December 3, 2012 11:34AM 

# ObamaCare’s Magical Premium Tax 

By [Michael F. Cannon](https://www.cato.org/people/michael-f-cannon) 

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The Department of Health and Human Services has announced it will unilaterally impose a ([legally questionable](https://www.cato.org/does-hhs-have-the-authority-to-tax-health-premiums-in-federal-exchanges/)) 3.5‑percent premium tax on health plans purchased through the ObamaCare Exchanges it operates.

[According to *The* ](http://www.nytimes.com/2012/12/01/health/health-insurers-will-be-charged-to-use-new-exchanges.html)*[New York Times](http://www.nytimes.com/2012/12/01/health/health-insurers-will-be-charged-to-use-new-exchanges.html)*, an HHS spokeswoman “predicted that insurers would not raise prices” in response to the tax.

If that’s the case, why not make it 35 percent?

##### Related Tags 

[General](https://www.cato.org/general), [Government and Politics](https://www.cato.org/government-politics), [Health Care](https://www.cato.org/health-care) 

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