Nancy Pelosi didn’t lie. She said that we wouldn’t know what was in Obamacare until it was passed, and here is another example. Beginning next year and to run through 2016 you will be paying an extra $63-per-head fee to cushion the cost of covering people with pre-existing conditions.
That fee was put into a recent regulation and works out to tens of millions of dollars for the largest companies, employers say. But don’t worry stockholders, most of those fees are likely to be passed on to the employees. Lets just say it is one of next year’s fiscal cliff issues.
Employee benefits lawyer Chantel Sheaks calls it a “sleeper issue” with significant financial consequences, particularly for large employers.
“Especially at a time when we are facing economic uncertainty, [companies will] be hit with a multimillion-dollar assessment without getting anything back for it,” said Mr. Sheaks, a principal at Buck Consultants, a Xerox subsidiary.
Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.
That’s per person, so for example you have five people on your plan, that is an Obamacare tax of $315/year. What was that about not taxing middle class families Mr. President?
The program “is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all,” the Obama administration says in the regulation. An accompanying media fact sheet issued Nov. 30 referred to “contributions” without detailing the total cost and scope of the program.
Of the total pot, $5 billion will go directly to the U.S. Treasury, apparently to offset the cost of shoring up employer-sponsored coverage for early retirees.
The $25 billion fee is part of a bigger package of taxes and fees to finance Mr. Obama’s expansion of coverage to the uninsured. It all comes to about $700 billion over 10 years, and includes higher Medicare taxes effective this Jan. 1 on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8 percent tax on their investment income.
So those people making over $250,000 are already going to pay more taxes this year. The Fiscal cliff talks are designed to raise them even further.
“This kind of came out of the blue and was a surprisingly large amount,” said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, a group that represents large employers on benefits issues.
Word started getting out in the spring, said Ms. Young, but hard cost estimates surfaced only recently with the new regulation. It set the per-capita rate at $5.25 per month, which works out to $63 a year.
The fee will be assessed on all “major medical” insurance plans, including those provided by employers and those purchased individually by consumers. Large employers will owe the fee directly. That’s because major companies usually pay upfront for most of the health care costs of their employees. It may not be apparent to workers, but the insurance company they deal with is basically an agent administering the plan for their employer.
But everyone is scheduled to pay this new $63 per head per year fee–another Obamacare lie brought to you by the lease transparent administration in history.