Unreported Obamacare Taxes Revealed


Still more news about hidden Obamacare taxes being revealed. They call these taxes fees but there is no doubt that they are a tax. There is a 2% tax on the plan that you choose. That is in addition to the exorbitant  premium being charged. Then there is a 3.5% tax for using the Obamacare Exchanges.

Ed Morrissey explains what many do not know:


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.”

It got sold as a system that bent the cost curve downward, but it only does that with effectiveprice, 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. (1)


The Wall Street Journal has more revelations for us. Note how much harder Obamacare will hit the self employed and small business workers. Small business provide the majority of new jobs created each year. Obamacare will be one more nail in the employment coffin.


ObamaCare includes so many taxes that it’s hard to keep track, but one of the worst takes effect on Jan. 1. This beaut is a levy on health insurance premiums that targets the small business and individual markets.

At $8 billion in 2014 and $101 billion over the next decade, the insurance tax is larger than ObamaCare’s taxes on medical devices and prescription drugs combined. The Internal Revenue Service classifies the tax as a “fee” but it functions like an excise tax on premiums. The IRS collects an annual flat amount specified by the Affordable Care Act to be allocated among the insurers according to market share.

But not all markets. IRS regulations published in November excluded “any entity that is a self-insured employer to the extent that such employer self-insures its employees’ health risks.” Since about four of five employers with more than 500 workers and most union-negotiated health plans are self-insured, they are spared from the tax. So is insurance on behalf of “government entities,” such as original Medicare (but not privately run Medicare Advantage).

This political selectivity means the most gold-plated public, private and labor plans are exempt and the tax burden falls on the saps who work for small businesses, the self-employed and individuals—i.e., the people who can least afford it.

The White House tells business that the tab will be picked up by deep-pocketed insurers, which is good for a laugh. The Congressional Budget Office reports the tax will be “largely passed through to consumers in the form of higher premiums” and “would ultimately raise insurance premiums by a corresponding amount.” The Joint Tax Committee and private economists, such as former CBO director Doug Holtz-Eakin, say the tax will boost insurance costs about 2% to 2.5%. The consultant Oliver Wyman estimates the take will rise to as much as $500 per covered worker by decade’s end.

Wasn’t the Affordable Care Act supposed to be about expanding coverage in part by lowering premiums, not slapping on more overhead? By this liberal logic taxing cigarettes should create more smokers.

Oh, and to salt the wound, this “fee” is not deductible for corporate income tax purposes. In other words, health plans pay the tax and then federal and state taxes on the taxed amount. Mr. Holtz-Eakin estimates this unusual taxes-on-taxes rule means that the effect on premiums is 54% larger than the dollar amount of the tax itself.

The research arm of the National Federation of Independent Business calculates that the higher insurance costs will shrink hiring by 146,000 to 262,000 jobs over the next decade, with 59% of those losses hitting small business. They’ll also be further encouraged to dump coverage and send their workers to the mercies of the ObamaCare exchanges. The latter was probably a main liberal purpose from the start.

Louisiana Republican Charles Boustany and Utah Democrat Jim Matheson’s repeal bill already has 229 cosponsors, or a House majority, including some dozen Democrats. The White House naturally promises a veto. Happy New Year. (2)


So much for the transparency that Obama promised his administration would have.  And Liberal Democrats are not through. They have proposals for even more taxes! The next 3 years of the Obama Presidency look to be the most heavily taxed years in the history of our nation.



(1) Coming up next: ObamaCare taxes and fees

BY ED MORRISSEY, Hot Air – http://hotair.com/archives/2013/12/26/coming-up-next-obamacare-taxes-and-fees/

(2)  A Large New Tax on Small Business, The Wall Street Journal – http://online.wsj.com/news/articles/SB10001424052702304465604579220413773642016

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