February 13, 2018 – Healthcare Taxes

The recent government shutdown had some implications for healthcare which may not have been noticed. There were three Obamacare taxes which were to go into effect immediately that have now been at least postponed. The medical device tax, the tax on premium (Cadillac) health plans and the health insurance tax (HIT) would likely have made health care even more expensive.

The 2.3% tax on medical devices was billed as a “corporate” tax but likely would be passed on to the consumer. Patients and hospitals alike would have been affected as pacemakers, artificial joints, MRIs, ultrasounds and X-rays would all be included. This tax originally went into effect January 1, 2013 under the Affordable Care Act but Congress suspended it at the end of 2015. It was suspended for two years but with the shutdown there was agreement to suspend it for another two years. Not quite as good as a permanent elimination but better than implementation.

The Cadillac Tax on premium Health Plans was also pushed back for now the second time and is not to take effect until 2022 if at all. Understandably, this is something that had widespread bipartisan support from entities like the Teamsters Union.

Finally, during the recent budget negotiations there has been a delay in the health insurance tax (HIT). The HIT was part of the Affordable Care Act and was aimed at insurers but was thought to be likely passed on to enrollee’s premiums. From the HIT alone, premiums were thought to increase 2.6-2.8% over the next few years. This delay however does not take effect until 2019. That said, there are currently several pieces of legislation to delay or repeal the HIT retroactively to January 1, 2018. The Individual Mandate has been eliminated. Health Care continues to change and physicians engaged as leaders will produce changes good for our patients, communities, colleagues, and the country.

Chase Health,

Peter Sneed, MD, FAAO, PCEO
Oculoplastic and Reconstructive Surgery
President NMHN,
Board Member NPO


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