Sunday, September 24, 2017

The Obamacare Health Insurance Fee. It's baaaaaack!

The so-called "Health Insurance Fee" levied as part of Obamacare was given a moratorium for one year, 2017, but will apply again in 2018.

This Fee increased overall premiums by around $13 billion during 2016, $0 in 2017, and is expected to increase premiums by more than $14 billion in 2018 according to consultants Oliver Wyman

That one-year moratorium on the HIF was an important factor to insurance companies.  It meant a significant cost did not have to be included in their 2017 premiums - which of course insurers had to calculate and announce well before year-end 2016. (In other words, prior to the 2016 elections.  But why be divisive and mention that?)  And for 2018, the end of the one-year moratorium means the HIF cost must again be added to premiums.

Oliver Wyman and others expect the 2018 HIF will raise overall premiums by about 3%.  That will be on top of whatever increase is attributable to the continuing increases in unit costs of medical services, plus the effect of generally higher utilization of medical services.

The exact impact of HIF on any specific policy may be more or less than 3% and depends on many factors, such as whether you are buying as an individual, or as part of a group; whether your group sponsor subsidizes your premiums and, if so, by how much; and whether your coverage will change as of January 1.

Whatever, the return of HIF helps explain why we are already reading of high medical insurance premium increases for 2018. Here is one source.  There are others.

UPDATE September 26, 2017:  FYI, the estimated 2018 per person, per month HIF will be about $35.  That is 3% of the 2017 Medicare A and B per person, per month premium of just under $1,200.  The Medicare premiums for 2018 have not yet been announced.

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