Maine has approved a small but welcome health insurance rate decrease for the coming open enrollment season. This is great news for businesses and individuals shopping for health insurance on the Exchange, and it’s a direct result of positive federal action on taxes.

Everyone recognizes that taxing health insurance makes it more expensive. Since Congress passed the Health Insurance Tax (the HIT), it has loomed over the market and contributed to health plan premium increases whenever it’s in effect. Fortunately, our elected leaders recognized the many harms of the HIT and they put it on hold.

The HIT will, however, automatically come back for next year’s open enrollment. Unless we want today’s stabilizing rates to be a short-term reprieve, lawmakers must extend the HIT suspension.

There is a push to get this done ASAP. Uncertainty about the HIT is complicating small companies’ long-term budgeting. Business owners know from experience that the HIT is expensive. It translates into an average $500 rate increase per employee on a company health plan. The corner store or a local manufacturer can easily see the HIT cost them $10,000 or more per year. And Congress structured the HIT to increase over time, so the impacts only get worse.

The natural response to the HIT is to cut back on other spending, such as raises or hiring. It would be unfortunate to see that happen now. Not all Maine families have yet benefited from our extended economic expansion. Our state needs to sustain growth to deliver wage increases and other improvements for every worker. To do that, job creators must feel empowered to invest in their employees and their companies.

Prompt passage of a HIT delay bill can help inspire such confidence. That’s the idea behind the Health Insurance Tax Relief Act of 2019 (H.R. 1398 / S. 172). It would continue the current HIT suspension through 2022, providing peace of mind for some time to come.

This legislation is most important to working families. With the HIT on hold, employers won’t face the same financial pressures to reduce the quality of their health plan or pass more of the costs on to workers in paycheck deductions. And without HIT-related premium increases, self-employed people and individuals who purchase their own family health plans are far less likely to be priced out of good insurance.

As a state legislator, I can also say that HIT relief would make our jobs on the Maine State House Health Care Committee a little easier. We are striving to enhance Maine’s health insurance market and bring down prices. Having the federal government work against us is frustrating, to say the least, and we’d be glad to see the end of this health insurance tax.

The fact is, tax policy does more than raise money for the government. Lawmakers must be cognizant of the downstream effects of any taxes they impose on the American people. The HIT makes health insurance less accessible, harms local businesses, suppresses hiring and wage growth, and burdens families with more health care costs.

The Health Insurance Tax is unfair and unnecessary, and it should stay on hold.

Rep. Josh Morris represents House District 75. He lives in Turner.

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