Health Insurer Tax Gives Nonprofits Advantage, Holtz-Eakin Says

Fees that health insurers will be required to pay the U.S. government starting in 2014 will give nonprofits such as Kaiser Permanente a market advantage over corporate competitors, said economist Douglas Holtz-Eakin.

The fees -- starting at $8 billion and escalating each year based on the industry’s premium revenue -- aren’t tax deductible. While nonprofits don’t have an income tax, companies such as UnitedHealth Group Inc. would effectively be paying taxes on the fees they’re handing over to the government, said Holtz-Eakin, chief economist of the White House Council of Economic Advisers during the Republican Bush administration from 2001 to 2003.