As mentioned in an earlier post, I went to my gym earlier in the week and found out that they were discontinuing offering the tanning bed to members, starting in May. This was the first ripple from the new health care law - there will be a 10% tax on indoor tanning services, and so my gym is simply dropping the service rather than dealing with the administrative headaches of collecting and reporting the tax. So, I have been digging around to try to separate the wheat from the chaff in the debate, and find out what else we can expect, and when we can expect it. Obviously, I cannot capture the entire law and its ramifications in this article - the sea is so large and my boat is so small - but I have tried to distill out the essence. So here goes:
2010 -No denial of coverage to children based on preexisting conditions.
-Children allowed to stay on their parent's insurance plans until age 26.
-$250 rebate for Medicare beneficiaries who hit “donut hole" ($2,830 annual prescription drug limit)
- Adults with pre-existing conditions eligible for temporary high-risk pool (superseded in 2014 by health care exchange program)
-Insurers prohibited from charging co-pays or deductibles for preventive care and medical screenings on NEW insurance plans (existing plans grandfathered till 2018).
-Insurers are prohibited from dropping policyholders when they get sick
-New website at Dept. Health and Human Services will provide consumer insurance information for individuals and small businesses in all states
2011 Seniors in “donut hole" ($2,830 annual prescription drug limit) will receive a 50 percent discount on brand name drugs.
2013 3.8% Medicare Payroll Tax on investment income (interest, dividends, annuities, royalties, capital gains and rents) for individuals who earn more than $200,000 annually and joint filers reporting more than $250,000.
2014 -Everyone must purchase health insurance or face a $695 annual fine; exemptions for financial hardship or religious beliefs
-Subsidies to purchase insurance for individuals with income up to 400% of the poverty line.
-Tax penalty ($2000 per employee) on employers (over 50 employees) who do not offer health insurance to their workers.
-Medicare Payroll withholding increases from 2.9% to 3.8% on earned income.
-Qualifying medical expenses income tax deduction increases from 7.5% to 10%
-No lifetime and annual limits on coverage
-No denial of coverage to anyone with preexisting conditions.
-Exchanges created for small businesses to purchase coverage
-States expand Medicaid to include childless adults. Federal Government pays 100 percent of costs for covering newly eligible individuals through 2016.
2018 -Insurance companies will pay a 40% excise tax on "Cadillac" high-end insurance plans worth over $27,500 for families ($10,200 for individuals).
-All insurance plans will provide coverage for preventive care and checkups without co-payment.
The official name of the Act is the "Patient Protection and Affordable Care Act of 2010" in the event you want to google it and look for particular provisions. Certain provisions of the Act have already been challenged in court - the focus is the "individual mandate" - can the federal government order you to buy health insurance and fine you if you do not? No legal scholars on either side suggest that the government cannot accomplish virtually all of what this new law proposes - the further regulation of health care and insurance - by passing the law and then raising taxes to pay for it. However, the new law, while it raises certain taxes, avoids raising income taxes on "the middle class" to pay for the expanded coverage by instead requiring each individual to buy insurance. The result is that this is not a "tax", but an "individual mandate". That explanation is sufficient for some, and deficient for others. The Supreme Court will eventually sort it all out.
©2010 Douglas P. Humes
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