Thursday, July 18, 2024
Hawai'i Free Press

Current Articles | Archives

Monday, March 3, 2014
New Obamacare Tax Will add $300 to Insurance Premiums
By NCPA @ 2:09 PM :: 3270 Views :: Health Care

The Impact of ObamaCare's "Annual Fee" Tax

NCPA March 3, 2014

ObamaCare's "annual fee" tax will be passed on to consumers in the form of higher premiums, says Robert Book, a health and economics expert at the American Action Forum.

The Affordable Care Act imposes a tax on health insurance companies that is not set at a fixed percent per policy, but is instead a fixed amount on the entire health insurance industry. The fee will then be allocated to individual companies based upon an insurance company's market share (as measured by total premiums). The text of the statute calls this tax an "annual fee," but it is really a tax. The logic behind this tax is that insurance companies will make money from increased enrollment due to ObamaCare, and therefore should pay more to the federal government.

  • For 2014, the fee is set at $8 billion. That figure rises to $11.3 billion in 2015 and 2016, reaching $14.3 billion in 2018. After that, the amount is based on a statutory formula.
  • The tax applies to individually purchased insurance as well as Medicare Advantage and Medicaid managed care. Employer-sponsored self-insured health plans are exempt, though employer-sponsored insurance purchased from an insurance company is not.
  • Notably, the tax cannot be deducted from an insurance company's federal income taxes. As such, insurers will have to include this tax as part of their profits on which they will pay an additional tax. Book notes that for most for-profit insurers, this means an additional 35 percent income tax on that annual fee tax.

Insurance companies will simply transfer this tax to consumers. Individuals will see their premiums increase due to this tax by $60 to $160 per person in 2014. That number will rise to $100 to $300 by 2018 for the average individual. For family coverage, the increase will reach $476 in 2018.

Notably, these higher premiums will lead some consumers to forgo insurance, increasing the average tax paid by those who remain insured.

Source: Robert Book, "Impact of the Health Insurance 'Annual Fee' Tax," American Action Forum, February 20, 2014.


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii