A new report by the actuarial firm Millman Inc. says that a new tax on health insurers’ premium revenues will be passed on to consumers, and will cause problems for state Medicaid programs.

The health care reform premium tax, which starts in 2014, was intended to help pay for coverage of the 32 million uninsured Americans, and will be paid by all health insurance companies. But under federal law, the state and federal governments have to pay the tab for their Medicaid programs. States typically pay about 36% of the Medicaid costs, and this new tax will be paid out of each States’ already strained budget.  The Medicaid program provides medical coverage for about 60 million low-income families.

So let’s see, there’s a new tax on health insurance that we will have to pay because insurance companies will pass the tax on to us in increased premiums, AND, the tax that is paid on the Medicaid program expenses (which we already pay through our state and federal income taxes) will have to be paid by state and federal government revenues (aka our taxes).   Hmm….Sounds like we get hit with the full cost of the “health care tax”.   Who’s bright idea was that!   Oh yeah…our government.   Brilliant!

The insurance industry trade group (AHIP) said that they believe consumers should be exempt from this tax that increases health care coverage costs. I agree.  Especially since the goal of health care reform was to keep health costs from climbing out of control.

Stay tuned for more.

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