The Exchange Set To Propose a 1% Premium Tax Increase
October 16, 2012 - 4:57 pm
In a meeting that drew opposition from across the health care marketplace last week, the Operations Committee of the Washington State Health Benefit Exchange heard a proposal by staff that included a major increase in the premium tax on all Washington State health insurance plans.The increase – either a 1% increase or a 50% increase, depending on your perspective – would raise the current premium tax of 2% to 3% on all revenue from fully insured products in the State of Washington.
The proposal was to cover a projected annual revenue of $50 million dollars to operate the Exchange.
The proposed budget of $50 million came as a shock to many from all parts of the health care spectrum.
A well regarded consumer advocate from the left said privately that the number was “an embarrassment.” A key conservative legislator I spoke with a day later said it was “simply ridiculous.”
I’ve not heard anyone yet call the budgeted amount “reasonable.” Instead, here is what I have heard over the last week as folks have started talking about it.
The Exchange wants $50 million to run a website?
They really have no idea how this will impact the marketplace.
This is joke, right? How can they justify that amount – to say nothing of the budget context that proposal is going into?
That said, I’m sure there will be quite a bit of ongoing discussion on both the budget, and the challenge of identifying how to make the operations of the Exchange sustainable. The Exchange is due to provide a report to the legislature by December, though the administration is putting together the governor’s budget submission now.
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