The Norman Transcript

Nation/World

October 28, 2013

Republicans take unusual stance, fight for tax increase

(Continued)

WASHINGTON —

Cardin said he didn’t want any changes in the law to be part of the deal for reopening the government and extending the country’s ability to borrow. In the end, the only change was an income verification procedure for people applying for tax credits to help them purchase health insurance.

The temporary fee on people with health insurance is designed to raise $25 billion over the next three years. The money will provide a cushion for insurers from the initial hard-to-predict costs of covering previously uninsured people with medical problems.

Under the law, insurers will be forbidden, effective Jan. 1, 2014, to turn away applicants who are ill.

Insurance companies hit by unexpectedly high costs for insuring people with medical conditions will be able to tap the fund, which will be administered by the Department of Health and Human Services. The fund will mainly benefit companies participating in state-based health insurance exchanges.

The fee will total $12 billion in 2014, $8 billion in 2015 and $5 billion in 2016. That means the per-head assessment would be smaller each year, around $40 in 2015 instead of $63.

It is being assessed on all “major medical” insurance plans, including those provided by employers and those purchased individually by consumers. About 150 million workers, spouses and dependents are covered under employer-sponsored health plans.

Large employers will pay the fee directly. That’s because major companies are usually self-insured, with the health insurance company that workers deal with basically acting as an agent administering the plan.

Unions that operate multi-employer health plans also will pay the fee. More than 20 million union workers and family members are covered by such plans.

These unions and large employers argue that they shouldn’t have to pay the fee because they won’t benefit from the fund.

The AFL-CIO passed a resolution at its convention this year calling for the fee to be repealed. Large employers are fighting the fee, too. But, Young noted, the political atmosphere in Congress, especially when it comes to the health care law, will make it difficult to win any changes.

“The Affordable Care Act is now kind of a third rail,” said Young, referring to the law’s formal name. “If it wasn’t before, it is even more so now.”

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