[Video - 10min]
Time is running out for the return of an Obamacare tax that can certainly hit older Americans on fixed incomes particularly hard. This tax could cost seniors an extra $500 per couple. Boomer Couples Face Return of Obamacare Tax in 2018.
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Congress hasn’t taken action to delay or eliminate the tax before Jan. 1, when a moratorium on it expires. In 2015, Congress acted on a bipartisan basis to postpone the tax, which dates to President Barack Obama’s second year in office.
“It’s not just seniors, but clearly seniors are more financially strapped. And $500 per couple might not seem like a lot, but for seniors on fixed incomes, my heavens, it’s a real problem,” reported Jim Martin, chairman of the 60 Plus Association, a conservative organization for senior citizens.
The estimated average of $500 per couple is based on an October study by Oliver Wyman Health, a health research firm that says the tax would mean a “$255 increase per Medicare Advantage member (including Special Needs Plans and Employer Group Waiver Plans).”
Medicare Advantage is a supplemental benefits program in which more than 100 private insurers compete for customers within the federal Medicare program. It covers about one-third of all Medicare beneficiaries.
In 2010, when Democrats in Congress passed the Affordable Care Act, better known as Obamacare, the lawmakers included what the Internal Revenue Service calls the “health insurance provider fee.” Opponents call it the “health insurance tax,” or HIT.
The fee is a tax on health insurance companies, but the nonpartisan Congressional Budget Office projected the tax “would be largely passed through to consumers in the form of higher premiums for private coverage.”
“The bottom line is that HIT is a $12 billion tax annually on health insurance companies,” Martin said. “Guess what the companies are going to do? They’re going to pass it on.”
The 60 Plus Association launched a $500,000 TV ad campaign in November calling on Congress to block the Obamacare tax.
The tax collected $8 billion from insurers after going into effect in 2014. The tax doesn’t have a specific rate, but is set to grow every year based on the rate of growth in premiums. The Department of Health and Human Services sets the rate each year based on what it considers needed revenue.
Congress imposed the moratorium on the tax in 2015 to slow the rise in insurance premiums.
“The HIT tax is applied to all private health insurance plans, but its impact on the senior population will affect those on a fixed income and [who have] less capacity to absorb higher taxes,” Robert Moffit, a senior fellow in health policy at The Heritage Foundation, reported.“
Is this another instance where President’s Obama hands were tied, and this was a compromise to get the ACA passed?