Surprise: New insurance fee in health overhaul law

Topics: From the Wires,

Surprise: New insurance fee in health overhaul lawFILE - This March 23, 2010 file photo shows Ttwenty two pens next to President Barack Obama as he signs the health care reform bill in the East Room of the White House in Washington. Your medical plan is facing an unexpected expense, so you probably are, too. It's a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama’s health overhaul. The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest company health plans, and much of that is likely to be passed on to employees. Multiple pens are used to sign legislation, and then distributed to supporters of the legislation. (AP Photo/Charles Dharapak, File)(Credit: AP)

WASHINGTON (AP) — Your medical plan is facing an unexpected new fee. It’s to help cover people with pre-existing conditions under President Barack Obama’s health care overhaul.

The $63-per-head fee — buried in a recent regulation —will hit health plans serving an estimated 190 million Americans, mostly workers and their families. It’s payable starting in 2014.

Employers are not happy. The cost of compliance works out to tens of millions of dollars for the largest companies, maybe a few hundred for small firms. Most of that will get passed on to workers.

The Obama administration says the money will cushion health insurance companies from the hard-to-predict costs of covering uninsured people with pre-existing conditions, so society will benefit in the long run.

The fee is temporary, raising $25 billion over three years.

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