Mr. Durbin said the nonprofits deserve the tax break.
“They are nonprofits for a reason. They are trying to keep the cost of health care down,” he said.
Critics of the exemption say the nonprofits would be granted an unfair advantage in the insurance marketplace, as the excise tax pushes up the cost of doing business and premiums at for-profit insurance companies.
The Congressional Budget Office concluded that the cost of the excise tax likely will be passed on to business and individual consumers in the form of higher premiums.
Consumers in states where the health insurance market is dominated by for-profit companies would pay higher premiums than people in other states where most get coverage from nonprofits.
In Georgia, 91 percent of residents get health insurance from for-profit companies. In Nevada and Maine it is 87 percent and in Ohio 85 percent, according to health industry analyst HealthLeaders-Interstudy.
Those state’s consumers could end up with higher premiums than people in Minnesota, where 91 percent are insured by nonprofits, or Michigan, where 76 percent use nonprofit companies.
A legal analysis of the Levin amendment for Wellpoint Inc. cited a potential violation of the Constitution’s uniformity clause that commands that “Duties, Excises and Imports shall be uniform throughout the United States.”
Rather than applying the tax uniformly across the country, the exemption would result in the excise tax’s application and effect to vary greatly from state to state, said a memo to Wellpoint by the law firm Akin Gump Strauss Hauer & Feld.
The Times obtained a copy of the memo.
Blue Cross Blue Shield Association, the lobbying arm of the health insurance companies, did not respond to a request for comment.
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