NCPA - National Center for Policy Analysis

Health Care Law's Insurance Tax Will Raise Premium Costs

December 10, 2012

Insurance premiums could increase by thousands of dollars because of a new tax in President Obama's health care law, according to a study commissioned by the insurance industry, says The Hill.

  • The health care law imposes several new taxes, including a tax on the insurance industry.
  • The amount the government will collect will rise each year, and is expected to raise $100 billion over 10 years.
  • The health insurance tax will raise families' insurance costs by as much as $7,000 over a decade, according to a study conducted by the firm Oliver Wyman on behalf of America's Health Insurance Plans, the insurance industry's leading trade group.

Premium increases will vary from state to state, says Oliver Wyman. But on average, the cost of a family plan sold through a large employer could cost about $7,200 more over 10 years -- about $720 per year.

Insurers have pressed Congress to repeal the tax, saying it is part of a series of policies, set to take effect at the same time that will cause a dramatic spike in premiums.

Source: Sam Baker, "Study: Health Care Law's Insurance Tax Will Raise Premium Costs," The Hill, December 5, 2012. "Health Insurance Tax to Hit Consumers, Employers in All 50 States," America's Health Insurance Plans, December 5, 2012.


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