Coalition Letter: Stop the HIT and Medical Device Tax

You can view the PDF HERE.


August 10, 2017


The Honorable Paul D. Ryan

Speaker, United States House of Representatives

H-232, The Capitol

Washington, D.C. 20515


The Honorable Mitch McConnell

Majority Leader, United States Senate

S-230, The Capitol

Washington, D.C. 20510


Dear Speaker Ryan & Leader McConnell:


We write to urge you to prevent Obamacare's tax on Americans' health insurance and the medical device tax from going into effect in 2018. Unless Congress acts soon, both tax increases will go into effect on January 1, 2018, leading to higher premiums and higher costs for middle class families, seniors, and small businesses.


Ideally, both the health insurance tax and medical device tax should be repealed permanently, as should all one trillion dollars of Obamacare taxes. However, given the recent collapse of healthcare reform legislation, lawmakers should act to delay these two taxes so they do not hit taxpayers in 2018.


Allowing the health insurance tax to go into effect in 2018 will directly hurt middle and low-income families. Half of the tax is paid by those earning less than $50,000 a year and it will increase premiums by $5,000 per family over the next decade according to research by the American Action Forum.


In total, the tax hits 11 million households that purchase through the individual insurance market and 23 million households covered through their jobs. Next year alone, the tax will total $14.3 billion. Over a decade, these taxpayers will pay roughly $150 billion more if the tax is not repealed.


The health insurance tax is also devastating to small businesses. It is estimated to directly impact as many as 1.7 million small businesses. According to the National Federation of Independent Business, the tax could cost up to 286,000 in new jobs and cost small businesses $33 billion in lost sales by 2023.


The 2.3 percent medical device tax is also harmful to small businesses. There are more than 6,500 medical device companies in the U.S., 80 percent of which have fewer than 50 employees.  The industry contributes $150 billion annually to the economy.  The tax impairs the industry's ability to innovate, invest, and create jobs.


If Congress allows it to go into effect in 2018, the medical device tax could lead to more than 25,000 lost jobs by 2021. Over the next decade, this excise tax is projected to increase taxes by $30 billion.


Small businesses account for half of all jobs in the U.S. and two-thirds of new jobs in recent decades, so the health insurance tax and medical device tax mean businesses are able to spend less on new workers, higher wages, or new equipment.


Absent full repeal, Congress must use the remaining months of the year to delay the health insurance tax and medical device tax so they do not go into effect in 2018 and increase taxes.


American families, seniors, and businesses have already been hurt by the failure to repeal Obamacare's taxes. The last thing taxpayers need is even more taxes to go into effect.




Grover Norquist

President, Americans for Tax Reform


James L. Martin

Founder & Chairman, 60 Plus Association


Leigh Hixon

Senior Director of Policy Relations, Alabama Policy Institute


Lisa B. Nelson

CEO, American Legislative Exchange Council


Ashley N. Varner

Executive Director, ALEC Action


Dan Weber

President, Association of Mature American Citizens


Norm Singleton

President, Campaign for Liberty


Jeff Mazzella

President, Center for Individual Freedom


Chuck Muth

President, Citizen Outreach (Nevada)


Chip Faulkner

Executive Director, Citizens for Limited Taxation Massachusetts


Tom Schatz

President, Council for Citizens Against Government Waste


Katie McAuliffe

Executive Director, Digital Liberty


Richard Watson

Chairman, Florida Center Right Coalition


Annette Meeks

CEO, Freedom Foundation of Minnesota


Adam Brandon

President, FreedomWorks


Grace-Marie Turner

President, Galen Institute


Kelly McCutchen

President, Georgia Public Policy Foundation


Carrie L. Lukas

President, Independent Women's Forum


Heather R. Higgins

President and CEO, Independent Women's Voice


Jenna A. Robinson, Ph.D.

President, The James G. Martin Center for Academic Renewal


Sal J. Nuzzo

Vice President of Policy, The James Madison Institute (Florida)


Stephen Waguespack

President and CEO, Louisiana Association of Business and Industry


Mary Adams

Chair, Maine Center-Right Coalition


Pem & Ruth Schaeffer

Maine Conservative Activists


The Honorable Kurt Zellers

Chair, Minnesota Center-Right Coalition


Henry Kriegel

President, Montanans for Tax Reform


Pete Sepp

President, National Taxpayers Union


The Honorable William O'Brien

Former Speaker, New Hampshire House of Representatives

Co-chair, New Hampshire Center Right Coalition


The Honorable Stephen Stepanek

Former Chairman, Hew Hampshire House Ways & Means Committee

Co-chair, New Hampshire Center Right Coalition


Jack Boyle

Chairman, Northeast Ohio Center-Right Coalition


Jeff Kropf

Executive Director, Oregon Capitol Watch Foundation


Charlie Gerow

CEO, Quantum Communications (Pennsylvania)


Mike Stenhouse

CEO, Rhode Island Center for Freedom and Prosperity


Paul J. Gessing

President, Rio Grande Foundation (New Mexico)


Dr. Deane Waldman

Director, Center for Health Care Policy, Texas Public Policy Foundation


David Williams

President, Taxpayers Protection Alliance



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