Affordability--for a fee

Three years after Congress passed the Affordable Care Act, Americans are still learning what’s in it. The latest surprise is a $63-per-person fee to help provide medical insurance for people with preexisting conditions.

The new tax, beginning in 2014 and lasting for three years, is expected to collect around $25 billion. Most of that money will help insurance companies stabilize costs as they start providing health coverage to individuals with preexisting medical problems, as required by the new healthcare law. The Obama administration claims its healthcare overhaul will provide coverage to around 30 million uninsured Americans and somehow “lower medical expenses and premiums for all.”

The new tax applies to an estimated 190 million Americans already covered under major medical insurance policies, whether individually or through employers, according to the Associated Press. In 2014 the fee will amount to $63 for each employee and dependent (thus, a family of four covered under the father’s policy would pay $252). The following two years, the fee will decrease, dropping to about $42 per person in 2015 and $26 per person in 2016. It is scheduled to disappear in 2017.

Although the money primarily will benefit new individual health insurance plans, businesses will foot much of the bill, since many will likely subsidize the fees for employees. “It’s somewhat ironic that companies, including self-funding employers, will wind up paying additional fees or taxes that will largely support the finances of the insurers,” healthcare attorney Mark Kopson told the Detroit Free Press.

Other Affordable Care Act tax increases are already upon us. Beginning on Jan. 1, the law triggers a 2.3 percent tax on sales of medical devices (such as pacemakers and CT scanners), along with a 0.9 percent Medicare payroll tax increase on individuals making over $200,000, and couples making over $250,000.