Saturday, March 27, 2010
• the exclusion of pre-existing conditions ceasing for everyone (permanently for children),
• rescinding health insurance coverage to avoid paying claims prohibited,
• help for companies in reducing the cost of covering early retirees age 55-64,
• setting a target amount insurance companies must pay out in claims vs. administrative expenses,
• encouraging investments in new therapies, a small business tax credit (up to 35%),
• a cracking down on fraud, and
• rebates to seniors caught in the Part D prescription drug “gap”.
Next, the areas addressed in 2011 are improving health care quality, establishing innovative payment and service models to reduce costs and create efficiencies, increased payments to primary care and surgeons for seniors, and reforms to Medicare Advantage. This is where the improving of preventive health care, the expansion of primary care, nursing, and the health care workforce also begin.
During 2012, the linking of hospital payments to quality outcomes and the integration of health care systems to gain additional efficiencies is addressed. The work of raining in health care costs expands in 2013 with improved electronic exchange of information, the removing of many tax loopholes, and the limiting of executive compensation (no more multi-million dollar bonuses to the insurance fat cats!).
While the provisions addressed in 2014 may be harder to swallow for some, they are critical to paying for the benefits obtained under the health care reform. Citizens will be required to have health coverage or face the consequences. We will see the establishment of health insurance exchanges and introduces penalties for individuals who do not obtain coverage (exchange vouchers are available to those full time workers not offered coverage at work), a requirement that employers with 50 or more employees who do not offer coverage to their employees pay $2,000 annually for each full-time employee over the first 30. While the second phase of the small business tax credit begins here, the real “teeth” of the new health care law are felt in 2014 by individuals and businesses alike. It is not until 2018 that we finally see the excise tax on high cost employer provided health plans become effective.
It is the responsibility of everyone affected, in particular the insurance consultants and tax professionals involved, to clearly understand and then communicate the facts of the 2010 Health Care Law when questioned. Both the positive and negative impact of the law will be real and are best dealt with in a mature and professional manner.
Posted by Doug Interlandi, CLU, ChFC, CFP