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Photo:
Robin Nelson/Zuma Press/Newscom
D.C.
Gets a New Obamacare Tax
Marguerite
Bowling
May
6, 2014
The
District of Columbia’s legislative body voted today to give its
health exchange the power to tax any health-related insurance product
sold in the city.
The
D.C. Council, in a unanimous vote, approved the emergency tax measure
to help the D.C. Health Benefit Exchange Authority run the online
insurance exchange set up under the national health law known as
Obamacare, The Washington Post reported.
The
D.C. bill, which is subject to congressional review, will add a 1
percent tax on more than $250 million in insurance premiums paid
annually by those who work or live in Washington, D.C. The new tax is
supposed to help meet D.C. Health Link’s $28 million annual budget.
Mila
Kofman, the exchange’s executive director, had called the measure
an issue of fairness. “Insurers who benefit and profit—not the
taxpayers—should pay,” he argued in a statement.
Opponents
such as the American Council of Life Insurers told The Post that the
D.C. entity only could tax insurers that are part of its Obamacare
exchange.
Edmund
Haislmaier, a health policy expert with The Heritage Foundation, told
The Foundry that the Affordable Care Act actually gives plenty of
leeway to states and the District on how they continue to fund their
insurance exchanges.
“While
D.C. law could say differently, there is nothing in Obamacare that
precludes how the District or states come up with the money they need
to keep their exchanges running,” said Haislmaier, a senior
research fellow in the think tank’s Center for Health Policy
Studies. “They could apply more health premium taxes or even
increase their sales taxes.”
After
2015, the District as well as states that elected to set up an online
insurance exchange no longer will receive federal grants to maintain
their exchange websites or pay “navigators” who assist those
shopping for insurance.
For
the District, the new tax will be levied on plans for long-term care,
dental, vision, hospital indemnity, and other health-related
policies.
With
states such as Oregon, Maryland, and Massachusetts struggling to fix
broken Obamacare sites, Haislmaier predicted, funding and
sustainability will become a bigger concern for state exchanges:
When
they jumped at implementing Obamacare, none of these states could
envision the difficulties they encountered” at a time when federal
grants were slowing down.”
Read
this and other articles with photos at Heritage Foundation
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