0 Members and 1 Guest are viewing this topic.
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.
