It’s Good to be the King!

Mel Brooks had it right when he said, “It’s good to be the King!”  Now, anyone who saw History of the World Part 1, knows that he wasn’t exactly talking about Health Insurance Exchanges or Marketplaces.  But, let me show you some math that makes this point.

Most people know about the Individual Mandate and the corresponding fines/taxes assessed to individuals who do not buy health insurance in 2014 and beyond.  Here is a quick recap:

  • The higher of $95 or 1% of taxable income — in 2014.
  • The higher of $325 or 2% of taxable income — in 2015.
  • The higher of $695 or 2.5% of taxable income — in 2016.

But, a much less widely known element of Health Reform is the Surcharge being charged to insurers offering coverage on the Exchanges.  Starting in 2014 as well, 3.5% of the premium paid for policies sold on the Public Exchange must be paid to the Federal Government to “cover administrative costs” of the program (See – Paying for the Federal Health Exchange).

Based on average premium figures, I have estimated that 3.5% will be about $150-$200 per enrollee per year.

So, whether you buy coverage or not, the Federal Government gets something – which is a good thing since may need a complete overhaul.


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