Idiots gonna get us all killed. This is what happens when a community organizer gets involved.
Starting next year, insurance companies will have to remit $8 billion to the federal treasury. The tax climbs to $11.3 billion in 2015 and 2016, to $13.9 billion in 2017, and to $14.3 billion thereafter.
Insurance companies will pay based on their share of industry revenues in a given year — the more revenue, the bigger the hit.
And although insurers are responsible for paying it, there’s no question that the tax will “be largely passed through to consumers in the form of higher premiums for private coverage,” as the non-partisan Congressional Budget Office put it.
Those are just averages. Individuals and businesses in some states will pay far more, according to Oliver Wyman’s research. Small businesses in West Virginia, for example, will have to deal with more than $9,000 in added costs for a family plan over the next decade. Those in Nebraska will get hit with almost $8,000 in new costs.
Seniors and state governments will pay the tax, too.
The cost of the private Medicare Advantage plans that about a quarter of seniors currently enjoy is set to rise nearly $3,600 over the next ten years, thanks to the tax. In Florida, for example, seniors will pay an additional $4,000 in premiums.
Costs for the Medicaid managed care plans that cover nearly three-quarters of the program’s beneficiaries will rise by more than $1,500 per enrollee over the next decade.
Obamacare’s premium tax will also distort the insurance market by tilting the playing field heavily against for-profit insurance companies like WellPoint, UnitedHealthcare, and Aetna.
Unlike just about every other tax they pay, for-profit insurers won’t be able to deduct the premium tax from their earnings. So a good chunk of their income will effectively get taxed twice — once to satisfy Obamacare’s premium tax, and then again when they pay the corporate tax. That means they’ll have to raise premiums even higher.
Non-profit insurers like Blue Shield of California don’t pay income taxes, so they won’t face this double whammy when paying the premium tax.
What’s more, the law exempts non-profits that do 80 percent or more of their business with the government from the premium tax altogether. That gives non-profits an even bigger leg up against their for-profit competitors.
And it’s not as if non-profit insurers are barely scraping by. Blue Shield of California, for instance, had reserves of $3.9 billion in the last quarter of 2012 LINK