Tax Provisions in Health Care Legislation

September 21, 2012 | Roger McEowen and Joe Kristan

Late on the night of March 21, the U.S. House, with a very slim and partisan vote (no Republicans supported the legislation) and despite bipartisan opposition and significant lack of public support, passed H.R. 3590, the Patient Protection and Affordable Care Act (Act). The $938 billion Act was signed into law on March 23 as Pub. L. No. 111-148.  The Act significantly overhauls the nation’s health care system. The Congressional Budget Office has estimated that the Act will extend health insurance coverage to more than 30 million previously uninsured persons, with about 15 million of those being covered under Medicaid by 2019.

Note: On January 19, 2011, the House voted to repeal the Act by a 245-189 vote. The repeal bill, H.R. 2, "Repealing the Job-Killing Health Care Law Act," fell four votes short of being considered by the Senate.

The Act represents the most significant social legislation enacted in decades and, as estimated, contains over $400 billion in tax increases that have the potential to impact all individuals and business in the U.S.  The administrative cost of the Act itself is over $1 billion. In addition it has already been projected by the non-partisan Congressional Budget Office (CBO) that the Act will trigger an average nationwide increase in health insurance premiums for many families of $2,100 per family as a result of fees, taxes and economic incentives in the legislation.

A few days after passage of the Act, the House and Senate approved the Health Care and Education Reconciliation Act of 2010 (Reconciliation Bill), H.R. 4872, which contains certain amendments to the Act.  The following is a summary of the most significant tax provisions in the Act and Reconciliation Bill.  

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