PPACA and Taxes

Following the Supreme Court decision upholding the Affordable Care Act, the House Ways and Means Committee recalculated the net impact of all taxes in the new law, concluding that the 21 new taxes imposed under the act would cost taxpayers more than $675 billion over its first 10 years.

Only two of the taxes specifically target high income taxpayers (surtax on investment income and 0.9 percent Medicare payroll tax). Other taxes hit families directly regardless of income. In the case of taxes targeting industries, the Congressional Budget Office (CBO) advised Congress that the health insurance tax “would be largely passed through to consumers in the form of higher premiums for private coverage.” This observation has been confirmed by statements from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) and by the Joint Committee on Taxation (JCT) of Congress. It is likely that other industries likewise would pass along tax increases imposed on them onto consumers.

The following summarizes the various taxes, the date they are scheduled to begin, and the dollar estimates of expected revenues from 2010-2019 and the updated estimates for the years 2013-2022. The taxes are listed in chronological order.

Direct Taxes on Families

Taxes on Employers Ultimately Borne by Families

Taxes on Health Industry Ultimately Borne by Families

  • Excise Tax on Charitable Hospitals (Section 9007) (Min$/immediate)
  • Drug Manufacturers/Importers Tax (Section 9008): ($27B./$34.2B.)
  • Indoor Tanning Tax (Section 10907): July 1, 2010 ($2.7B./$1.4B.)
  • 2.3 percent Medical Device Fee (Section 1405 – Reconciliation): Jan 2013 ($20B./$29.1B.)
  • Health Insurance Tax (“HIT” annual fee on health insurers) (Section 1406: Section 9010): Jan 2014 ($60.1B./$101.7B.)
  • Health insurer excise tax (to fund patient-centered outcomes research trust fund: ($2.6B./$3.8B.)
  • Blue Cross/Blue Shield Tax Hike (Section 9016): Jan 2010 ($0.4B./$0.4B.)
  • Eliminate deduction for expenses allocable to Medicare Part D subsidy ($4.5B./$3.1B.)
  • Limit deduction for compensation to officers, employees, directors, and service providers of certain health insurance providers ($0.6B./$0.8B.)

Taxes on Other Industries Ultimately Borne by Families

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One Response to “PPACA and Taxes”

  1. Danilo Says:

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    Many thanks ,Marcelo

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