Obama’s Health Care Reform

Health care reform was a top priority of President Obama and it has been very apparent
as he has been very determined to sign his reform bill into law on March 23 rd, 2010.
There really are a lot of changes that will likely be affecting every American.

Here is the timeline for the health care reform changes and how Obama’s health plan
(”ObamaCare”):

New Health Care Bill: Changes Happening in 2010

• Children age 26 and younger will be able to remain covered under their parents
health insurance plans (this is increased from past age limits which were
anywhere from age 22-25)

• Medicare recipients will receive a $250 rebate to help in closing the “doughnut
hole” (with the goal being to close the doughnut hole completely by 2020).

• Health insurance companies will be banned from excluding coverage for pre-
existing conditions for children.

• Adults with pre-existing conditions will be eligible for coverage into high risk
health insurance pools until future health care exchanges are up and running.

• Health insurance companies will be prohibited from levying annual limits and
lifetime limits on coverage.

• All new health insurance plans must provide coverage for preventative services
with no out of pocket cost (all health plans will be forced to comply by 2018).

• Those companies that offer health benefits for early retirees ages 55 to 64 will
receive assistance from a temporary reinsurance program.

• All new health insurance plans will have to comply with new regulations that lay
out an appeals process for when health insurance claims are denied.

• Small businesses that employ less than 50 people are eligible for a tax credit
equal to 35% of their health insurance premiums (this increases to 50% by
2014).

New Health Care Bill: Changes Happening in 2011

• Medicare will offer wellness visits for free one a year and personalized prevention
plans. All new Medicare plans will offer preventative services with no out of
pocket cost.

• Seniors enrolled in Medicare Advantage or the Prescription Drug Plan will

receive a 50% discount on brand name drugs immediately with additional
prescription drug discounts to follow.
 • The current penalty tax of 10% on all distributions from a Health Savings Account
before the age of 65 on nonqualified medical expenses will increase to 20%.

• A small business alternative to a cafeteria plan will be presented so that small

businesses can offer tax free benefits without having to deal with the
administrative costs of a cafeteria plan.

• Everyone earning more than $200,000 as an individual or $250,000 for those

who file married filing jointly will have their Medicare payroll tax increased from
the current 1.45% to 2.35%.

Health Care Bill: Changes Happening in 2013

• A $2,500 annual cap will be placed on all contributions to flexible spending

accounts (amount indexed for inflation each subsequent year).

• The current tax deduction that employers receive for subsidizing the prescription
drug costs of their employees who are eligible for Medicare Part D will be done
away with.

• A 2.9% excise tax on the sale of medical devices will be put into place. Certain
common items like glasses, hearing aids, etc. are exempted from this tax.

• The hospital insurance tax will increase .09% for those who earn more than
$200,000 ($250,000 for those married filing jointly).

• Additional requirements on health insurance companies to implement uniform

standards for exchanging health care information, electronic communication, and
other measures to reduce insurance company administrative costs.

• The minimum threshold for being able to claim an itemized deduction for health
care expenses increased from 7.5% to 10% of AGI although those over the age
of 65 can stay at the 7.5% threshold through 2016.

Health Care Reform: Changes Happening in 2014

• All US citizens will be forced to have health insurance coverage considered

acceptable by the US Government or else pay a fine of $95 in 2014, $325 in
2015, $695 in 2016 (capped at 2.5% of AGI). All of the fines are per person per
year except for families have a cap on the total fine of $2,250 and the fine
amount for children is half of the adult fine.

• Eligibility standards are implemented for newly formed health care exchanges.

• Businesses with 50 or more employees will face a fine of either $2,000 or $3,000
per employee for not offering health insurance coverage.

• Group health insurance plans have a maximum waiting period of 90 days.

 • Health insurance companies are prohibited from using an individual’s health
status to issue a policy or renew a policy. All pre-existing conditions must be
covered and higher health insurance rates cannot be levied because of health,
gender, etc.

• The eligibility standards for Medicaid will be changed to 133% of poverty for
those who are not considered elderly.

• New annual fees will be levied on all health insurance providers based on an
insurance companies market share and whose total premiums exceed $25
million.

Health Care Reform Bill: Changes Happening in 2018

The “Cadillac” health insurance plan tax will kick in. An excise tax will be levied on all
employer provided health insurance plans costing more than $27,500 for families and
$10,200 for individuals (with increased limits for those considered to be in “high risk”
professions).

Here's a look at how six groups will be affected:

1. The uninsured

The poorest adults —about $29,327 for a family of four — will qualify for Medicaid, the
federal-state program for the poor and people with disabilities.

The premiums will range from 2% to 9.5% of family income, and the poorest families will
pay the least.

2. Medicare beneficiaries

Seniors who reach the coverage gap will be eligible for a one-time, $250 rebate. Starting
next year, brand-name drug prices will be discounted 50% during the coverage gap
period. Every year until 2020, the discount will be increased, until the benefit reaches
75% of the cost.

The measure includes other benefits for seniors, including free preventive services such
as cancer screenings and funding for states to improve community services for people
with disabilities.

Yet seniors who use Medicare Advantage plans — private plans combining hospital,
physician and drug coverage — could see their premiums increased or benefits reduced.
That's because the law reduces Medicare payments to those plans.

3. Upper-income taxpayers

If a law costs nearly $100 billion a year, someone has to pay. In this case, that mostly
means the wealthy. The biggest tax increases will come in Medicare payroll taxes.
Single people earning more than $200,000 and couples starting at $250,000 will pay
0.9% more on their wages and self-employment income.
For people at those income levels, all their investment earnings will be taxed 3.8%,
marking the first time the hospital insurance tax has hit non-wage income.

The other major tax increase hits the most generous health plans. Those don't apply just
to upper-income people. State employees and other union workers have won excellent
health coverage in recent years rather than big pay increases.

Starting in 2018, family insurance plans valued at more than $27,500 will pay a 40% tax
above that level.

The goal is for employers to reduce the "Cadillac" benefits, rather than pay the tax.

4. Young adults

Young adults will be among the early beneficiaries of the law, which requires insurers to
extend parental coverage to children until they turn 26.

Beginning in 2014, young adults will be required to purchase insurance or face tax
penalties. Those will be phased in, reaching $695 per year by 2016 for an individual or
2.5% of household income, whichever is larger. Young adults will be eligible for
subsidies, though, if they meet income.

5. People with health problems

Beginning later this year, insurers will no longer be able to refuse to insure children with
pre-existing medical conditions, such as asthma, heart defects or cancer.

Protections for adults with pre-existing conditions won't take effect until 2014, but the
legislation calls on federal health officials to create a national high-risk insurance pool
program that they can buy from this year. Unlike some existing state high-risk pool
programs, which can be expensive, the new program is supposed to keep rates closer to
standard premiums paid by healthy people.

The legislation also prohibits insurance companies from canceling coverage for people
who develop costly health problems. It eliminates lifetime caps on covered medical
expenses in six months.

6. People with employer-sponsored insurance

People who have good health coverage through their employer can keep it. They also
will get additional protections such as the end of lifetime coverage limits.

For employees who lose their jobs, beginning in 2014 they can buy affordable insurance
through the health care exchanges. The insurance will have to meet minimum coverage
standards.

Summarizing, in one hand:

• Poor adults will get Medicaid.

• Low-income families will get federal subsidies to buy insurance.

 • Small businesses will get tax credits.

• Children will be able to stay on parents' policies until they turn 26.

• Seniors will gain additional prescription-drug coverage.

• People with medical conditions will gain peace of mind because insurers have to
cover them.

On the other hand:

• The wealthy will pay higher taxes to help finance the 10-year, roughly $940 billion
cost.

• Businesses with 50 or more workers will have to insure them or pay a penalty.
Individuals, too, will have to pay a fine if they don't buy insurance.

• Premiums could rise for some people.

• Seniors with Medicare Advantage policies could lose those plans or pay more to
keep them.

Here are the top 10 facts we should consider abput this reform:

1. A Government Takeover of Health Care. The House Democrats’ plan will create a
new government-run program, will make health care more expensive, limit treatments
and ration care, and put bureaucrats in charge of medical decisions rather than patients
and doctors. Translation: higher costs, lower quality, and fewer choices for patients.

2. Forcing More than 100 Million Out of their Health Care. The House Democrats’ plan
will force more than 100 million Americans out of their current health care plan and onto
the government rolls. A Lewin Group study confirms that under a new government-run
health plan millions will lose their current health care coverage.

3. Rationing Health Care Treatments. The House Democrats’ plan establishes an

“advisory committee” that will put bureaucrats and politicians in charge of deciding
patient treatments and cures. Translation: The government will make health care
treatment decisions rather than doctors and patients.

4. A New Mandate on Individuals. The House Democrats’ plan mandates that every
American buy health insurance or pay a hefty tax to Washington. This would force more
Americans into government-run system that will make health care more expensive,
ration care, and put bureaucrats in charge of medical decisions.

5. A New Mandate on Employers. The House Democrats’ plan would impose employer
mandates and cost jobs by requiring some employers – especially small businesses – to
pay a new tax to Washington. The plan would also slap employers that are unable to
offer coverage the government deems adequate with another new tax to Washington.
These two new taxes will make it more difficult than ever for small business owners to
reinvest in their businesses and create and retain good paying jobs.
6. Harming Small Businesses. The House Democrats’ plan doesn’t yet define “small
businesses,” which is troubling news for millions of Americans who depend on these
engines of economic growth. One Democratic draft plan revealed to date only provides
assistance to ease employer mandates for small businesses with an average of 27 or
fewer employees. This leaves a huge number of small businesses to deal with the
onerous and expensive mandates of the Democrats’ government defined health benefit
plan (“small businesses” are traditionally defined as employing less than 500 people).

7. Expanding Entitlements. The House Democrats’ plan expands the Medicare and
Medicaid programs without reform, ignoring the pending insolvency of programs that
millions of seniors and families rely upon. These policies will result in benefit cuts and
premium increases for many Americans who depend on these programs.

8. Unfunded Mandates on States. The House Democrats’ plan creates new unfunded
mandates for already cash-strapped states by expanding Medicaid, forcing both the
federal government and states to pay more to finance this entitlement expansion. This
will leave states no choice but to raise taxes or reduce services for citizens of those
states.

9. How Many Taxes Will Democrats Raise? The House Democrats’ plan expands
benefits and includes massive new subsidies and government-dictated benefits, but it
doesn’t identify any significant savings to help pay for the new scheme, nor does it
acknowledge the massive new costs it will impose on individuals, employers, and states.
In the past, Democrats promised a series of new tax hikes to pay for their plan. How
many will there be? When do Democrats plan to reveal them?

10. Shifts Massive New Costs onto Taxpayers. The House Democrats’ plan represents
a bait-and-switch that will make health care more expensive and hit the middle class
particularly hard with higher taxes, rationed care, and new health costs. As millions of
middle-class families are struggling to make ends meet while making responsible
choices, this plan forces those that make responsible decisions to foot the bill for those
who don’t.

REFERENCES

 http://www.csmonitor.com/Business/Christian-Personal-
Finance/2010/0325/What-Obama-s-new-health-care-bill-means-for-us

 http://www.righthealth.com/topic/Obama_Health_Plan?
p=l&as=goog&ac=404#ixzz12pAXHlTt

 http://webcache.googleusercontent.com/search?q=cache:1-
1W0JbQoF8J:www.usatoday.com/news/washington/2010-03-22-health-
you_N.htm+hospital+insurance+tax+will+increase+
%25&cd=3&hl=en&ct=clnk

 http://gopleader.gov/News/DocumentSingle.aspx?DocumentID=131578