It’s kinda scary how accurate state economists were in projecting revenues for next year’s budget. When they met Tuesday, they adjusted their general revenue forecasts by a mere 0.5 percent from December.
But one area they were a bit off was estimating the insurance premium tax. On Tuesday, economists acknowledged that they reduced the amount of revenue the tax will bring in this year by $82.8 million and another $41.3 million in next year’s budget.
And who can blame them from anticipating such fat revenue from the insurance premium tax?
Remember all the speculation and anecdotes about runaway insurance premiums once the Affordable Care Act was implemented? There was CNN Money, in a widely-circulated 2013 piece, predicting that Florida’s premiums would skyrocket 35 percent. Florida Blue, the state’s largest carrier, announced last year it was increasing its rates by 17.4 percent. The Republican Party of Florida ran an ad last year that predicted premiums were going to jump by as much as 30 percent. When pressed by PolitiFact (which found the ad’s claim “mostly false”), party officials cited a Morgan Stanley survey that showed Florida was seeing a 37 percent increase in individual plans and a 21 percent increase in small group plans.
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No wonder they estimated such a spike in tax revenues.
But as state chief economist Amy Baker explained Tuesday, forecasters overestimated just how high the premiums would go. On Tuesday, they made the necessary corrections to their corresponding tax revenues.
“We’re assuming a little bit cheaper policy prices than what we originally anticipated when we put our estimate together,” Baker said. “There’s some more behavioral changes than we originally thought would exist. We did see some shifting of individuals who had policies go over into the marketplace to find something that’s more affordable for them. We did see some shifting among very small businesses that felt like (ACA) was offering a better option for their employees than what they could offer through their business. So some of those behavioral changes we weren’t anticipating, and it did bring down the estimate (of what the state was anticipating to collect) we had associated with that originally. We’re just now starting to see the first bits of data.”
So at least for now, Obamacare isn’t leading to skyrocketing premiums in Florida. SCOTUS permitting, plan accordingly.