Surprise in Obamacare

Obamacare was passed so quickly that, admittedly, lawmakers did not have time to so much as read the multi-volume bill.  Hardly anyone, opponent or proponent, knows everything that Affordable Health Care law will do.  So as it is being implemented over the next two years, we will probably keep getting surprises.  Here is the latest, from the Associated Press:

Your medical plan is facing an unexpected expense, so you probably are, too. It’s a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama’s health care overhaul.

The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers.

Employee benefits lawyer Chantel Sheaks calls it a “sleeper issue” with significant financial consequences, particularly for large employers.

“Especially at a time when we are facing economic uncertainty, [companies will] be hit with a multi-million dollar assessment without getting anything back for it,” said Sheaks, a principal at Buck Consultants, a Xerox subsidiary.

Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.

The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines.

Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems. Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014.

via Surprise: New Insurance Fee in Health Care Reform Law – DailyFinance.

Yes, it’s nice that pre-existing conditions will be covered.  Yet another thing we don’t know (“hard-to-predict”) is how much this will cost.  Normally, businesses–and especially insurance companies with their actuarial charts and calculations–would need to have those figures.  I doubt that $63 dollars per insured person would come anywhere near paying for the nation’s pre-existing conditions.  But at least something is budgeted for it.  Still, this amounts to a tax on everyone with health insurance, whether paid by the company or the insured.  I believe we were told that taxes would only go up for the wealthy.

HT:  Jackie

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • http://theoldadam.com/ Steve Martin

    Don’t worry.

    Obama will take care of us. All is well. There isn’t an Indian around for miles.

    – George Custer

  • http://theoldadam.com/ Steve Martin

    Don’t worry.

    Obama will take care of us. All is well. There isn’t an Indian around for miles.

    – George Custer

  • SKPeterson

    Well, to be fair, this is actually a head tax that is legal under the Constitution – something to lend weight to the Supreme Court notion that the AHCA is actually a tax bill.

  • SKPeterson

    Well, to be fair, this is actually a head tax that is legal under the Constitution – something to lend weight to the Supreme Court notion that the AHCA is actually a tax bill.

  • James Sarver

    My wifes employer provides Blue Cross administered health insurance for its 5000 employees from its own contribution pool. Obamacare is going to suck about a million dollars out of that pool over three years. I am wondering how this is going to reduce costs.

  • James Sarver

    My wifes employer provides Blue Cross administered health insurance for its 5000 employees from its own contribution pool. Obamacare is going to suck about a million dollars out of that pool over three years. I am wondering how this is going to reduce costs.

  • Jim Hamilton

    All the useful idiots who voted for this clown deserve whatever they get. Unfortunately, the rest of us who were “smart” enough to recognize him for the half-wit, under-qualified, socialist jack*ss that he obviously was have to the beating as well. Such is democracy, I guess.

  • Jim Hamilton

    All the useful idiots who voted for this clown deserve whatever they get. Unfortunately, the rest of us who were “smart” enough to recognize him for the half-wit, under-qualified, socialist jack*ss that he obviously was have to the beating as well. Such is democracy, I guess.

  • Stone the Crows

    Well… you know how the saying goes, ‘there’s no telling how expensive a thing can be until its free.’ And there’s the corolary that the closest that the Federal government gets to eternal life is a ‘temporary’ tax.

  • Stone the Crows

    Well… you know how the saying goes, ‘there’s no telling how expensive a thing can be until its free.’ And there’s the corolary that the closest that the Federal government gets to eternal life is a ‘temporary’ tax.

  • Jim Hamilton

    Also, the level of irresponsibility and immaturity demonstrated by the liberals in Congress who mindlessly voted for this monstrosity without even reading it is truly scary. It’s no wonder that many people (like me) have completely given up on politics. I remember those idiotic Democrats triumphantly marching to the Capital to vote for Obamacare. So smug, so self-righteous. These clowns couldn’t have cared less how many people would eventually by screwed by Obamacare; they just wanted to stick it to Republicans, everything else be damned. I wish I could say that it was surprising.

  • Jim Hamilton

    Also, the level of irresponsibility and immaturity demonstrated by the liberals in Congress who mindlessly voted for this monstrosity without even reading it is truly scary. It’s no wonder that many people (like me) have completely given up on politics. I remember those idiotic Democrats triumphantly marching to the Capital to vote for Obamacare. So smug, so self-righteous. These clowns couldn’t have cared less how many people would eventually by screwed by Obamacare; they just wanted to stick it to Republicans, everything else be damned. I wish I could say that it was surprising.

  • http://facebook.com/mesamike Mike Westfall

    Uh, huh. “Free” healthcare for pre-existing conditions comes home to roost.

    Now I f I could only get Uncle Sam to mandate that auto insurance pays fix my pre-crashed car.

  • http://facebook.com/mesamike Mike Westfall

    Uh, huh. “Free” healthcare for pre-existing conditions comes home to roost.

    Now I f I could only get Uncle Sam to mandate that auto insurance pays fix my pre-crashed car.

  • helen

    These clowns couldn’t have cared less how many people would eventually by screwed by Obamacare;

    Why should they? Their first concern was to exempt themselves from the whole thing.
    Why isn’t it unconstitutional to have a governing class to whom the laws do not apply?

  • helen

    These clowns couldn’t have cared less how many people would eventually by screwed by Obamacare;

    Why should they? Their first concern was to exempt themselves from the whole thing.
    Why isn’t it unconstitutional to have a governing class to whom the laws do not apply?

  • Jim Hamilton

    @8 Helen

    Very good point.

  • Jim Hamilton

    @8 Helen

    Very good point.

  • DonS

    The notion that one can be covered for pre-existing conditions in itself is antithetical to the whole concept of insurance. This $63 per capita fee is nothing compared to the ultimate cost of an insurance system where you need not bother purchasing it until you are sick or injured. No one has yet explained how that is going to work.

    Of greater interest than this capitation fee is the 3.8% surcharge on all income for those making more than $200,000 ($250,000 for joint filers), that also begins on January 1, as well as the 2.3% tax on gross revenues for all medical device companies, that also begins on January 1 (funny how all of these taxes and “fees” were timed to begin just AFTER the 2012 election — coincidence, I’m sure). Regarding the medical device tax, a bunch of Democratic senators who voted for Obamacare signed a letter asking that this tax be deferred because it will harm the economy.

    Democrats admitting the economic principle that tax increases are a drag on the economy? What is the world coming to?

  • DonS

    The notion that one can be covered for pre-existing conditions in itself is antithetical to the whole concept of insurance. This $63 per capita fee is nothing compared to the ultimate cost of an insurance system where you need not bother purchasing it until you are sick or injured. No one has yet explained how that is going to work.

    Of greater interest than this capitation fee is the 3.8% surcharge on all income for those making more than $200,000 ($250,000 for joint filers), that also begins on January 1, as well as the 2.3% tax on gross revenues for all medical device companies, that also begins on January 1 (funny how all of these taxes and “fees” were timed to begin just AFTER the 2012 election — coincidence, I’m sure). Regarding the medical device tax, a bunch of Democratic senators who voted for Obamacare signed a letter asking that this tax be deferred because it will harm the economy.

    Democrats admitting the economic principle that tax increases are a drag on the economy? What is the world coming to?

  • http://cranch James Patuto

    Honestly this works out to 5.25 a month, if it covers people with pre-existing conditions its a bargain. Uninsured with pre existing are a drag on the economy. I have a baby in my family with serious problems, if he is unable to maintain health insurance without interruption , under the old system he’d be rendered uninsurable , I’ll pay the five bucks, about the cost of half a pizza a month

  • http://cranch James Patuto

    Honestly this works out to 5.25 a month, if it covers people with pre-existing conditions its a bargain. Uninsured with pre existing are a drag on the economy. I have a baby in my family with serious problems, if he is unable to maintain health insurance without interruption , under the old system he’d be rendered uninsurable , I’ll pay the five bucks, about the cost of half a pizza a month

  • http://steadfastlutherans.org/ SAL

    While this a part of the tax bill it’s a relatively small part. The bill raises over $700 billion in taxes primarily from the poor and middle class over the next few years.

  • http://steadfastlutherans.org/ SAL

    While this a part of the tax bill it’s a relatively small part. The bill raises over $700 billion in taxes primarily from the poor and middle class over the next few years.

  • http://www.toddstadler.com tODD

    Veith said:

    Obamacare was passed so quickly that, admittedly, lawmakers did not have time to so much as read the multi-volume bill. Hardly anyone, opponent or proponent, knows everything that Affordable Health Care law will do.

    Hmm. I’m sure the first statement is true at some level, but the second one seems a bit odd, given that we’ve had the opportunity to read the text of the bill for over two years now. If there are any surprises in the text of the bill itself at this point, it’s our own fault, no?

    But then, this particular charge appears to not come from the text of the ACA itself:

    The charge, buried in a recent regulation…

    I’m not crazy about “shell bills” that have the majority of details hammered out later, but either way, it seems the reason no one had heard about this $63 charge was because it was only recently issued. Not because no one had yet noticed it in two and a half years of perusing the text of the bill.

    Anyhow:

    Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems.

    Thank goodness. After the government mandated that these companies get more paying customers, they then set up a fund to make sure these companies don’t have too hard a time adjusting to all those paying customers. As if we needed more evidence this whole thing was just a giant sop to health insurance companies. Whee.

  • http://www.toddstadler.com tODD

    Veith said:

    Obamacare was passed so quickly that, admittedly, lawmakers did not have time to so much as read the multi-volume bill. Hardly anyone, opponent or proponent, knows everything that Affordable Health Care law will do.

    Hmm. I’m sure the first statement is true at some level, but the second one seems a bit odd, given that we’ve had the opportunity to read the text of the bill for over two years now. If there are any surprises in the text of the bill itself at this point, it’s our own fault, no?

    But then, this particular charge appears to not come from the text of the ACA itself:

    The charge, buried in a recent regulation…

    I’m not crazy about “shell bills” that have the majority of details hammered out later, but either way, it seems the reason no one had heard about this $63 charge was because it was only recently issued. Not because no one had yet noticed it in two and a half years of perusing the text of the bill.

    Anyhow:

    Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems.

    Thank goodness. After the government mandated that these companies get more paying customers, they then set up a fund to make sure these companies don’t have too hard a time adjusting to all those paying customers. As if we needed more evidence this whole thing was just a giant sop to health insurance companies. Whee.

  • http://www.toddstadler.com tODD

    Yes, Jim (@6), I can understand how you’d really hate people who are “so smug, so self-righteous”. … Ahem.

    It’s a good thing you’ve “completely given up on politics”, which is why you never talk about it here, much less voice any political opinions.

  • http://www.toddstadler.com tODD

    Yes, Jim (@6), I can understand how you’d really hate people who are “so smug, so self-righteous”. … Ahem.

    It’s a good thing you’ve “completely given up on politics”, which is why you never talk about it here, much less voice any political opinions.

  • Jim Hamilton

    @14

    tODD, you’re quite a character. Bless your heart!

  • Jim Hamilton

    @14

    tODD, you’re quite a character. Bless your heart!

  • Joe

    “insuring” against pre-existing conditions is not possible. Insurance is based on the probability of something going wrong. When the probability is 100% because it has already happened, it is no longer insurance. It is simply forcing someone else to pay the majority of the cost.

  • Joe

    “insuring” against pre-existing conditions is not possible. Insurance is based on the probability of something going wrong. When the probability is 100% because it has already happened, it is no longer insurance. It is simply forcing someone else to pay the majority of the cost.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    ‘there’s no telling how expensive a thing can be until its free.’

    Also, everyone will be covered by insurance, but as we know insurance coverage does not equal medical services that you need when you need them. They will pay for stuff people don’t need like check ups but not for stuff people do need like treatments especially for older people.

    So, people are trading guaranteed insurance for treatment. Cool trick, huh? It is kind of like when everyone is special, then no one is.

    Just to recap

    Insurance ≠ treatment

    You can still be refused treatment. Got that?

    One treatment that is sure to be covered is euthanasia. I am sure that is a relief to many who were concerned that they would not be able to afford to off themselves.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    ‘there’s no telling how expensive a thing can be until its free.’

    Also, everyone will be covered by insurance, but as we know insurance coverage does not equal medical services that you need when you need them. They will pay for stuff people don’t need like check ups but not for stuff people do need like treatments especially for older people.

    So, people are trading guaranteed insurance for treatment. Cool trick, huh? It is kind of like when everyone is special, then no one is.

    Just to recap

    Insurance ≠ treatment

    You can still be refused treatment. Got that?

    One treatment that is sure to be covered is euthanasia. I am sure that is a relief to many who were concerned that they would not be able to afford to off themselves.

  • http://cranch James Patuto

    Sounds like you’re really for a single payer, maybe we should all get behind Medicare for all, would be cheaper for me to pay the tax than the insurance premiums and fairer too, also having all American citizens covered like every other first world country would make all us patriots proud.

  • http://cranch James Patuto

    Sounds like you’re really for a single payer, maybe we should all get behind Medicare for all, would be cheaper for me to pay the tax than the insurance premiums and fairer too, also having all American citizens covered like every other first world country would make all us patriots proud.


CLOSE | X

HIDE | X