FORBES: But Massive Obamacare Sales Tax Increase
http://www.forbes.com/sites/realspin...is-on-the-way/
The same liars who said this isn't TAX now talking about this largest TAX increase as if its nothing. How do these people sleep at night?
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The Unsung, But Massive Obamacare Sales Tax Increase That Is On the Way
Today, America’s Health Insurance Plans (AHIP) President Karen Ignagni issued a press release in support of bipartisan legislation (H.R. 1370, S.1880) co-sponsored by Rep. Charles Boustany (R-LA) and Jim Matheson (D-UT) to repeal the Affordable Care Act’s (ACA) health insurance tax. While much of the dialogue on healthcare reform centers on the federal mandate of health coverage for all Americans – which many conservatives call the largest tax increase in U.S history – less attention is being given to the massive sales tax increase on the purchase of health insurance also implicit within the legislation that will dramatically escalate costs for employers and consumers.
In 2014, Obamacare will take effect, with many of the changes set to roll out over the next six months. The U.S Supreme Court narrowly upheld the legislation in a 5-4 ruling in June of last year, with Chief Justice John Roberts controversially justifying his affirmative decision by claiming that the federal mandate is a form of a federal tax, which the government is within its rights to enact. Indeed, there are a number of new taxes that the ACA will bring- twenty one to be exact- but the sales tax on the purchase of health insurance is by far the largest.
The Joint Committee on Taxation released a reportto Committee of Ways and Means Chairman Dave Camp shortly after the Supreme Court ruling thatrecalculates the costs to insurers, consumers and businesses under the new plan. According to their report – which does not include updated scores for the individual mandate, the employer mandate, or certain other revenue effects – the tax increases that remain on the books will cost taxpayers more than $675 billion over the next ten years. Chief among these will be the sales tax on the purchase of health insurance, totaling $101.7 billion, and making it larger than all the other industry-specific taxes combined.
“The health insurance tax will add a financial burden on families and small businesses at a time when they can least afford it, and it should be repealed, ” says AHIP, a trade association representing health insurance industry providers, in today’s call for the repeal of the health insurance tax before it can take affect. As they report,
· Starting next year the ACA imposes a new $100 billion tax on health insurance. The tax will start at $8 billion in 2014, increasing to $14.3 billion in 2018, and will continue to increase each year.
· The health insurance tax is larger than the device tax and the prescription drug tax combined.
· The health insurance tax will increase costs for individuals and families purchasing coverage on their own, small businesses, seniors and people with disabilities enrolled in a Medicare Advantage plan, and state Medicaid managed care plans.
· The health insurance tax is far greater than the minimum penalty for those who choose not to buy health insurance – further incentivizing young, healthy people to forgo purchasing insurance until they need medical care.
President Obama views the tax revenue generated by the health insurance sales tax and the twenty one other tax hikes in the ACA as essential to fund the his expensive Obamacare reform. John C. Goodman, author of Priceless: Curing the Healthcare Crisis (Independent Institute, 2012) and President of the National Center for Policy Analysis, joins AHIP’s Ignani in his dissention of Obama’s costly healthcare tax increases, claiming they are for American families already wrought with worry amidst an economic recession.
“The ObamaCare health insurance tax hits some of the most vulnerable people in our society, including poor people in Medicaid managed care plans and seniors in Medicaid advantage plans. It is also a tax on middle-income families who were promised by this administration that taxes would never rise.”
In fact, Medicare Advantage beneficiaries will see costs rise from $16 to $20 per member per month in 2014 – increasing to between $32 and $42 by 2023. The costs for Medicare Advantage coverage over the next ten years is expected to reach $3,590. Individuals on Medicaid managed care will see increase costs on an average of $1,530 per enrollee between 2014 and 2023.
The Congressional Budget Office (CBO) supports Ignagni and Goodman’s warnings, stating that the health insurance sales tax will be “largely passed through to consumers in the form of higher premiums.” Unfortunately, as Goodman predicts, “this is only one example of many middle income taxes buried in ObamaCare.” The time to repeal and replace is narrowing, with just months now separating us from another massive tax hike that Americans cannot afford.
Lindsay Boyd is Communications Director at the Independent Institute in Oakland, CA.
