In the medical overhaul from President Barack Obama, a $63 fee per person to cover the cost of patients with pre-existing conditions could be passed onto you. Companies could be faced with charges of tens of millions of dollars, which will more than likely be handed down to employees of those companies. Individual and employer health plans that cover close to 190 million Americans could see the fee, according to the Associated Press.
According to the administration, the fee is temporary and will be charged for three years beginning in 2014. The fee has a goal of raising $25 billion and will begin at $63 and then decline over the three years.
Chantel Sheaks is an employee benefits lawyer for Buck Consultants, a subsidiary of Xerox. She said, “Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it.”
Almost all of the money will be deposited into a fund run by the Health and Human Services Department in order to cushion the costs that are associated with uninsured people who have medical issues. The law will prevent health insurance companies from turning down sick people as of January 1, 2014.
The Obama administration said the following about the program in the regulation, which “is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all.”
The United States Treasury will receive $5 billion in order to offset the cost of employer-sponsored coverage for employees who decide to retire early.
“This kind of came out of the blue and was a surprisingly large amount,” said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee.
The government said that the fee is going to be placed on all ‘major medical’ insurance plans, which includes plans that are purchased by individuals and those provided by employers. The fee will be owed directly by large employers. The reason for this is that major companies typically pay upfront for the majority of the health care costs incurred by their employees.
The breakdown of the fees over the three years include $12 billion in 2014, $8 billion in 2015 and $5 billion in 2016. As of 2015, the fee per person should drop from $63 to $40. The fee will be completely phased out in 2017, unless the government decides it wants to extend the program in order to help reduce federal deficits.