Posted on 12/04/2013 1:45:41 PM PST by markomalley
The Obama administration quietly finalized the Health Insurance Tax (HIT) over the Thanksgiving holiday weekend, a provision in Obamacare that will cost nearly $60 billion over the next five years and raise health care premiums by 3 percent.
The final rule, published on Nov. 27, imposes a fee beginning in 2014 for health insurers with premium revenues over $25 million per year. The annual tax is levied for “United States health risks,” and is hidden from consumers since it is directly assessed on health insurance companies.
David R. Burton, a senior fellow in economic policy at the Heritage Foundation, said the tax will disproportionally impact small businesses.
“Most large corporations self-insure,” Burton told the Washington Free Beacon. “They may or may not have stop-loss insurance. Medium-sized businesses will self-insure but then have what’s called stop-loss insurance so that if their claims exceed a certain amount the insurance company will compensate them. The largest corporations are self-insured, period.”
“In contrast, small companies actually buy health insurance and it’s only the actual health insurance that is subject to the tax, self-insured plans are not,” he said.
An analysis by the American Action Forum found that under the tax, premiums for small businesses and households will increase as much as 3 percent over the next ten years, or roughly $5,000 per family over the decade.
According to the Business Council of New York State, the average family will see a $270 increase in their premiums in 2014. Over the next decade, the tax will cost families $5,080.
“Some of the more problematic issues of the tax are that revenue raised by the tax does not even directly fund new health care benefits but instead goes into the general treasury,” the Business Council said. “Additionally, small businesses will pay a disproportionate share of these taxes since these employers are far more likely to purchase insurance rather than self-insure.”
The final rule sets explicit revenues that the tax must generate each year, beginning with $8 billion in 2014. The government will collect $11.3 billion from the HIT in 2015 and 2016; $13.9 billion in 2017; and $14.3 billion in 2018, a total of $58.8 billion over five years. Thereafter, the tax will be increased subject to premium growth.
“It’s an odd sort of tax,” Burton said. “It’s not at a specific rate, but it raises a specific amount of revenue from insurers who underwrite health insurance outside of the exchanges. You basically have a set amount of money and then it’s allocated among the insurers based on the amount of health insurance premiums they actually wrote.”
The tax is also hidden from consumers. “They won’t see it,” Burton said. “It’s in effect hidden because it’s imposed on the insurance companies, but it’s a cost to them that they have to recover by raising premiums.”
Burton said estimates for premium increases range from 2.5 to 3 percent. The health insurance tax joins the list of Obamacare tax increases, including the medical device tax, payroll taxes, an excise tax on “Cadillac plans,” and others.
“It’s just one more way they’re raising the cost of employing people,” Burton said. “It’s hidden so people don’t really understand why, that’s probably one of the more insidious aspects of it is that it’s hiding the true effect of it because of the way it’s structured.”
“If people saw that 3 percent tax on their bill every month they would feel differently about it,” he said.
““It’s an odd sort of tax,” Burton said. “It’s not at a specific rate, but it raises a specific amount of revenue from insurers who underwrite health insurance outside of the exchanges. You basically have a set amount of money and then it’s allocated among the insurers based on the amount of health insurance premiums they actually wrote.”
The tax is also hidden from consumers. “They won’t see it,” Burton said. “It’s in effect hidden because it’s imposed on the insurance companies, but it’s a cost to them that they have to recover by raising premiums.”
Well no wonder they expect many more cancellations next year..
Thanks markomalley.
this will simply be passed on to the consumer.
folks, it’s time for a revolution.
They probably haven’t got the software to collect it.
Obama Socialized Health Insurance Tax is known as OSHIT.
RINO Socialized Health Insurance Tax will be known as RSHIT.
Would OSHIT or RSHIT be better?
The answer can be found in a quote from the most admired woman in America:
“What difference, at this late date, does it make?!”
“Tell that to our REPUBLICAN Governor, who just slapped a huge tax increase on oil companies”
That would be John Kaisch of Ohio. There was a large tax increase but the increase brought the tax in line with what other states charge and the income tax continues to drop under Kaisch.
Furthermore, the tax is paid by either the landowners where the fracking is done, the oil companies or by the consumers of oil.
The landowners are getting up to 5000 an acre plus 18% of whatever comes out of the ground, the oil companies are also doing well and the consumers are mostly outside of Ohio.
Increasing this tax is ok by me especially when couple with a decrease in the income tax and elimination of the state inheritance tax.
“The Congress is hapless. They are fools of the 10th degree. Unable to do anything. They are cowards. They are traitors to the Republic. The Dimwits and the RINOparty “
The democrats believe in socialism. The republicans do not have the votes to stop obama and even worse, for most of the past 5 years of Obama, the repubicans did not even have the support of the public who sided with Obama.
Blame the public, because the republicans have very little power.
WTF? $5k/.03 = $167k.
Pure Insanity.
Taxation is theft.
Virtual retardation.
- “All this for a damn fag!” - Moochelle Osama-Obama
How is the administration “finalizing” anything tax related without Congress involved? The executive branch is patently over-reaching on this.
Amen.
It doesn’t seem accurate that those taxes could possibly raise a half trillion dollars. Right now the total revenue between ALL taxes is somewhere north of 2.5 trillion.
Yes, you can blame the public. HOWEVER, you can BLAME the RINOs also just as much. They caved, they joined the socialists in their agendas, and etc. etc. etc. The republicans made their own beds. Their beds were in bed with the commies. It is not as if they were victims or something.
“An analysis by the American Action Forum found that under the tax, premiums for small businesses and households will increase as much as 3 percent over the next ten years, or roughly $5,000 per family over the decade.”
And you know it will be a helluva lot more than that.
In reality, it merely enlists them as tax collectors, who collect the money from us.
Americans are so fortunate to have president who works for them on Thanksgiving Day after pardoning a turkey.
He is one prize turkey who should never be pardoned, but needs to be incarcerated as soon as possible.
Odumbicare is targeted at White MEN. It will, when they are unable to afford the ACA, kill them and their wives and children LITERALLY.
ONE PROBLEM
WHITE MEN HAVE GUNS.
I’D SAY....after the first wave of 2014 employee cancellations hits in 2014, and the first wave of white children die, you will see the first wave of violence...and it will be called DOMESTIC TERRORISM. ....and this Nation will be attacked by its own police and military AND FOREIGN TROOPS. .....
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.