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Federal Government Suspending ACA Insurance Tax For One Year

Mar 03, 2016

Modern Healthcare
March 1, 2016

Modern Healthcare (3/1, Herman, Subscription Publication) reports Congress has decided “to suspend the Affordable Care Act’s tax on health insurers for one year,” which will cost the Federal government $13.9 billion. As a result, CMS “expects insurance companies to keep their premiums in check when they file 2017 rates this spring,” the idea being that this “one-year tax reprieve will put a ceiling on premium increases and push savings to consumers instead of into the coffers of health insurers.” CMS stated on Monday, “Because the fee is not being collected for the 2017 fee year, administrative costs for plans in all impacted markets are expected to be adjusted appropriately to account for the moratorium.” The article points out that America’s Health Insurance Plans had strongly opposed the tax, warning that it compelled insurers to raise premiums by three to four percent annually. AHIP CEO and former CMS chief Marilyn Tavenner said this moratorium should allow some insurers to drop premiums.

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