This reminder from the New York Post came on Christmas, when few paid attention, but it’s worth noting today. The disastrous rollout of ObamaCare is only the appetizer for Americans, the 2013 lead-in to higher costs and fees built into the so-called Affordable Care Act. What most people haven’t heard — yet — is the new fees that ObamaCare charges for access to those higher premiums:
The cost of President Obama’s massive health-care law will hit Americans in 2014 as new taxes pile up on their insurance premiums and on their income-tax bills.
Most insurers aren’t advertising the ObamaCare taxes that are added on to premiums, opting instead to discretely pass them on to customers while quietly lobbying lawmakers for a break.
But one insurance company, Blue Cross Blue Shield of Alabama, laid bare the taxes on its bills with a separate line item for “Affordable Care Act Fees and Taxes.”
The new taxes on one customer’s bill added up to $23.14 a month, or $277.68 annually, according to Kaiser Health News. It boosted the monthly premium from $322.26 to $345.40 for that individual.
These “fees” will add up to a considerable hike, as the Post notes. They include a 2% fee on the plans themselves for consumers, which will eventually raise $14.3 billion a year for the federal government. Insurers are paying a 3.5% fee for participating in the exchange, a cost to the risk pool that will get transferred — as all risk-pool expenses do — to the consumers in the form of higher premiums. The medical-device tax has long been debated, and will also get passed to the consumer.
It’s going to cost consumers at tax time, too. Remember when you could deduct all of your medical expenses if they exceeded the normal threshold for itemization?
Americans are currently allowed to deduct expenses that exceed 7.5 percent of their annual income. The threshold jumps to 10 percent under ObamaCare, costing taxpayers about $15 billion over 10 years.
That means that consumers will pay more for their medical care than ever, thanks to the tax limitation.
That’s nothing new about ObamaCare, though. We’ve been pointing out for years that this is just a wealth-transfer system, not a cost-containment system. It manipulates price to disguise the increased costs, but those are becoming more and more apparent, as USA Today reports today in a piece about the lack of choice for middle-class consumers throughout the country (via David Frum on Twitter):
Those making more than 400% of the federal poverty limit — $47,780 for an individual or $61,496 for a couple — are ineligible for subsidies to buy insurance.
The USA TODAY analysis looked at whether premiums for the least expensive plan in any of the metal levels was more than 8% of household income. That’s similar to the affordability test used by the federal government to determine whether premiums are so expensive consumers aren’t required to buy plans under the Affordable Care Act.
The number of people who earn close to the subsidy cutoff and are priced out of affordable coverage may be a small slice of the estimated 4.4 million people buying their own insurance and ineligible for subsidies. But the analysis clearly shows how the sticker shock hitting many in the middle class, including the self-employed and early retirees, isn’t just a perception problem. The lack of counties with affordable plans means many middle-class people will either opt out of insurance or pay too much to buy it.
The prices of exchange plans have shocked many shoppers, especially those who had plans canceled because they did not meet the ACA coverage requirements. But experts are not surprised.
“The ACA was not designed to reduce costs or, the law’s name notwithstanding, to make health insurance coverage affordable for the vast majority of Americans,” says health care consultant Kip Piper, a former government and insurance industry official. “The law uses taxpayer dollars to lower costs for the low-income uninsured but it also increases costs overall and shifts costs within the marketplace.”
Of course that’s what it is. David points out how the middle class gets hammered:
ACA taxes were imposed only high-income people. But large costs fall on middle class too, in the hidden, kludgey form of rate hikes (5)
— David Frum (@davidfrum) December 26, 2013
"Obamacare is deficit neutral" wasn't technically a lie, but it was highly misleading. Middle class will pay and is paying. (6)
— David Frum (@davidfrum) December 26, 2013
It got sold as a system that bent the cost curve downward, but it only does that with effective price, and only for those who get subsidies. Everyone else gets shafted in the sharp premium hikes and added fees. That’s why 2014 will be a disaster for Democrats, as middle-class voters start figuring it out through their pocketbooks and tax returns.
And that assumes they can sign up at all. Ike Brannon still can’t get enrolled, as he explains at The Weekly Standard:
What I like is that I can access the D.C. exchange in twenty different languages, including Apache, Navajo, and Irish. Which is great because I see so many Irish here who have a heck of a time assimilating, what with the fact that they only speak Irish and not the King’s English. (You can also receive notices in American Sign Language—l’d make a joke here but I might offend the deaf. But I guess since they can’t read and need American Sign Language I might as well let one rip. But I’ll refrain nevertheless.)
Maybe we should blame the federal government for this, but last time I looked (and at one point it was my job to do so) a government entity was only responsible for providing assistance in a foreign language if there was a significant number of people who spoke that language and had no facility with English. Of course, we can all quibble about what “significant” means in this context, but does anyone believe that it is at all conceivable that there are even ten people in the District who speak only Apache and need to buy their own health insurance? I would bet my entire net wealth that the number is, in fact, lower than that, if not zero. Ditto for Navajo and Irish. If there’s anyone in D.C. shopping for health insurance who speaks only German or French and no English I’d be shocked as well.
But while the exchange doesn’t work, at least we can get our messages telling us our application has been “disposed of” in the language of our choice, although to be honest I do not know at all what this message means and English is my mother tongue. Does it mean that I have insurance? I doubt that since I never got to select a plan. Or that I’ve been approved to buy a plan? if so why won’t it let me do so.
In any language, it’s a disaster.