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The Unsung, But Massive Obamacare Sales Tax Increase That Is On the Way

Posted by on Feb. 18, 2013 at 7:39 PM
  • 19 Replies

Today, America’s Health Insurance Plans (AHIP) President Karen Ignagni issued a press release in support of bipartisan legislation (H.R. 1370, S.1880) co-sponsored by Rep. Charles Boustany (R-LA) and Jim Matheson (D-UT) to repeal the Affordable Care Act’s (ACA) health insurance tax. While much of the dialogue on healthcare reform centers on the federal mandate of health coverage for all Americans – which many conservatives call the largest tax increase in U.S history – less attention is being given to the massive sales tax increase on the purchase of health insurance also implicit within the legislation that will dramatically escalate costs for employers and consumers.

In 2014, Obamacare will take effect, with many of the changes set to roll out over the next six months. The U.S Supreme Court narrowly upheld the legislation in a 5-4 ruling in June of last year, with Chief Justice John Roberts controversially justifying his affirmative decision by claiming that the federal mandate is a form of a federal tax, which the government is within its rights to enact. Indeed, there are a number of new taxes that the ACA will bring- twenty one to be exact- but the sales tax on the purchase of health insurance is by far the largest.

The Joint Committee on Taxation released a reportto Committee of Ways and Means Chairman Dave Camp shortly after the Supreme Court ruling thatrecalculates the costs to insurers, consumers and businesses under the new plan. According to their report – which does not include updated scores for the individual mandate, the employer mandate, or certain other revenue effects – the tax increases that remain on the books will cost taxpayers more than $675 billion over the next ten years. Chief among these will be the sales tax on the purchase of health insurance, totaling $101.7 billion, and making it larger than all the other industry-specific taxes combined.

“The health insurance tax will add a financial burden on families and small businesses at a time when they can least afford it, and it should be repealed, ” says AHIP, a trade association representing health insurance industry providers, in today’s call for the repeal of the health insurance tax before it can take affect. As they report,

· Starting next year the ACA imposes a new $100 billion tax on health insurance. The tax will start at $8 billion in 2014, increasing to $14.3 billion in 2018, and will continue to increase each year.

· The health insurance tax is larger than the device tax and the prescription drug tax combined.

· The health insurance tax will increase costs for individuals and families purchasing coverage on their own, small businesses, seniors and people with disabilities enrolled in a Medicare Advantage plan, and state Medicaid managed care plans.

· The health insurance tax is far greater than the minimum penalty for those who choose not to buy health insurance – further incentivizing young, healthy people to forgo purchasing insurance until they need medical care.

President Obama views the tax revenue generated by the health insurance sales tax and the twenty one other tax hikes in the ACA as essential to fund the his expensive Obamacare reform.

John C. Goodman, author of Priceless: Curing the Healthcare Crisis (Independent Institute, 2012) and President of the National Center for Policy Analysis, joins AHIP’s Ignani in his dissention of Obama’s costly healthcare tax increases, claiming they are for American families already wrought with worry amidst an economic recession.

“The ObamaCare health insurance tax hits some of the most vulnerable people in our society, including poor people in Medicaid managed care plans and seniors in Medicaid advantage plans. It is also a tax on middle-income families who were promised by this administration that taxes would never rise.”

In fact, Medicare Advantage beneficiaries will see costs rise from $16 to $20 per member per month in 2014 – increasing to between $32 and $42 by 2023. The costs for Medicare Advantage coverage over the next ten years is expected to reach $3,590. Individuals on Medicaid managed care will see increase costs on an average of $1,530 per enrollee between 2014 and 2023.

The Congressional Budget Office (CBO) supports Ignagni and Goodman’s warnings, stating that the health insurance sales tax will be “largely passed through to consumers in the form of higher premiums.” Unfortunately, as Goodman predicts, “this is only one example of many middle income taxes buried in ObamaCare.” The time to repeal and replace is narrowing, with just months now separating us from another massive tax hike that Americans cannot afford.


by on Feb. 18, 2013 at 7:39 PM
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Replies (1-10):
nanaofsix531
by Platinum Member on Feb. 18, 2013 at 7:49 PM

Please send the link to the articles website.

143myboys9496
by Gold Member on Feb. 18, 2013 at 8:05 PM
2 moms liked this

 Just the thought makes me nauseous. I can barely afford to put gas in my car, my taxes have increased, and I'm STILL waiting to be able to refinance my home.

Are we moving forward yet?

 

 

"A government big enough to give you everything you want, is a government big enough to take away everything that you have."---Thomas Jefferson

gsprofval
by Gold Member on Feb. 18, 2013 at 8:14 PM
2 moms liked this

So this is certainly NOT affordable care, is it?

Carpy
by Platinum Member on Feb. 18, 2013 at 8:16 PM
1 mom liked this

http://www.ahip.org/News/Press-Room/2013/AHIP-Supports-Bipartisan-Legislation-to-Repeal-the-ACA%E2%80%99s-Health-Insurance-Tax.aspx

rocketracer
by Gold Member on Feb. 18, 2013 at 8:17 PM
1 mom liked this


http://www.forbes.com/sites/realspin/2013/02/15/the-unsung-but-massive-obamacare-sales-tax-increase-that-is-on-the-way/

(mac - have to copy and paste link into the address bar)


Quoting nanaofsix531:

Please send the link to the articles website.



Carpy
by Platinum Member on Feb. 18, 2013 at 8:18 PM
1 mom liked this

http://waysandmeans.house.gov/news/documentsingle.aspx?DocumentID=301425

grandmab125
by Gold Member on Feb. 18, 2013 at 9:28 PM
2 moms liked this

 We tried to warn you.  This abomination was going to hurt everyone.  Just wait until your hubbies start losing their health insurance.  A lot of smaller companies are already considering dropping it, because it is cheaper to pay a  $2,000 fine per employee than to pay for their health insurance.

rocketracer
by Gold Member on Feb. 19, 2013 at 8:57 AM

bump

4kidz916
by Gold Member on Feb. 19, 2013 at 9:13 AM
3 moms liked this

Not so affordable at all!!  But some of us already knew this.

JustCJ
by on Feb. 19, 2013 at 10:20 AM
3 moms liked this

I'm in an intro to health insurance class this semester...(I took it because I wanted a better understanding of health insurance for my field) and my professor is just maddened by this bill, in fact my first paper is on how the PPACA (patient protection and affordable care act) will change the health insurance industry. She also works in a large hospital in Syracuse NY in the administrative/insurance area I can't remember her exact title but she has her Doctorate, she is projecting bad bad things for not only health insurance but the medical field in general. Scary stuff.

I'm so over being pissed about this to just plain worried. Glad I didn't support it at least.

Quoting gsprofval:

So this is certainly NOT affordable care, is it?


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