Heritage Foundation, January 1, 2014
1. Individual Mandate Tax. The
individual mandate is designed to strong-arm individuals into purchasing
government-approved health insurance or facing a tax penalty. In 2014, the
penalty for not purchasing insurance will be either $95 or 1 percent of annual
income (whichever is greater). Very few, if any, people will end up paying just
$95, because individuals with an annual income of only $9,500 or less would
likely qualify for Medicaid or a hardship exemption from the mandate. The
mandate increases drastically in coming years, rising to $325 or 2 percent of
income in 2015, and $695 or 2.5 percent of income in 2016—whichever is greater.
2. Health Insurer Tax. One of the
largest tax increases in the law is an annual fee imposed on health insurers
based on their share of the market. It is estimated to raise $8 billion in 2014
alone. The tax will more than likely be passed on to consumers through premium
increases. An actuarial analysis by the consulting firm Oliver Wyman projects
that in 2014, this tax will increase premiums by 1.9 percent to 2.3 percent.
And the impact will be greater in later years as the tax increases.
3. Reinsurance Fee. This
fee isn’t included in the list of 18 tax hikes, but
it’s another one that will impact the cost of insurance. Health insurers will
have to pay the temporary fee on group health plans to help spread the cost of
the covering those in the individual market, inside and outside Obamacare’s
exchanges. The fee begins in 2014, costing $63 per covered person and
decreasing in 2015 and 2016. Like most taxes and fees, the result will likely
be higher insurance premiums.
