Health insurers are not pulling any punches. They say they plan to pass new taxes under the 2010 health reform law directly to consumers through higher premiums.
A report financed by American’s Health Insurance Plans predicts that premiums will increase by about 2 percent in 2014, and 3 to 4 percent by 2023, once insurance companies pass along a federal tax that will hit in 2014.
“Those individuals and families who are not eligible for [government] subsidies … will bear the full cost of the fees, requiring that they pay more out-of-pocket and making coverage less affordable,” consulting firm Oliver Wyman wrote in the report , released late on Wednesday.
The Congressional Budget Office had predicted that insurance companies would do just what they say they are going to do. But CBO also said that when the entirety of the health care law took effect, premiums would ultimately go down, said Paul Van de Water, a former CBO staffer now at the liberal Center for Budget and Policy Priorities.
“Part of what they’re saying is accurate, but they are leaving out a whole lot of other stuff that suggest premiums are likely to go down,” Van de Water said in an interview. State insurance exchanges will help lower administrative costs, he said, as will new rules that require insurance companies to spend 80 to 85 percent of premiums on medical care.
Democrats on Capitol Hill criticized the study, saying that insurance companies could simply cover the costs of the tax and not pass them to consumers.
"This new health insurance industry tax -- which the industry decries -- is levied on them, not consumers. With their record profits and exorbitant CEO compensation packages, health insurers are perfectly capable of absorbing this cost,” House Ways and Means Health Subcommittee ranking member Pete Stark, D-Calif., said in a statement.
“If they are really going to pass along all of it, why are they so unhappy with it?” Van de Water asked.
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