There goes the affordable part of health reform. The insuranceindustry is warning a new tax in the Patient Protection andAffordable Care Act will cost consumers thousands of dollarsbecause of rising premiums.

According to a study conducted by Oliver Wyman for America'sHealth Insurance Plans, the new health insurance tax will increasethe cost of health care coverage by as much as $7,000 over the next10 years.

The PPACA imposes a new sales tax on health insurance thatstarts at $8 billion in 2014, increases to $14.3 billion in 2018,and will continue to increase each year. The Joint Committee onTaxation estimates that the health insurance tax will exceed $100billion over the next decade.

“With full implementation of the ACA a year away, the focusneeds to be on making coverage more affordable,” says AHIPPresident and CEO Karen Ignagni. “Taxing health insurance will havethe opposite effect by making it more expensive.”

Ignagni says the health insurance tax will increase costs forindividuals and families purchasing coverage on their own, smallbusinesses, Medicare Advantage beneficiaries and Medicaid managedcare programs.

The report found that premium increases will vary by state, buton average, the cost of a family plan sold through a large employercould cost about $7,200 more over 10 years—about $720 per year.

Families purchasing coverage in the individual market will behit the hardest in New York while those getting coverage from asmall employer will be most impacted in West Virginia. MedicareAdvantage beneficiaries in New Jersey and the Medicaid managed careprogram in Washington, D.C. top those lists.

California tops the states that will have the highest averageaggregate impact. AHIP estimates the tax will raise costs forCalifornia consumers and employers by $22 billion.

AHIP is encouraging Congress to pass H.R. 1370, legislation thatwould repeal the tax.

This article was originally posted at BenefitsPro.com, a sister siteof Credit Union Times.