ACA Impact, Part 4: $3.89 Billion in New Insurance Taxes Over 10 Years

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I have written many times before on this blog about individual provisions in the ACA/ Obamacare and their impact on Massachusetts.

Some examples include:

While state government is struggling with the many choices under the new law, they are myopically focused on the impact on the state budget and state agencies. Very little time has been spent looking at the impact on private individual citizens and their employers.

The truth is that the ACA will make insurance more expensive for many people in Massachusetts. Moreover, many of the new taxes in the law fall more heavily on residents of the Commonwealth when compared to other states.

The latest example is the tax on insurance companies that offer fully-insured coverage. The taxes will be collected beginning in 2014. The excise tax extends to Medicaid Advantage and Medicaid Managed Care plans. AHIP just released a state-by-state breakdown of the cost conducted by Oliver Wyman.

So how much will be passed onto consumers in the form of higher premiums?

An estimated $3.85 billion to $3.89 billion from 2014 to 2023.

According to SHNS($):

The report estimates that the tax could reduce future private sector employment over the next 10 years by 159,000 jobs, and reduce sales nationwide by $18 billion.

Insurance Tax Impact

Put another way by SHNS:

Families purchasing health plans through the private market would pay on average $9,937 more over the next 10 years for their plans, second only to New York, while family coverage offered through Massachusetts small business would rise by $7,895 over that period.

Most proponents of the law write these provisions off as “worth it” to help the bill become law.

AHIP video on the national implications:

More to come on the impact of the following taxes on Massachusetts residents over the next few weeks….

  • Medical Device Tax
  • Patient-Centered Outcome Research Fee
  • Medicare Hospital Insurance tax
  • Net Investment Income Tax
  • Drug Tax

Find me on Twitter: @josharchambault