Congress finally reads the health bill and is nonplussed. Members don’t know where they are going to get their own health insurance.
New Obama risk pool will exclude everybody who is already in a risk pool. Premiums in the new federal pool are expected to be 10 percent to 50 percent lower than current state rates.
Bad news for the chronically ill: Starting in 2013 the annual limit that any employee may contribute to Flexible Spending Accounts will be restricted to $2,500.
Comparative effectiveness research may backfire. Because drugs affect different patients differently, eliminating the least cost-effective treatments could increase costs and harm health.
Most summaries of ObamaCare focus on the benefits of reform and when they phase in. The Karen Davis summary, for example, lists only benefits — as though the entire package was one big free lunch. Benefits must be paid for, however. Here is how paying for reform phases in:
2010
- 10% tax on tanning salons
2011
- Tax on brand name drugs ($2.5 billion).
- Medicare cut $1 billion ($22 per senior/disabled)
- Medicare Advantage cut $2 billion ($195 per senior)
- Increase in tax on non-medical Health Savings Account withdrawals from 15% to 20%
- Over-the-counter drugs become taxable ($400 million)
2012
- Tax on brand name drugs increased to $3 billion.
- Medicare cut $5 billion ($112 per senior)
- Medicare Advantage cut $6 billion ($585 per senior)
- Tax on Over-the-counter drugs ($600 million)
2013
- Taxes on wage income rises from 1.45 to 2.35% for singles earning more than $200,000 a year (families above $250,000).
- New tax on investment income: 3.8% for singles earning more than $200,000 a year (families above $250,000).
- New taxes on wheelchairs and other medical devices (2.9%)
- Flexible Spending Account contributions limited to $2500 annually
- Floor for deductible medical expenses increased from 7.5% of AGI to 10%
- Medicare cut $9 billion ($201 per senior)
- Medicare Advantage cut $9 billion ($877 per senior)
- Tax on Over-the-counter drugs ($600 million)
2014
- Individual Mandate: fine: $95
- Employer Mandate: fine: $2,000 per-worker
- Medicare cut $13 billion ($290 per senior)
- Medicare Advantage cut $13 billion ($1,267 per senior)
- Tax on Over-the-counter drugs ($600 million)
- Tax on health insurers ($6.1 billion)
Republicans are gleefully pointing out the middle-class tax increases in the Baucus bill. For example, there is the proposed tax on health insurance and the implicit tax that emerges from capping Flexible Spending Account (FSA) deposits at $2,500. The table below, compiled by the Republican Policy Committee, shows the expected federal revenue in 2016 from the penalty (tax) on uninsured people.
Source: Congressional Budget Office and the staff of the Joint Committee on Taxation.
The Ways & Means Committee document released last week would no longer allow Americans to pay for over-the-counter drug purchases using tax-free dollars from a health savings account (HSA), health reimbursement arrangement (HRA), flexible spending account (FSA), or Archer medical savings account (MSA).
This is from the National Center for Health Statistics:
In 2007, 17.3% of persons under 65 years of age with private health insurance were enrolled in a high-deductible health plan (HDHP), 4.5% were enrolled in consumer-directed health plans (CDHPs), and 14.8% were in a family with a flexible spending account (FSA) for medical expenses.
Health Care Policy and Reform Insights | NCPA
