How Will Obamacare’s Health Insurance Tax Affect You?

Health Insurance Tax Impact

American’s have made their presidential choice for the next 4 years.  As dad tried to teach me, “You make your choices and live with the consequences.”

With the re-election of Barack Obama, the chances of Obamacare being repealed are very small.  Small areas of the law will probably be tweaked but it is unlikely that huge elements, like the new “fees” to health insurance companies, will be changed.

There are a couple of bills that have been introduced in the House of Representatives to remove those new “federal sales taxes” for health insurance.  As long as Harry Reid controls the Senate and Barack Obama controls the White House, I believe that those efforts are only for show.

The PPACA, perhaps the most controversial legislation of my life-time, is the law of the United States.  People can grumble and complain all they want, however, the Supreme Court has upheld Congress’s right to levy new taxes and the presidential election last month reaffirmed that America is willing to follow the trail Barack Obama is blazing for another 4 years.

As my father taught me, America has to live with the consequences of the choice they make.

Obamacare requires health insurance companies to pay billions of dollars in new fees starting in 2014.  Congress, and the president, spin that new requirement by saying the fee is not on the American people but on the “greedy” insurance companies.

Those Americans who do not believe that the insurance companies will pay those fees without passing them down to us insured members are naive.  Every industry that has to pay “fees” to government add the cost of those fees into the price their customers pay.  There is no reason to think that insurance companies will not do the same.

The insurance industry expects that the national average increase for health insurance premiums as the result of this new fee will be 2 – 2.5%.  That does not include the other premium drivers.  The chart above shows the expected impact the new fees will have on citizens who live in the top 10 affected states. 

When it is all said and done, I will not be surprised if the rates for my clients with individual family plans is increased by 40 – 60%.  My advice to all my clients, regardless of their political leanings, is the same.