TRENTON, N.J. – Democrats pushed a new $300 million tax on health insurance through Senate and Assembly committees Thursday against Republican objections.
“As business creep to the precipice of collapse its deplorable that Democrats are oblivious to it,” said Robert Auth (R-Bergen). “Everyone on the committee agreed that there are problems with this bill but Democrats are moving it. It’s the height of hypocrisy to tell the public you have concerns and turn around and support it anyway.”
The bill (A4389/S2676) attempts to replace a federal tax which was repealed on a bipartisan basis in Congress for the very same reason that Republican lawmakers opposed the bill: it raised the cost of coverage. It advanced from the Assembly Financial Institutions and Insurance and Senate Commerce committees.
“Only in Trenton could the argument be: taxing insurance will lower health care costs,” said Assemblyman Christopher DePhillips (R-Bergen). “This legislation is tone deaf and couldn’t come at a worse time for consumers and businesses. We are in the middle of a pandemic with countless residents on unemployment, businesses closing, and residents no longer able to stay in New Jersey.”
The Kaiser Family Foundation found that the average family premium in New Jersey in 2018 was $22,294 per year. A 2.75 percent tax will become on average a $613 increase in premiums for a New Jersey family. Moreover, the proposed new state tax differs from the sunsetting federal tax by including Medicare supplement coverage, MEWAs, and other types of coverage and by increasing the tax rate to 2.75 percent, which is a broader base and higher rate than the repealed tax.