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We TOLD you so! Thanks! "Who's paying the new Obamacare Tax? You"

Posted by on Aug. 31, 2014 at 1:38 PM
  • 85 Replies
2 moms liked this
Who's paying the new Obamacare tax? You. (From Kaiser Health News, August 30, 2014)

Phil Galewitz, Kaiser Health News

Brendan Smialowski, AFP/Getty Images
States and the federal government will spend at least $700 million this year to pay the tax for their Medicaid health plans.

When Congress passed the Affordable Care Act, it required health insurers, hospitals, device makers and pharmaceutical companies to share in the cost because they would get a windfall of new, paying customers.


But with an $8 billion tax on insurers due Sept. 30 — the first time the new tax is being collected — the industry is getting help from an unlikely source: taxpayers.

States and the federal government will spend at least $700 million this year to pay the tax for their Medicaid health plans. The three dozen states that use Medicaid managed-care plans will give those insurers more money to cover the new expense. Many of those states — such as Florida, Louisiana and Tennessee — did not expand Medicaid as the law allows, and in the process turned down billions in new federal dollars.

Other insurers are getting some help paying the tax as well. Private insurers are passing the tax onto policyholders in the form of higher premiums. Medicare health plans are getting the tax covered by the federal government via higher reimbursement.

State Medicaid agencies say they have little choice but to pay the tax for health plans they hire to insure their poorest residents. That's because the tax is part of the health plans' costs of doing business. Federal law requires states to pay the companies adequate rates.

"This situation results in the federal government taxing itself and taxing state governments to fund the higher Medicaid managed care payments required to fund the ACA health insurer fee," said a report by Medicaid Health Plans of America, a trade group.

Meanwhile, many Medicaid managed-care companies have seen their share prices — and profits — soar this year as they gained thousands of new customers through the health law in states that expanded Medicaid. More than half of the 66 million people on Medicaid are enrolled in managed-care plans.

STEEP COSTS FOR STATES
A KHN survey of some large state Medicaid programs found the tax will be costly this year. The estimates are based in part on the number of Medicaid health plan enrollees in each state and how much they are paid in premiums. States split the cost of Medicaid with the federal government, with the federal government paying, on average, about 57%.

• Florida anticipates the tax will cost $100 million, with the state picking up $40 million and the federal government, $60 million.

• Texas estimates the tax at $220 million, with the state paying $90 million and the federal government, $130 million.

• Tennessee anticipates it will owe $160 million, with the state paying $50 million and the federal government, $110 million.

• California budgeted $88 million, with the state paying $40 million and the federal government, $48 million.

• Georgia estimates the tax on its plans at $90 million, with the state paying $29 million and the federal government, $61 million.

• Pennsylvania predicts the tax will cost $139 million, with the state paying $64 million and the federal government, $75 million.

• Louisiana estimates the tax will cost $27 million, with the state paying $10 million and the federal government, $17 million.

Texas is believed to be the only state that has not yet agreed to cover the tax for its health plans, according to state Medicaid and health plan officials. "The premium tax is just another way that the costs of the Affordable Care Act are pushed down to states and families," said Stephanie Goodman, spokeswoman for the Texas Medicaid program.

Medicaid officials in other states complain that paying the tax reduces money they could have spent on covering more services or paying providers.

DIMINISHING RETURNS?
"I do not feel I am getting anything in return for this," said Tennessee Medicaid Director Darin Gordon.

Officials won't know exactly how much states owe until the Internal Revenue Service sends bills to insurers at the end of August and the Medicaid plans submit those to states.

The health insurer tax is estimated to bring in at least $100 billion over the next decade from all insurers, government auditors estimate.

Most non-profit Medicaid health plans are exempt from the tax, which the trade group says gives the non-profits a competitive edge vying for state contracts. "We consider this tax so badly construed that it should be reconsidered because it makes no public policy sense," said Jeff Myers, CEO of Medicaid Health Plans of America.
The trade group, which represents both non-profit and for-profit Medicaid plans, also opposes the tax because it takes money from Medicaid programs that could be used to pay plans to improve care, he said.

The Centers for Medicare & Medicaid Services declined to comment on how states and the federal government are covering part of the tax.
Timothy Jost, a consumer advocate and law professor at Washington & Lee University in Virginia, said the lawmakers intended to cover the costs of the law by including as many groups paying in as possible.

While it may be unusual for the federal government to essentially tax itself, Jost said, the situation is no different from the federal government paying a contractor to provide a service, then having that contractor use some of those dollars to pay state sales tax or federal income tax.

"This tax should not have surprised anyone, and it should have been worked into contract prices," he said.

Paul Van de Water, senior fellow with the left-leaning Center for Budget and Policy Priorities, said neither health plans nor states should be complaining about the taxes because both are benefiting from the law.

"States are benefiting from the Affordable Care Act because with more people getting insured, it is driving down their uncompensated care costs," he said. He noted that is true even in states that did not expand Medicaid under the health law.
"People always like to get a benefit and not have to pay for it," he said. "If we did not have this tax, we would have had to raise the money somewhere else."

Kaiser Health News is an editorially independent program of the Kaiser Family Foundation
by on Aug. 31, 2014 at 1:38 PM
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Replies (1-10):
DisabledVet
by Bronze Member on Aug. 31, 2014 at 2:00 PM
13 moms liked this

Why take such joy in the fact that once again Americans have been screwed by their legislators?

I don't call it Obama Care because he didn't craft the mess we have. I call it Congress (House & Senate) Care as it was they who created this mess. They who didn't listen to the experts who advised quite a different system. We had a chance to ensure that every American had affordable health care and our legislators dropped the ball.

Some gave all and all gave some. Remember your rights as an American were earned with the blood of others. Don't waste them and please do your duty as a citizen and vote intelligently in every election.


TranquilMind
by Platinum Member on Aug. 31, 2014 at 2:15 PM
6 moms liked this
Who takes "joy" in it? I think it is horrible. It certainly was reasonably foreseeable, but the stupid bought it hook, line, and sinker.

The name is irrelevant. If it walks like a duck, and quacks like a duck...


Quoting DisabledVet:

Why take such joy in the fact that once again Americans have been screwed by their legislators?

I don't call it Obama Care because he didn't craft the mess we have. I call it Congress (House & Senate) Care as it was they who created this mess. They who didn't listen to the experts who advised quite a different system. We had a chance to ensure that every American had affordable health care and our legislators dropped the ball.

Patti-Gee
by Bronze Member on Aug. 31, 2014 at 2:55 PM

Higher reimbursement to who ?    The providers getting paid, then they take the normal adjustment and have to make an additional 2% adjustment.  

Quote:

Medicare health plans are getting the tax covered by the federal government via higher reimbursement.

Lcherniske
by Member on Aug. 31, 2014 at 3:26 PM
I still think it is important for all Americans to have adequate healthcare but the law was written with many loopholes that leaves middle class families having to choose between quitting their job or paying even higher costs out of pocket. Last year my husband took me and our children off his insurance policy at the school since it was well over 10% of our income (22% to be exact). When I tried to enroll in a subsidized plan I was told I did not qualify because I had one available to me and chose to get off it. I was unable to sign back up until this September . My husbands insurance is free ( well under 10% ) but for me and our 2 children we will now pay $753 a month . My husband will now have 3 jobs, working about 50 hours a week while I work 18 hours a week and we will barely be able to get by after the bills, daycare, etc. are paid. It has gotten ridiculous. We will still owe a tax this year for not having insurance because we purchased a temporary catastrophe plan and urgent care family plan for $200 a month rather then paying out of pocket for a plan with a 10,000 deductible for over $500 a month. Honestly, my husband considered quitting his school job and increasing hours at another and losing his retirement plan to qualify us for affordable care act. We decided not to but things will be tight. Still can't figure out why the % of income isn't the cost of covering the entire family or why the affordable care act can't let the schools cover their portion and just contribute an amount toward a plan from a job.
Lcherniske
by Member on Aug. 31, 2014 at 3:27 PM
I still think it is important for all Americans to have adequate healthcare but the law was written with many loopholes that leaves middle class families having to choose between quitting their job or paying even higher costs out of pocket. Last year my husband took me and our children off his insurance policy at the school since it was well over 10% of our income (22% to be exact). When I tried to enroll in a subsidized plan I was told I did not qualify because I had one available to me and chose to get off it. I was unable to sign back up until this September . My husbands insurance is free ( well under 10% ) but for me and our 2 children we will now pay $753 a month . My husband will now have 3 jobs, working about 50 hours a week while I work 18 hours a week and we will barely be able to get by after the bills, daycare, etc. are paid. It has gotten ridiculous. We will still owe a tax this year for not having insurance because we purchased a temporary catastrophe plan and urgent care family plan for $200 a month rather then paying out of pocket for a plan with a 10,000 deductible for over $500 a month. Honestly, my husband considered quitting his school job and increasing hours at another and losing his retirement plan to qualify us for affordable care act. We decided not to but things will be tight. Still can't figure out why the % of income isn't the cost of covering the entire family or why the affordable care act can't let the schools cover their portion and just contribute an amount toward a plan from a job.
momtimesx4
by Silver Member on Aug. 31, 2014 at 3:38 PM
2 moms liked this

Well......as they said, you gotta pass the bill to find out what is in it.

TranquilMind
by Platinum Member on Aug. 31, 2014 at 3:40 PM
1 mom liked this
Yeah, exactly. And the sad part was they were dumb enough to do it.

Quoting momtimesx4:

Well......as they said, you gotta pass the bill to find out what is in it.

Gamer_mom1
by Bronze Member on Aug. 31, 2014 at 5:56 PM
4 moms liked this

I can't take anything you post seriously or as credible


But a right winger calling others stupid.... bahahhaha

coolmommy2x
by Gold Member on Aug. 31, 2014 at 6:46 PM
1 mom liked this
Maybe in the next election cycle, we'll have congresspeople who want to work together to fix it rather than fight each other. Fingers crossed...
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2007mommy2be
by Bronze Member on Aug. 31, 2014 at 6:54 PM
1 mom liked this
I feel so sorry for you. Ugh. I don't understand this healthcare crap. There's things I don't understand, but what I do understand is that this is making it hard on so many Americans and that I don't like. I know what it's like to struggle financially and it can cause other problems for people like crime and suicide.

Quoting Lcherniske: I still think it is important for all Americans to have adequate healthcare but the law was written with many loopholes that leaves middle class families having to choose between quitting their job or paying even higher costs out of pocket. Last year my husband took me and our children off his insurance policy at the school since it was well over 10% of our income (22% to be exact). When I tried to enroll in a subsidized plan I was told I did not qualify because I had one available to me and chose to get off it. I was unable to sign back up until this September . My husbands insurance is free ( well under 10% ) but for me and our 2 children we will now pay $753 a month . My husband will now have 3 jobs, working about 50 hours a week while I work 18 hours a week and we will barely be able to get by after the bills, daycare, etc. are paid. It has gotten ridiculous. We will still owe a tax this year for not having insurance because we purchased a temporary catastrophe plan and urgent care family plan for $200 a month rather then paying out of pocket for a plan with a 10,000 deductible for over $500 a month. Honestly, my husband considered quitting his school job and increasing hours at another and losing his retirement plan to qualify us for affordable care act. We decided not to but things will be tight. Still can't figure out why the % of income isn't the cost of covering the entire family or why the affordable care act can't let the schools cover their portion and just contribute an amount toward a plan from a job.
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