What Is Bernie Marcus Talking About?
"Consider the 'fee' - really a hidden sales tax - that all health-insurance companies have been forced to pay since the first of this year on premiums for policies sold to individuals and small and medium-size businesses. The health-insurance tax - known as HIT in business circles - is expected to generate revenues of about $8 billion this year and as much as $14.3 billion by 2018, according to the legislation."
So, what's the HIT? Even the initials make it sound a little threatening. Here's how Aetna describes it in one of their flyers:
"Many of these new entrants (health insurance purchasers) are lower-income families and individuals who may not have coverage today and who will receive federal subsidies toward the purchase of insurance.
"The ACA established a fee to help fund these subsidies. The fee will be assessed on health insurers beginning in 2014 and will not expire unless federal legislative changes are made.
"The federal government will collect these amounts from health insurers to pay for the subsidies
- 2014: $8 billion
- 2015 and 2016: $11.3 billion
- 2017: $13.9 billion
- 2018: $14.3 billion
- Years after 2018: preceding year amount increased by the rate of annualized premium growth
The Health Insurance Providers fee (HIP, not HIT) will help pay for the subsidies (tax credits) that will help make health insurance plans more affordable for more people. Remove the fee, and you either increase the federal deficit to keep the subsidies in place, or you make health insurance plans less affordable for people, particularly people with lower incomes, by eliminating the subsidies. This would suit Bernie Marcus just fine, since he has been railing against Obamacare for years now.
What about the claim that people "will be paying much higher premiums because of this tax"?
Not according to this 2013 report:
"Intense price competition among health plans in the marketplaces for individuals has lowered premiums below projected levels.
"In an analysis of plans offered in the marketplaces, the McKinsey Center for U.S. Health System Reform found that new entrants into the market make up 26 percent of all insurers. These new entrants are introducing competitive pressures into the individual market. The McKinsey analysis found that new entrants tend to price their plans lower than the median premiums in their market."
More people can afford health insurance, thanks to Obamacare. People who already have insurance are getting a better deal, thanks to Obamacare.
more information about the Health Insurance Providers Fee: http://www.irs.gov/Businesses/Corporations/Affordable-Care-Act-Provision-9010