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America's Health Insurance Plans wants to spike the ACA's industry tax. Photo: Bob Herman/Axios

The health insurance industry is lobbying yet again for a delay of the Affordable Care Act's tax on insurers, but experts say that wouldn't benefit consumers as much as it might seem.

Why it matters: Insurers argue the tax gets passed onto enrollees, and the threat of higher premiums has spurred Congress to suspend the fee twice already.

The ACA included the health insurance tax as a way to pay for the law's coverage expansion. The logic was that insurers would be getting new, subsidized customers, and in exchange they would pay a fee.

  • The tax was delayed for the first time for the 2017 plan year, which has led to a recurring lobbying blitz to keep the tax off the books. The tax was suspended again for 2019.

What they're saying: Insurers and many Republicans argue the tax results in people paying more for their coverage and that it should not reappear in 2020.

  • "All taxes, just like sales tax for example, are passed through to consumers in the form of higher premiums," Kristine Grow, spokesperson for America's Health Insurance Plans, said in a statement.

Between the lines: Insurers do pass on the cost of the tax through higher premiums, when it’s in effect: Actuaries say the tax leads to premiums being 1-3% higher than they would be otherwise.

  • When the tax is paused, consumers avoid that premium increase, but insurers don’t pass on all of the tax savings through lower premiums. They keep a lot as profit.

Yes, but: An ACA provision that caps insurers' profits prevents them from keeping too much as profit, said Andy Slavitt, who ran ACA programs for part of the Obama administration.

  • "They may say they are, and they may certainly do it upfront, but they will have to give rebates to consumers,” he said.

By the numbers: Three of the country's largest health insurers — Anthem, Cigna and UnitedHealth Group — will collectively pocket more than $500 million in savings next year from the ACA's tax holiday, to shareholders' ultimate benefit. Their savings, according to an analysis of Wall Street forecasts:

  • UnitedHealth Group: $365 million
  • Anthem: $104 million
  • Cigna: $50 million

Insurers should be able to handle the tax now that the ACA markets, in particular, have stabilized, Slavitt said.

  • "There was at least a decent argument to be made in 2015, 2016 that maybe you delay it until the markets are at some equilibrium where they're competitive and profitable," he said. "Now that they're competitive and profitable, that argument isn't as strong."

The big question: Whether Democratic gains in the midterms would make Congress less likely to delay the tax again.

  • "I can think of a few other ways to spend over $10 billion that don’t involve lining insurance company pockets without a demonstrable benefit to consumers," a Democratic aide said.

Go deeper

Rideshare companies say driver shortage is pushing prices up

Illustration: Sarah Grillo/Axios

It's not just you: Uber and Lyft rides are more expensive, company executives said this week.

Why it matters: Demand for rideshare is roaring back as the economy starts to reopen, but the same can't be said for drivers on the apps. That means fewer cars on the road, causing a supply gap that's pushing up prices.

Pelosi slams GOP leadership's moves against Liz Cheney

U.S. House Speaker Nancy Pelosi. Photo: Al Drago/Bloomberg via Getty Images

House Speaker Nancy Pelosi this week condemned Republican efforts to oust Rep. Liz Cheney (R-Wyo.) as House GOP conference chair.

Why it matters: A number of Democrats have spoken out against attempts to punish Cheney for her criticism of former President Trump, framing the discussion as one essential to the maintenance of American democracy.

What to watch in AMLO's meeting with Harris

Three Mexico national guardsmen stand in front of the metro overpass that collapsed onto a busy highway. Photo: Julián Lopez/ Eyepix Group/Barcroft Media via Getty Images

Joint efforts to stem the increased number of migrants heading to the U.S. will likely be at the top of discussions when Vice President Kamala Harris and Mexico President Andrés Manuel López Obrador hold their virtual meeting on Friday.

The big picture: The U.S. government has consistently asked its southern neighbor to prevent immigrants from reaching the border, mostly through threats like former President Trump’s talk of tariffs.