When is a fee not a fee? When it is an ObamaCare tax

A reader who requests anonymity sent in this account of her investigation into a curious asterisk on her health care insurance bill.

I am one of the people who actually is able to "keep" my previous plan with Blue Cross Blue Shield of Illinois (BCBSIL) after I was "cancelled" and then told I could actually keep it.

That being said, here is another little gem that was buried in ObamaCare.

When my most recent bill (premium due) arrived from BCBSIL, there was an asterisk and an "explanation":

*Total premium includes the effects of Health Insurer and Reinsurance fees, plus any federal and state taxes applicable to these fees" - Allocated taxes and Fees - $59.28

I didn't understand what this meant so I called BSBSIL. It took a few days to get through when I had time to wait on hold  but earlier today I found a wonderful person who has been with BCBSIL for a while and she was able to track down the explanation/definition.

I was informed that the "fees" are really a TAX being collected by BCBSIL on behalf of the US government for the "Affordable Care Act".  For me, this additional amount is almost $60 per two month billing cycle. The Feds get this money from me collected through BCBSIL.

I asked and was told that the "Reinsurance Fee" will continue "...until at least 2016..." according to the nice lady I spoke to at BCBSI. 

The "Health Insurer Fee" is PERMANENT. (And to be clear, the Health Insurance  Fee is not for BCBSIL - it is for the Feds....)

I asked for a breakdown of the amount based on my premium.

In Illinois, these fees (which really is a tax going to the Feds) is 3.9% of the premium. Here is the breakdown -

$58.70 is the "Health Insurer Fee" (which remember is a tax going to the Feds) and of that, $5.25 per month is the so called "Reinsurance Fee", also a tax. Calling it a fee is misleading when everything is really a tax. And the State of Illinois will receive approx .58 (that is 58 cents), (That is the  balance of the 3.9% - $59.28).

SO the "health insurer and reinsurance fees" is just a made up name for the Obama admin's tax on us.

I also did ask when BCBSIL was notified about this Fee/Tax and the lady I spoke with said it was somewhere before September of 2013.

(AND ----If I had gone with a policy with a "new" BCBSIL policy which I thought I had to until things got changed, --- that 3.9% of the premium was already built into all of the 2014 policies.

Nice, huh?  A Federal tax hidden inside the policy premiums.   

Another gem from the kind lady:  if we move to another state, my health care policy will be automatically canceled and I will have to re-apply in total and "...enroll in one of the policies defined within the "ACA".  Before "ACA", my policy would have been portable and I would not have had to begin an entirely new application process, paying only the premium for that policy in that state.

So, two more lies confirmed:

  • "Your plan will be cheaper"....not
  • "95% of Americans will not pay one more dime in taxes under my administration"....not

And one more piece of information -

BCBSIL administers policies in several states.

As written above, the (Federal) tax for an Illinois resident is 3.9%.

The tax for Texas resident is 4.3%

The tax for an Oklahoma resident is 4.4%

The tax for a New Mexico resident is 3.7%

(They are just starting in Montana and she didn't have that breakdown...)

Does this mean residents of "Blue" states will pay less that "Red" states? or is it a coincidence?

I suggested to the woman I spoke with that BCBSIL sent out a letter to their "members" explaining in writing what she told me on the phone. She said she would suggest that to the "higher ups".

I even asked her if she could send me an email with the information (explanation from the Feds) and she was not able to do that.

Yes they have received many calls asking about the asterisk.... but no one had asked her before me to break down what the actual "tax" is for the Feds and the State of Illinois.

I would be curious if people in other states who are AT readers have asked their insurance carrier what percentage of their insurance is being levied (for taxes) by the Fed for ACA in their states. There are elections approaching...and the future of the "Affordable Health Care Act" seems to be a work in progress.

And... anyone on Medicare or Medicaid does not pay this percentage tax.