[quote=CONCHO]The one that really confuses me is this one:
A new 40% excise tax, beginning in 2013, on high-cost health plans, defined as those providing coverage in excess of $8,500 for individuals and $23,000 for families. The House’s package of modifications includes higher threshold amounts and an initial effective date of 2018.
What does that even mean to provide coverage in excess of some amount? Does that mean you are covered for more than $8500/year? Seems pretty low to me.[/quote]
Besides the reporting using only the original Senate bill, and not the reconciliation bill, which will be passed and signed into law later this week, it changes a few words which also changes the entire thrust of the law.
The reconciliation bill changes the amounts to $10,200 and $27,500. The tax has nothing to do with benefits, only premiums. Insurance companies will pay a 40% excise tax on the amount of premiums that exceed those amounts. For an individual, a policy that costs $11,200 a year would be subject to a $400 excise tax, to be paid by the insurance company. Those taxes will be built into the premium cost, so for every premium dollar over the limit, the insurance company will actually raise their rates by roughly 67% to cover the tax. (A policy with annual premiums of $11,200 would be priced at $11,867. 40% excise tax on the amount over $10,200, or $1,667 would be $667. Insurance company ends up with $1,000 more in net premiums.)
