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Public Statements

Hidden Tax on Health Care Recipients Outrageous

Press Release

By:
Date:
Location: Washington, DC

U.S. Congressman Pat Tiberi (R-OH) today expressed outrage over a new proposed rule from the Obama Administration that imposes a $63 tax per health insurance recipient. The fee will be imposed on 190 million Americans to cover Obamacare's reinsurance program.

"This hidden tax on people who are enrolled in health care plans is outrageous. It's more proof that President Obama is only interested in increasing taxes. This tax isn't spelled out in the Affordable Care Act, it was created by the Administration," said Congressman Tiberi. "Once again, President Obama is breaking his promise to not raise taxes on middle class families and small businesses that will end up bearing the brunt of this burden. Health care premiums have already risen by $3,065 since President Obama took office and this tax will only continue to increase the cost of health care."

This fee will be collected by the Department of Health and Human Services beginning in 2014 and is designed to raise $25 billion. The funds are intended to cover reinsurance payments to insurance companies with high-cost enrollees. The Internal Revenue Service will receive $5 billion of these funds to offset the cost of Obamacare's Early Retiree Reinsurance Program. Currently the proposed rule requires that the $63 per recipient fee will only be in effect between 2014-2016 and will decrease annually. The fee is imposed on each person covered under a plan, not just the employee receiving coverage. It will cost some large employers tens of millions of dollars, which will in turn be passed to employees.

"The bottom line is that this new tax was hidden in the thousands of pages of the health care law. As new regulations are implemented, what other taxes and fees will we face? Millions of small businesses and employees will be forced to pay the tax while they will get nothing in return since few people will utilize these programs. At a time when small business owners are struggling to decide if they will continue to offer health insurance because of new Obamacare mandates, this tax can only be seen as further incentive for employers to dump their coverage," added Congressman Tiberi.

The fee is included in the proposed rule issued on November 30, 2012, Notice of Benefit and Payment Parameters for 2014 (NBPP) (CMS-9964-P), and published in the December 7, 2012 Federal Register (231) DER A-13, 12/3/12. Comments on the rule are due on December 31, 2012.


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