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Health Insurers Win Delay on Start of $70 Billion in Added Fees
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| Contributor | Jason |
| Last Edited | Jason Dec 20, 2009 04:00am |
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| Category | News |
| Author | Alex Nussbaum |
| News Date | Sunday, December 20, 2009 06:00:00 AM UTC0:0 |
| Description | Dec. 20 (Bloomberg) -- UnitedHealth Group Inc., WellPoint Inc. and smaller U.S. insurers gained a year under Senate Democrats’ proposed health-care legislation before the start of a tax that industry lobbyists say will drive up premiums.
The measure proposed yesterday by Senate Majority Leader Harry Reid would also exempt some nonprofit insurers from the tax, shifting more of the burden to the for-profit companies, said Elizabeth Hall, a vice president at Indianapolis-based WellPoint. Device makers won a postponement of a proposed levy, while drugmakers would see no change in their taxes. A possible tax on cosmetic surgery was abandoned.
The insurer tax, amounting to about $70 billion over 10 years, was to start next year under a previous version of the Senate measure. That would have forced insurers to take $6.7 billion out of profit, since they’ve already signed contracts setting rates for 2010, said Matthew Borsch, a New York-based analyst for Goldman Sachs Group Inc., in a Dec. 16 interview. The new version also postpones more of the tax until after other parts of the health overhaul kick in.
“We made some pretty salient arguments that people are going to be paying for something before they see any benefit,” Hall said in a telephone interview today. “There’s a policy logic behind it and also a political logic: Who wants to tax their constituents before they see any benefits?” |
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