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Making Sense of Health Care Reform

What this Bill Does For You -excerpts from Health Care On a Budget by Dr. Linda Petter

Immediate changes

• Insurance companies cannot drop you from your insurance coverage if you get sick. It will be against the law for an insurance company to drop you from coverage if you become seriously ill of develop a life-threatening condition such as cancer. • Taxes will go up immediately. The IRS will be more involved in your life, by collecting this fee and making monthly calls/checks to ensure you and/or a business have approved government health insurance, or face a fine. The IRS will collect this money and send it to health insurance companies. The IRS will employ around 17,000 people for this job. • Insurance providers must offer “free” preventative care. As a result of this new law, health insurance companies will have to cover all recommended preventive care, without charging you a copay or deductible. Exactly what tests will be included will be decided by a panel of individuals appointed to the United States Preventative Service Task Force, a branch of the US Department of Health and Human Services. Anticipated services covered will likely include physicals, vaccines, cholesterol screening, DEXA bone test and cancer screening.

However, be aware, as there are a few catches. The insurance requirement does not go into effect until the end of September 2010. This rule will apply to new insurance policies only. Therefore, unless you upgrade your current program or switch to a new one, you will not receive these free services. The one exception is with Medicare. Beginning January 1, 2011, all Medicare enrollees automatically receive these additional benefits.

• Caps on life-time insurance benefits are eliminated. As a result, your insurance will have to pay your bills even if you exceed prior maximum limits. No doubt, this will significantly decrease the number of people and/or families filing for bankruptcy. • Subsidies begin for small business owners (defined as 50 employees or less) to help offset the cost of providing health insurance to their employees. • Young adults can remain on their parent’s health insurance plan up until the age of 26. This program begins September 2010. Parents who are covered by Medicare are excluded from this program. In most other situations, adding a young adult to an existing insurance plan will typically result in just a small increase in a monthly insurance premium. • Insurance companies cannot deny insurance coverage for preexisting illness for children (note the exact start date is still under debate). • Insurance Pools Temporary state insurance pools will be available from June of 2010 until January 1, 2014. If the state does not wish to participate and run this program, the federal government will hire a nonprofit company to run it or take full control. The purpose of these insurance pools is to provide affordable health insurance to individuals who otherwise have not been able to afford it in the past.

In order to qualify for this new program, you have to have been uninsured for at lease sic month and have a pre-existing medical condition. Insurance premiums will be a fixed standard rate, with minimum benefits, and a cap on out-of-pocket cost not to exceed $5950 annually for an individual.

At this time, 35 state operate high-risk insurance pool programs. Provdied theses states make changes to meet federal guidelines, 5 billion dollars has been earmarked to help states pay for medical claims generated by these new insurance pools.

• Aid for Early Retirees

As of June 1, 2020 until January 1, 2014, individuals who have chosen to retire early may qualify for a government financial assistance program through their former employer. Five billion dollars has been set aside for this program to assist people who have chosen to retire early, are 55 years or older, and do not yet qualify for Medicare. The purpose is to help reduce monthly premiums, co-pays, and/or deductibles, therefore making it more affordable to continue their current health insurance program. If your employer has signed up for this program, the government will reimburse employers 80% of a claim ($15,000 to $90,000 per year). For more information contact your employer.

Future Changes • People may begin paying premiums into a long-term care program for at least 5 years, therafter becoming eligible for assited payments if they require aid in daily living. • In 2013 Medicare payroll taxes will increase on individual income exceedomg $200,000 per year, and couples filing jointly earning over $250,000 annually. • In addition, taxes on wages with increase from 1.45% to 2.35%. A new tax of 3.8% will go into effect on interest earned and dividends. • As of January 1, 2013, a new 2.0% tax will be imposed on the sale of certain medical devices/equipment. This tax will be enforced on the sales of Class I, II, and III products. Examples of Class I: elastic bandages and enemas Examples of Class II: electric wheelchairs, pregnancy tests Examples of Class III: breast implants, pacemakers. However, retail products sold to individuals will be exempt from the new tax. • In 2014 an individual mandate will require all Americans to purchase and retain health insurance, or face a fine. The penalty will be 2.5%of taxable income, or $695, whichever is the greater amount. Federal subsidies to help pay this cost wil be available for those that meet low income requirements. The federal poverty level is considered $22,000 or less for a family of four. Individuals at the 133% poverty levele will pay a maximum of 3% of their inscome for insurance coverage, and those at 400% poverty level will pay up to 9.5% • In 2014insurance companies will no longer be able to deny any adult insurance coverage for preexisting conditions. • In 2014 Small businesses that employ 50 people or more must provide health insurance for their employees or face a fine. The fine will be $3000 per employee (excluding the first thirty) However, a business with 10 or fewer employees, with average wages less than $25,000, can receive a tax credit of up to 50% of the employer’s annual contributions • In 2018 “Cadillac” health insurance plans, valued at more than $10,200 for an individual and $27,500 for a family, will begin being taxed at 40% annually.