By Don Ingalls
As we implement the Affordable Care Act, we continue to work with state and federal policy makers to improve aspects of the law that will increase premiums for our members. The act includes a number of new taxes and fees that affect insurers and employers. These new taxes and fees are scheduled to take effect in the next couple of years and will add to the cost of insurance.
BlueCross BlueShield of Western New York remains particularly concerned about the health insurance tax, slated to begin in 2014 and estimated to add hundreds of dollars annually to premiums for individuals, families, business owners and the elderly.
This is a tax on health insurance itself and it begins at $8 billion in 2014 and increases to $14.3 billion by 2018. The tax is expected to total $101.7 billion over 10 years. Congress estimates that the tax will add about $400 a year to family premiums in 2016 alone.
This new tax contradicts efforts to control the soaring costs of health care, does nothing to improve patient health and will burden Western New York middle-class families. This tax will hit individuals, small business owners and the elderly the hardest.
For example, a person working at a small business will pay on average $2,760 more in premiums over 10 years. That person could buy 770 gallons of milk with that money. A small business owner will see an increase of nearly $5,000 for family coverage by 2020. That business owner could buy more than 1,400 gallons of gas to transport goods to market. And a senior enrolled in Medicare Advantage could pay an additional $3,590 over a 10-year period. That senior could buy groceries for several months with that money.
New Yorkers will pay an additional $13 billion as a result of this tax, on top of the nearly $4.8 billion the state of New York already taxes health insurance.
The typical New York family buying insurance will pay an added $9,942 over 10 years. Families in New York with insurance through a small employer health plan will pay more than $9,000 on average over 10 years, and greater than $7,600 if they are receiving insurance through a large employer.
The bottom line is that this tax will make health insurance less affordable. Congress should work to repeal this tax, and focus on finding ways to improve health care while making it more affordable and accessible.
Prior to the passage of the Affordable Care Act, BlueCross BlueShield of Western New York was already working to transform our health care system so that we reward quality care, improve health outcomes for our members and rein in costs for everyone. We remain committed to these efforts.
Don Ingalls is vice president, state and federal relations, for BlueCross BlueShield of Western New York and chairman of the New York Health Plan Association.