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That tax doesn't take effect until next year, when other major provisions like the so-called "individual mandate" and insurance subsidies also kick in. But that hasn't stopped insurance companies from charging higher premiums this year to cover the hike, as well as the cost of ObamaCare benefits such as free birth control and preventive care. Premiums for individuals and small businesses are projected to increase due to the tax by roughly 2 percent this year and by as much as 3.7 percent in 2023, according to a widely cited analysis by the insurance industry.
Officials will argue about who is to blame for the hike -- insurance companies for sticking customers with the cost, or the government for imposing the industry tax hike in the first place. But the projected increases are the latest sign that Americans, in exchange for expanding and strengthening insurance coverage, will in many cases be paying more.
Already, a pair of taxes has hit higher-income households to cover the law. Those making more than $250,000 are seeing a .9 percentage point increase in their Medicare tax, and another 3.8 percentage point hike on investment income. "The goal was to make health care more affordable, but adding a tax on health insurance does the opposite, increasing the cost for families and small businesses," Robert Zirkelbach, spokesman for the group America's Health Insurance Plans, said Tuesday.
Zirkelbach and others on the side of insurance companies say younger Americans will be among those facing the largest increases. The looming tax on the insurance industry will cost health-insurance providers $8 billion in 2014, then $14.3 billion in 2018 and a total $100 billion over the next 10 years, according to the congressional Joint Committee on Taxation.
Insurance companies say they can start charging the higher premiums now because some polices bought in 2013 extend into 2014. State insurance commissioners say that practice is OK so long as the increases are pro-rated for next year. However, California Insurance Commissioner David Jones told Politico the company Anthem BlueCross is collecting money from customers that it "doesn't have to pay until 2014."
Read more: Premiums set to rise this year in run-up to ObamaCare tax on insurance industry | Fox News
The Obama administration is re-branding the central component of its signature healthcare law. The Health and Human Services Department suddenly stopped referring to insurance “exchanges” this week, even as it heralded ongoing efforts to prod states into setting up their own. Instead, press materials and a website for the public referred to insurance “marketplaces” in each state. The change comes amid a determined push by conservative activists to block state-based exchanges in hopes of crippling the federal implementation effort.
Dean Clancy, the director of healthcare policy at FreedomWorks, said HHS’s decision to ditch the “exchanges” label shows that opponents of the healthcare law are succeeding. “I think the patient-centered care movement can chalk up a minor victory here,” he said. “If they’re trying to re-label, it means they’re flailing.” FreedomWorks runs a website, blockexchanges.com, that’s trying to build grassroots opposition to the insurance markets. The effort has taken on heightened importance in the wake of President Obama’s reelection, which killed off any chance of repealing “ObamaCare” in Congress.
Nearly every Republican governor has rejected a state-based exchange, although some could end up working in partnership with the federal government. Even Republicans who had previously seemed open to the idea have since said they wouldn’t pursue their own exchanges, instead leaving the task up to HHS.Changing the name to “marketplaces” won’t make any difference, Clancy said. “They could call them motherhood or apple pie, but it wouldn’t change our feelings about them,” Clancy said. “We're encouraged that they're showing signs of desperation. I think that it’s too late in the game to try to start calling this something different. And [we’re] not going to spend a lot of effort fighting over a word.”
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