Keeping an Eye on Health Premiums
Policy uncertainty on Cost-Sharing Reduction (CSR) subsidies inflated the prices of health coverage for the fiscal year 2018. A similar effect can occur if an insurance tax on large providers takes effect in January 2018. The tax applies to insurance providers and not to your insurance agency.
A Hidden Tax Looms
There has been a hard focus on Congress and efforts to repeal the Affordable Care Act, otherwise known as Obamacare. The repeal efforts continue and will likely lead to more changes in medical insurance. One piece of the law that remains is the Health Insurance Tax (HIT). While it is a tax on insurance providers, there is every reason to expect that costs will be passed through to consumers in the form of higher premiums.
The Lessons of 2018
Insurance providers have proposed, and the states have approved, the health premiums for the fiscal year 2018. The premium increases for Florida health policies were primarily in the silver plans available on the federal marketplace. The reason for the increase was due to uncertainty over the CSR payments that help reduce consumer out-of-pocket costs. Another source of increases is on the horizon. It is a health tax that has received little public attention thus far.
The Insurance Provider Tax
Officially, the name is the Health Insurance Provider Fee, but most health industry experts label it as an insurance tax. The fee affects large insurance companies that have benefited from the individual and employer mandates of the Affordable Care Act. The tax moves in steps from 2018 through 2027. It will raise about $13 billion in 2018 and grow to about $21 billion in 2027.
Florida Healthcare Participation
Health premiums mean a lot in Florida, which is the leader in individual and family participation in the Affordable Care Act. Florida has the largest group of subscribers among states that do not operate a state exchange. In 2017, over 1.7 million Floridians enrolled in private plans by themselves or with the help of an insurance agent or broker.
Nearly 90 percent of Florida participants received subsidies. The average pre-subsidy premium was about $440 per month, but after applying subsidies, consumers paid about $118 per month.
Will 2019 Premiums Get HIT?
If the HIT goes into effect in January 2018, prices could rise in the employer-sponsored plans as well as the individual and family market. Much depends on the changes that Congress makes related to the individual mandate and other issues. We will watch the trends and continue following congressional actions on medical insurance that affect our Jacksonville customers and clients.
For any questions you might have, don't hesitate to ask us here at the Della Porta Group.