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.
There is no such thing as a tax “hidden from consumers” as this article suggests.
Since the tax is levied upon the insurer and not on the consumer, it's not quite the same as an excise tax.
The lefties will simply accuse the horrible insurers of jacking up their premiums (rather than passing the tax back to the consumer).
Anyone still expecting to put $2500 bucks back "in their pocket" due to ObamaCare is about to have their heart broken. Just another Obamalie.
Well, there are hidden costs in everything we buy.
Gas taxes are one such hidden cost. You pay “X” amount at the pump, but that “X” amount includes 18.4 cents federal tax, and state taxes are added in too. But they aren’t listed separately in the pump price.
Here in California, gas is also subject to sales tax, in addition to federal and state gas taxes. None of these taxes are broken out separately.
In retailing, we all pay hidden charges to compensate for security costs and losses due to shoplifting and inventory “shrinkage”, or employee theft.
In the medical area, we all pay more than we should because healthcare providers are charged such stiff premiums for their malpractice insurance. People such as John Edwards are partly responsible for those costs, with his huge malpractice awards he has gotten.
The end consumer ends up paying all of these taxes and fees in the form of higher prices than would be charged if these taxes and fees did not exist.
The answer to a Obamacare rollout disaster is to...change the message.
Is that similar to the fee that offtrack betting parlors have to pay to the race track?
They are bastards.
No wonder why we had to pass it to find out what's in it... a moving target is ever changing. I think we'll be finding out what's in it via dribs and drabs until the stinking thing is extinguished, sliced, diced, chopped, pureed, pummeled, and then the remainder dropped in acid. Even then, I'd be leery...
Sure there is. The taxes are indirect and a consumer is not levied the tax. There is an estimate of this 3% but who knows what it will actually be. It will be buried in the cost of premiums - thus hidden. Companies don’t really ‘pay’ taxes — they just pass them on to consumers.
Hidden taxes, indirect taxes, laundered taxes - whatever you want to call them - is one of my pet peeves. If taxpayers actually paid a bill each month for all the indirect taxes they actually pay they would be astounded.
Which actually means it will cost $120B+ and raise premiums by 30%...............
does anyone really think premiums will only go up 3% in 5 years when many people are seeing them double?
These people take the ones who get subsidized into account, thats the problem
“In the medical area, we all pay more than we should because healthcare providers are charged such stiff premiums for their malpractice insurance.”
While I agree with your general take, I don’t agree with that statement. The size of malpractice premiums is really quite reasonable for most areas of medical practice if you believe this:
https://www.youtube.com/watch?v=r9q1Id41wGo
Lengthy, about 1 hour, but worthwhile, IMO. I was surprised.
While I am a capitalist and I support the right of insurance companies to operate and to provide insurance; I believe (and you may or may not agree according to your sensibilities) that HC insurance (specifically, the miserable Doc compensation rates provided) is about 65% responsible for excess HC costs. The remainder (again, my opinion) is largely a function of federally and locally-enforced and ratified monopoly structures such as CON laws and the prohibition against importing Rx drugs.
Yes there is.
If you a low-information puke, all you will know is, your insurance premium went up. Meanwhile, when you watch the MSM, you will see Obozo blasting the greedy insurance companies and calling for Single Payer.
The list, Ping
Let me know if you would like to be on or off the ping list
Government can never have too much money.
In Canada taxes are high and you can see up front where your money’s going for example - the provincial-run Ontario Health Insurance Plan.
Its a single payer but none of the charges are hidden from the voters.
Americans are not are as disposed Canadians are to be heavily taxed for health care services and Obamacare pretends there are no new taxes.
Whatever. That’s one reason why support for it is cratering and Democrats are in deep political trouble.
The simple fact is lefties are just plain dumb. Say a leftie is renting a house for $1000 a month from a landlord who bought the house years ago and had paid off the mortgage. Someone buys the properly and the payment is $1200 a month. The leftie expects the new owner to eat the $200. In fact, some of them even think the original owner should split the profits with them.
I have a 36 year old step daughter who simply cannot understand what a mortgage is. She’s not retarded. She’s just dumb and hard headed.
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