Call them fees or taxes, the City of Jasper is about to get hit with them.
During its meeting last week, Vice President of Sales for MSI Benefit Group Matthew Bidwell explained to council options for the city’s health insurance plan renewal along with the dark cloud of looming taxes…or fees.
Bidwell said the new healthcare law (known as Obamacare) will result in three new fees or taxes for Jasper between this year and next year. The first is called the Patient-Centered Outcomes Research Institute.
“funds research on the effectiveness, the risk and benefits of medical treatment.”
The cost is one dollar per member per month. The city has 217 members, so in July Jasper’s healthcare provider will pay the federal government $217 on the city’s behalf. Next year, the fee will increase to two dollars. Bidwell also pointed out the Research Institute will overlap the function previously performed solely by the America Medical Association.
“They’re (the Research Institute) are going to be making the determination of effectiveness and benefits of medical treatments,”
he said. He went on to explain that in the past the AMA would set the guidelines for medical treatments. Now, the federal government will seemingly assume this role.
The second tax, though, is the more draconian measure, according to Bidwell’s explanation. Called The Health Insurer Fee, the second tax is a surcharge to policy holders to assist in funding subsidies for individuals buying insurance.
“If you’re on the individual market,”
“(and) you’re not working for an employer that is providing insurance and you’re making between 133 and 400 percent of the poverty level, you could be eligible for premium assistance through the federal government.”
So what does this mean for Jasper and its taxpayers? The fees are estimated to be 2.5 percent of the premium. To estimate the cost, Bidwell said he calculated the cost to the city based on January’s premiums times two and a half against a 12 month period. Based on this calculation, the magic number is $15,300, which Bidwell said will be embedded in the city’s insurance premiums. Approximately 25 percent of this cost will be included in this year’s premium, but next year will see the full cost.
According to Bidwell’s talk, the third tax is designed to offset the cost of high risk individuals.
“is estimated to be $75 per member…We estimated that it will be $16,000 (for the city) once it’s fully implemented (and) $4,000 of that is factored into this (year’s) renewal.”
Once the new health law is implemented in 2014, these taxes will cost the city 32 to $33,000 a year.
Later in the meeting, council accepted a contract from Blue Cross Blue Shield, which had a lower rate than the city’s current provider, Aetna. Blue Cross offered a 12 percent higher cost than last year. However, the cost will be spread out over three options, bringing it within Jasper’s budgeted five percent at 4.6 percent.