It is NOT a tax on insurance companies, it is a tax on consumers and businesses. In order to pay a new tax, which will simply be viewed as a cost of doing business, insurance companies will increase premiums by the amount of the tax. Does this action help solve the problem of rising healthcare costs?

Our leaders in Washington need to focus on addressing the waste in the current system and on the true reasons behind the rising cost of healthcare. Taxing insurance companies may be a politically convenient way to pay for universal coverage, but it hides the truth that each taxpayer will be forced to pick up the bill.


- Kevin Hignett, Herbruck Alder -