Members of Generation X believe they will need to save at least $1 million before they can retire. Who can help them save it?
WASHINGTON, Dec. 6 -- America's Health Insurance Plans issued the following news release:
California consumers and employers will face $22 billion in higher health care costs as a result of a new health insurance tax included in the Affordable Care Act (ACA), according to a new state-by-state analysis conducted by Oliver Wyman for America's Health Insurance Plans (AHIP).
The ACA imposes a new sales tax on health insurance that starts at $8 billion in 2014, increases to $14.3 billion in 2018, and will increase based on premium trend thereafter. The Joint Committee on Taxation estimates that the health insurance tax will exceed $100 billion over the next ten years.
"This tax will add a financial burden on California families and small businesses at a time when they can least afford it," said AHIP President and CEO Karen Ignagni.
Ignagni noted that the health insurance tax will increase costs for individuals and families purchasing coverage on their own, small businesses, Medicare Advantage beneficiaries, and Medicaid managed care programs. AHIP supports legislation (H.R. 1370 (http://thomas.loc.gov/cgi-bin/bdquery/z?d112:HR01370:@@@P),S.1880 (http://thomas.loc.gov/cgi-bin/bdquery/z?d112:SN01880:@@@L&summ2=m&)) that would repeal the tax.
The new Oliver Wyman analysis builds upon its 2011 report, "Estimated Premium Impacts of Annual Fees Assessed on Health Insurance Plans (http://www.ahipcoverage.com/wp-content/uploads/2011/11/Insurer-Fees-report-final.pdf)," which provides national estimates on the impact of this tax on health insurance premiums. The previous report found that the health insurance tax "will increase premiums in the insured market on average by 1.9% to 2.3% in 2014," and by 2023 "will increase premiums 2.8% to 3.7%."
The latest report, "Annual Tax on Insurers Allocated by State (http://www.ahip.org/WymanState)," provides per-person and cumulative estimates of the impact this tax will have on individual market consumers, employers, and Medicare Advantage beneficiaries in all 50 states, as well as the impact on state Medicaid managed care programs.
According to this analysis, California consumers and employers will pay between $22.2 and $22.4 billion more over the next ten years as a result of this tax. The range of impact reflects different assumptions about projected enrollment in insurance plans subject to the tax. On average, the tax will raise costs in specific insurance market segments and public programs in California as follows:
* Impact on individual market consumers: Increase premiums over a ten-year period for single coverage by an average $1,954, and for family coverage an average $4,909.
* Impact on small employers: Increase premiums over a ten-year period for single coverage by an average $2,792, and for family coverage an average $6,916.
* Impact on large employers: Increase premiums over a ten-year period for single coverage by an average $2,566, and for family coverage an average $7,141.
* Impact on Medicare Advantage beneficiaries: Increase costs for beneficiaries by an average $3,847 over ten years.
* Impact on Medicaid managed care beneficiaries: Increase the average costs of Medicaid coverage by about $971 per enrollee over ten years.
This Oliver Wyman reports are consistent with previous analyses on how the health insurance tax will impact the cost of coverage:
* According to the Joint Committee on Taxation (http://www.ahipcoverage.com/wp-content/uploads/2011/11/Premium-Tax-JCT-Letter-to-Kyl-060311-2.pdf): "For those insurance premiums that are subject to the fee, we estimate that the premiums, including the tax liability, would be between 2.0 and 2.5 percent greater than they otherwise would be."
* In a November 30, 2009 letter (http://www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf), the Congressional Budget Office stated that "New fees would be imposed on providers of health insurance and on manufacturers and importers of medical devices. Both of those fees would be largely passed through to consumers in the form of higher premiums for private coverage."
For health care reform to work, coverage needs to be affordable and there needs to be broad participation in the health care system. The health insurance tax undermines the goal of affordability. To learn more, visit www.AHIP.org/Affordability.
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