The Campaign Spot

Meet the Three New Fees that Kick in for Health Insurance for 2014

Those of you who still have insurance will be paying more in premiums next year. A bunch of new fees take effect, all written into the law of Obamacare or instituted by the Department of Health and Human Services.

First there’s the “Annual Health Insurance Industry Fee.”

Health insurance issuers will be assessed an annual fee to fund some of the provisions of the ACA.

The total amount collected from the fee will be $8 billion in 2014 and will increase to $14.3 billion in 2018. After 2018, the amount will be determined by the annual rate of premium growth. The fee will be divided proportionately between all health insurance issuers, although for-profit insurers will pay twice the amount as not-for-profit insurers. This fee is not applicable to self-funded health plans.

Based on estimates from Oliver Wyman, a national consulting group, the fee could increase premiums by 2-2.5 percent in 2014 and by 3-4 percent in later years.

This fee will begin to be assessed in January 2014 and is permanent.

Then there is the Traditional Reinsurance Program Assessment Fee:

HHS proposes that the annual assessment will cost $63 per individual enrolled under a plan/policy in 2014. HHS will require plan administrators to submit enrollment counts by November 15, 2014. The agency will send out assessment bills by December 15, 2014. Payments will be due 30 days later.

You can be expected to be charged in 2014 for the payment due by mid-January 2015. There’s been some debate in Congress about delaying this fee, as unions loathe it with a passion.

Then there’s the Risk Adjustment Program and Fee:

How much does this fee cost? Under the risk adjustment program, payments will be transferred from issuers with relatively lower-risk populations to issuers with relatively higher-risk populations. Coventry estimates that the risk adjustment fee will cost about $0.08 PMPM (Per Member, Per Month).

Some may say, “wait, that’s only about a dollar a year. What’s the big deal?” But WellPoint has 34 million members, Aetna has 18 million, Humana has 10 million, UnitedHealthcare says it “provides services” to 70 million (although that number may not reflect “members”) . . . 

Who is responsible for paying this fee? Fully insured plans that participate in the individual and small-group markets in a given state will pay the fee. The fee does not apply to large-group plans or self-funded plans. It also does not apply to any grandfathered plans.

When will this fee go into effect, and when will it end? This fee will go into effect in 2014 and is permanent.

These fees, of course, are a likely contributing factor to why the plans offered are so much more expensive than the old plans that are cancelled because of the new Obamacare requirements.

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