A friend of mine who works for the health insurance industry has taken the time to read through the entire health care bill, and its addenda, and has posted a summary of its provisos on Facebook. With his permission, I am going to cut and paste the entire thing here. A few things to note: contrary to the fears some folks have expressed, this is NOT government-run health care, and therefore cannot be compared to VA-style care. Instead, it is an attempt to regulate PRIVATE health care companies in a way that is intended to offer a wider range of options and therefore insure more members of the American populace. It is not perfect; there are issues, and the actual enactment of this group of bills is likely to prove quite a mess in the short term. It is, however, a step this blogger thinks is headed in the right direction. Here is my friend's post, along with his own caveats at the top and at the bottom:
The Meat of The Healthcare Reform Bill - without all the talking heads, tea-baggers, and Obama cheerleading
Monday, March 22, 2010 at 9:10am
Notice: The opinions and information expressed within this post are purely my own and do not necessarily reflect those of my employer.
In light of the recent passing of Health Care Reform, this bill may effect me in many ways that are different to my friends and family members, since I work for the largest health insurance company in the Maryland/DC area. Having said that, I have read this bill, in its entirety, and would like to point out key elements that may help others understand exactly what this bill means. If I missed something, or you would like more clarification on a topic, just comment below.
What it means for business owners:
Many of these provisions won't take place until 2014, so if you're a business owner, you have time to prepare and figure out your "best course" of action. I'll break the changes down in bullet points to make it easier to follow.
1) States have to set up "Small Business Health Options Programs" (SHOP Exchange) - this will allow small business to pool together to buy insurance for their employees. This will be for businesses with fewer than 100 employees, but can be limited to 50 employees through 2016 for some states. As written, this only includes full-time employees, but there is an amendment on table, if passed, would also include part-time employees.
2) Prior to 2014, small businesses with 10 or fewer employees that earn less than $25,000 a year will be eligible for a tax credit of up to 35% on health insurance costs.
3) Tax credit for small businesses will be in place for 50% of the cost from 2014-2016 if the business buys into the SHOP Exchanges. This credit will decline sharply after 2016.
4) Starting in 2014, businesses will be required to offer health care to their employees, or pay a fine of $750 ($2000 if amendment passes the Senate) per full-time employee. This coverage would have to meet minimum benefits guidelines set forth by Congress and account for 60% of overall health costs of the employee.
What it means for individuals:
Again, many of these provisions don't take place until 2014. So we have time as individuals and/or families to determine what our best course of action is - or if our current coverage is "good enough".
1) Starting in 2014, insurers will no longer be able to set rates or exclude coverage based on pre-existing conditions or chronic illness
2) Effective immediately upon signing into law:
- Ban on lifetime limits of coverage (no maximums)
- Ban on cancellation of policies for any reason (excluding fraud)
3) High-end "Cadillac" insurance plans (costing more than $10,200 per year per individual or $27,500 per family) will be subject to a 40% tax on the portion that exceeds the policy pricing limit set forth by Congress. This tax would be paid by insurers, but is expected to be passed along to the consumer in the form of higher premiums. This would take place immediately, unless the amendment presented on Sunday passes the Senate, then it would take place in 2018.
4) By 2014, all individuals will be required to pay for health insurance or pay a penalty. This penalty would start at $95, or 1% of income, whichever is greater, and rise to $695, or 2.5% of income by 2016. This penalty is for individuals. For families, the penalty is set at a $2085 maximum. Some individuals would be exempt from this requirement due to financial hardships or religious beliefs, or if they are American Indians.
5) Beginning in 2014, Medicaid will be expanded for individuals who cannot afford traditional health insurance. Individuals making less that $14,404 or families making less than $29,326 would now qualify. Additionally, there will be premium subsidies available starting in 2014 for those who do not qualify for Medicaid, but still could not afford coverage. The amount of the subsidy is based on a sliding scale of income that falls between 133% and 400% of the poverty level.
6) If you are unmarried and under 26, you can still be covered on your parents' family plan as long as you do are not offered health insurance through your employer. This is effective immediately when signed into law. The current age limitation is 23 and requires the individual to be a student.
7) Medicare recipients will see an increase in assistance for medication costs. Those entering the Part D coverage gap (the doughnut hole) would receive $250 to help cover medication costs (This is a gap created by drug companies only offering a "brand" medication vs. a generic alternative - causing a drain on the maximum drug benefit). Drug company discounts and Federal subsidies for all drugs would gradually reduce the gap, eliminating it by 2020.
8) Medicare Advantage (the privatized portion of Medicare) enrollees will see a loss in benefits starting in 2011. Federal payments to this plan will be greatly reduced, resulting in the loss of certain benefits, including free eyeglasses, hearing aids, and gym memberships.
9) Medicare recipients would no longer be charged for preventive services, such as cancer screenings. This change would be effective immediately.
10) Based on the wording of premiums and the power of the insurance companies, there is reason to believe that premiums could and will increase for tobacco users, the elderly, and the healthy. This is because the bill prevents insurance companies from charging sick people more, nor can they drop coverage on "high-risk" individuals, such as tobacco users or older people.
What this bill means for America (taxes):
With sweeping change, comes great responsibility. There is always a price associated with any Government led program. Here are the bullet points of what this means for the country as a whole:
1) This bill has an estimated cost of $940 Billion over the next 10 years. Taxes will be raised over the next 10 years to help burden the cost, and payments to Medicare providers would be reduced, lowering the deficit to only $138 Billion over the next 10 years.
- Concern: lower payouts to Medicare providers may lead to less providers accepting Medicare
- Concern: increased taxes may effect overall consumer confidence and spending
Added by myself: Several independent offices, including the Congressional Budget Office, have observed that the net effect of the bills provisions, over the next ten years, will actually be to reduce the federal deficit, rather than adding to it. In the questions following this post on Facebook, I asked whether the reduced payout to Medicare was more than an attempt to reduce or eliminate Medicare fraud. The answer: The Medicare is indeed a reduction in fraud, but there is also a provision in the bill to reduce the amounts paid out to Medicare and Medicaid providers. This reduction will cause the dreaded inevitable wait times at clinics and doctors that primarily see Medicaid and Medicare patients that the opponents of Health Care Reform were afraid of, due to less doctors being willing to accept Medicare and Medicaid, instead opting for specialization fields or private practice. I add only that it is THOUGHT the result will be increased wait times; no one can see the future, but my friend's statement is certainly one of the more educated guesses I have seen. Were I to edit his statement, I might change it only to say that "This is likely to cause the dreaded wait times"...but I am not editing his words for the sake of complete clarity here.
2) Starting in 2013, individuals making more than $200,000 will pay a higher Medicare payroll tax (2.35%, up from 1.45%)
3) Medical deduction threshold for non-reimbursed medical expenses raises from 7.5% to 10%.
4) Starting in 2013, Flex Spending Accounts (FSA) will be limited to a maximum of $2500 for medical expenses.
5) Individuals earning more than $200,000 per year, or $250,000 per household, would be hit with a 3.8% tax on investment income to help pay for the bill.
6) Individuals who use Tanning Salons will be taxed an additional 10% starting this year.
Feel free to comment with CONSTRUCTIVE and USEFUL information or questions. Any comments that are unfounded rants or opinions will be deleted. Of course, educated opinions are welcome - as those tend to raise interesting conversation and possible questions/answers that others may not have come up with on their own. Be prepared to defend your comments, or you'll look like the crazy shouting people on Fox News and I'll just point and laugh at you. Here ends his post. I, too, welcome constructive commentary, and will also not tolerate flaming of any sort.
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