Happy 2014, America! Have some more Obamacare taxes
It’s not just the Obamacare minimum coverage mandates that have caused health insurance premiums to soar. The litany of new taxes that were included in the law haven’t received a lot of attention, despite a $1 trillion price tag, but the New York Post noted this week that insurers are, predictably, passing them on to consumers:
Most insurers aren’t advertising the ObamaCare taxes that are added on to premiums, opting instead to discretely pass them on to customers while quietly lobbying lawmakers for a break.
But one insurance company, Blue Cross Blue Shield of Alabama, laid bare the taxes on its bills with a separate line item for “Affordable Care Act Fees and Taxes.”
The new taxes on one customer’s bill added up to $23.14 a month, or $277.68 annually, according to Kaiser Health News. It boosted the monthly premium from $322.26 to $345.40 for that individual.
The focus on the disastrous rollout of the federal Obamacare exchange website and the millions of health insurance cancellations are important, but they’ve also distracted from other parts of the law — including the tax hikes — that are a bad deal for Americans.
Sure, expanding access to health insurance is a laudable goal. But, ultimately, that’s not what Obamacare is about. It gives the federal government more control over the already heavily regulated health insurance industry. It’s also income redistribution on a massive scale.
Here’s a rundown of the new Obamacare taxes that Americans will be forced to pay in their health insurance premiums at the beginning of the year:
The new taxes and fees include a 2 percent levy on every health plan, which is expected to net about $8 billion for the government in 2014 and increase to $14.3 billion in 2018.
There’s also a $2 fee per policy that goes into a new medical-research trust fund called the Patient Centered Outcomes Research Institute.
Insurers pay a 3.5 percent user fee to sell medical plans on the HealthCare.gov Web site.
ObamaCare supporters argue that federal subsidies for many low-income Americans will not only cover the taxes, but pay a big chunk of the premiums.
Americans also will pay hidden taxes, such as the 2.3 percent medical-device tax that will inflate the cost of items such as pacemakers, stents and prosthetic limbs.
Those with high out-of-pocket medical expenses also will get smaller income-tax deductions.
Americans are currently allowed to deduct expenses that exceed 7.5 percent of their annual income. The threshold jumps to 10 percent under ObamaCare, costing taxpayers about $15 billion over 10 years.
Then there’s the new Medicare tax.
Under ObamaCare, individual tax filers earning more than $200,000 and families earning more than $250,000 will pay an added 0.9 percent Medicare surtax on top of the existing 1.45 percent Medicare payroll tax. They’ll also pay an extra 3.8 percent Medicare tax on unearned income, such as investment dividends, rental income and capital gains.
Neal Boortz, a semi-retired talk show host, frequently tells listeners that “only entity in this country that pays taxes is the individual” because businesses and corporations simply pass on their tax burdens to consumers through the cost of goods and services. The same can be said of regulatory burdens and so on.
So whenever you hear a politician talk about some sort of new tax or fee or some new regulation being imposed on business, this ostensibly means increased costs for the end consumer. There may be some exceptions to the rule, given that some very large businesses can absorb a regulatory cost or tax, but it’s a general rule of economics.
For example, Aetna CEO Mark Bertolini recently explained that his company would pass $1 billion in taxes and fees on to consumers through higher health insurance premiums. That’s in addition to the premium increases for the actuarial benefits and minimum coverage mandates. He explained that the average increase is “anywhere from 30% to 40%.”
Happy New Year, America! Brace yourselves (and your wallets) for Obamacare.