New tax threatens to increase health insurance premiums
A tax associated with the federal Affordable Care Act could lead to significantly higher health insurance premiums in the U.S., according to a new report from Oliver Wyman, a leading management consulting firm. The report was commissioned by America’s Health Insurance Plans, one of the leading trade groups in the country’s insurance industry. The tax is linked to health insurance and the report suggests that it could end up making the Affordable Care Act less deserving of its namesake.
The federal health care law has introduced a wide range of new taxes, especially for the insurance industry. The law has made significant changes to the insurance industry since it was passed in 2010, and the majority of these changes are meant to provide consumers with better service and better protection. The taxes introduced through the law are meant to generate some $100 billion in revenue for the federal government over 10 years. Though many of the taxes have not yet been enacted, they are still having an influence on health insurance premiums throughout the country.
According to the report from Oliver Wyman, a particular outlined in the law could increase the health insurance premiums for family coverage by as much as $7,000 in 10 years. The increase is expected to be seen throughout the nation, but will have a different impact in each state. Insurers are expected to raise rates for coverage because of the higher administrative costs they are having to deal with, as well as the growing costs associated with medical care and services.
Congress being pressured to repeal tax
Karen Ignagni, President of America’s Health Insurance Plans, suggests that the time is right to focus on lowering the cost of health insurance throughout the country. Ignagni notes that taxing health insurance will have the opposite effect by making coverage much more expensive, especially for families. The health insurance industry is currently pressuring Congress to take steps to repeal the insurance tax that will be enacted through the Affordable Care Act in 2014.
