Concern over insurance tax arises with ObamaCare launch - New York News

Concern over insurance tax arises with ObamaCare launch

Posted: Updated:
FoxNews.com -

New Year's Day marks the start of coverage under ObamaCare for millions of people -- but it also marks the start of a massive tax increase which could further inflate premiums.

Beginning Wednesday, the Affordable Care Act imposes an annual fee on health insurers. The fee is projected to bring in $8 billion next year and roughly $100 billion over the next decade, making it one of the biggest under the law.

The health insurance industry has been howling about the "tax" for years, and is trying to rally support for a bill in Congress that would repeal it. The bill, sponsored by Rep. Charles Boustany, R-La., has 229 co-sponsors -- which represents a majority of members in the House.

But the White House will fight any effort to repeal it, and for now the measure is in effect.

On Tuesday, America's Health Insurance Plans President Karen Ignagni warned that the fee will end up hitting consumers in the form of higher premiums.

"Taxing health insurance makes it more expensive and that undermines the goals of health care reform," she said.

The health care overhaul impacts what people pay for health insurance on the individual market in a host of ways.

For some, premiums will rise, but they'll be eligible for subsidies to offset the cost, ultimately bringing down their health care tab. Others, who make too much to qualify for subsidies, will see their health care costs rise. The impact will vary depending on the state, the level of coverage sought and other factors.

Some premiums were already on the rise, in part because insurance companies are being required to cover high-cost patients and offer more benefits; and in part because premiums have been rising for years.

But insurance companies are also expected to raise rates this year and beyond to offset the cost of the insurance industry fee.

An industry-commissioned study by consultant Oliver Wyman estimated that rates will rise in 2014 by up to 2.3 percent for that reason alone. By 2023, the study said, rates could be rising annually by up to 3.7 percent because of the tax.

Such hikes would only increase the strain on individuals and businesses trying to comply with the law's mandate to buy, or provide, insurance -- which, for individuals, kicks in at the end of March.

The primary X factor in 2014 will be enrollment. If droves of young, healthy Americans comply with the mandate and sign up for coverage by the March 31 deadline, it will reduce the need for insurance companies to jack up their rates.

The Obama administration says enrollment has picked up considerably overall since the rocky debut of HealthCare.gov and various state-based exchange sites. At last count, officials said Tuesday more than 2 million people had signed up through the federal and state sites.

But whether the young and healthy will rush in remains an open question. And the administration faces serious political headwinds, including from lawmakers pushing to chip away at the law's various mandates and fees.

Some lawmakers voiced skepticism that the boosted enrollment numbers signal a turnaround for the law. Republicans on the House Energy and Commerce Committee predicted "rate shock" in 2014.

For more information on healthcare plans visit HealthCare.gov.

Follow Us!

  • HealthHealthMore>>

  • Losing the weight without cutting the butter

    Losing the weight without cutting the butter

    If you're trying to lose some weight, or lower your blood pressure, you may be trying to cut the fat out of your diet. Dietician Sylvia Melendez Klinger says some fat is good for you, even butter!
    If you're trying to lose some weight, or lower your blood pressure, you may be trying to cut the fat out of your diet. Dietician Sylvia Melendez Klinger says some fat is good for you, even butter!
  • Dr. Mona: Kids and codeine

    Dr. Mona: Kids and codeine

    Dr. Mona joined us on FOX 32 News at Noon to talk about what codeine is used for in children and why it may be dangerous.
    Dr. Mona joined us on FOX 32 News at Noon to talk about what codeine is used for in children and why it may be dangerous.
  • Drug samples may lead to more expensive prescriptions

    Drug samples may lead to more expensive prescriptions

    Have you ever received free samples of medication at your doctor's office? Dr. Mona Khanna talks about an eye-opening study about how doctors are influenced to prescribe expensive medication.
    Have you ever received free samples of medication at your doctor's office? Dr. Mona Khanna talks about an eye-opening study about how doctors are influenced to prescribe expensive medication.
  • Local NewsLocal NewsMore>>

  • Deep split in Port Authority over unfinished WTC tower

    Deep split in Port Authority over unfinished WTC tower

    Wednesday, April 23 2014 9:03 PM EDT2014-04-24 01:03:40 GMT
    Board members of the Port Authority of New York and New Jersey revealed a deep split Wednesday over the agency's role in effecting the completion of the long-delayed 3 World Trade Center project, with some commissioners lauding the effort and others expressing grave concerns. The discussion at the monthly board meeting offered a rare glimpse into the negotiations that have been going on behind the scenes in recent months.
    Board members of the Port Authority of New York and New Jersey revealed a deep split Wednesday over the agency's role in effecting the completion of the long-delayed 3 World Trade Center project, with some commissioners lauding the effort and others expressing grave concerns. The discussion at the monthly board meeting offered a rare glimpse into the negotiations that have been going on behind the scenes in recent months.
  • God's Love We Deliver virtual bake sale for birthday cakes

    God's Love We Deliver virtual bake sale for birthday cakes

    Wednesday, April 23 2014 6:36 PM EDT2014-04-23 22:36:46 GMT
    God's Love We Deliver provides meals to people in the New York City area who are too sick to shop and cook for themselves. Clients also receive birthday cards that are decorated by local school students. Sometimes a cake is the only birthday gift that God's Love's clients will receive.
    God's Love We Deliver provides meals to people in the New York City area who are too sick to shop and cook for themselves. Clients also receive birthday cards that are decorated by local school students. Sometimes a cake is the only birthday gift that God's Love's clients will receive.
  • Success Academy students waiting for word on new locations

    Success Academy students waiting for word on new locations

    Wednesday, April 23 2014 5:58 PM EDT2014-04-23 21:58:48 GMT
    The mayor's office is saying one thing. The charter schools another. It is a lot of he said, she said. The bottom line is that right now the future of three charter schools is still unclear. Jennifer Duran is afraid because she doesn't know where her two children are going to school next year. Both kids attend success academy Harlem 4, one of three charter schools that still does not have a set location. The other two charters are Success Academy Jamaica in Queens and Success Academy City Hall.
    The mayor's office is saying one thing. The charter schools another. It is a lot of he said, she said. The bottom line is that right now the future of three charter schools is still unclear. Jennifer Duran is afraid because she doesn't know where her two children are going to school next year. Both kids attend success academy Harlem 4, one of three charter schools that still does not have a set location. The other two charters are Success Academy Jamaica in Queens and Success Academy City Hall.
Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices