Now that health care reform has passed, people want to know how they will be affected and when they will feel these effects.  Some measures will be noticed almost immediately, while others won’t be seen for a few years, or longer.  To prepare consumers for these changes to their health care, moneywatch.com suggests what people can do now to ensure they’re ready for some key measures outlined below.

Expanded Coverage for Dependents

On September 23, 2010, kids will be allowed to remain on their parents’ health plan until their 26^th birthday, provided they’re not already covered by their own employer plan.  If a child age 25 or younger has been dropped from your plan, ask your insurer how to get him or her reinstated.  If this causes your premiums to rise significantly, compare the price increase with policies sold on the individual market to ensure you receive the best plan at the best price.

Reducing the Medicare “Doughnut Hole”

Currently, once seniors have spent $2,830 on prescription drugs, they then have to pay the next $3,610 in prescription bills out-of-pocket until coverage kicks in again at $6,440.  This costly gap in coverage is known as the “doughnut hole.”  Now, seniors who fall into the doughnut hole in any calendar quarter this year will receive a $250 rebate check.  Next year, seniors will receive discounts on prescription drugs, and more discounts will be applied until the doughnut hole is closed.  To prepare for this, people should save all Medicare documentation and prescription bills to prove they’re entitled to the rebates.

Cuts to Medicare Advantage Plus

Over the next three to seven years, government subsidies to Medicare Advantage Plus plans, which provide coverage and additional benefits to 11 million seniors, will be cut by $136 billion.  To prepare, seniors are encouraged to keep track of their Medicare renewal period.  Because prices and services could vary significantly from plan to plan as these changes take effect, seniors might need to make a new decision each year about whether to change plans.

Limits on Flexible Spending Accounts

On January 1, 2013, contributions to Flexible Spending Accounts (FSAs) will be capped at $2,000, and reimbursement for non-prescription drugs will no longer be allowed.  If you want to put away more money for medical costs, consider a Health Savings Account (HSA) instead of or in collaboration with your FSA.   HSAs allow you to save pre-tax money for future medical costs, and unlike a use-it-or-lose-it Flexible Spending Account, HSAs roll over from year to year.  To be eligible for an HSA, you simply need to pair it with a high deductible health insurance plan.

New Tax on Investment Income

Starting January 1, 2013, individuals who make more than $200,000 a year—or couples who earn more than $250,000 together—will be hit with a new 3.8 percent tax on investment income like dividends, interest and royalties.  To combat this, people can invest in tax deferred investments like municipal bonds or Roth IRAs.

In addition to the above measures, there are many other changes to be aware of as health care reform rolls out.  Visit moneywatch.com for more details on how to begin planning for the expected changes to your health care and finances.

The year-long health care reform debate and political maneuvering has finally culminated into the Obama administration passing its health care bill.  And since the 2,700 page bill was too unpopular to pass through traditional legislative means, the Democrats used their majority and a political tactic called reconciliation to jam the bill through Congress without any Republican support. In the final roll call, no House Republican voted for the bill, and 34 House Democrats voted no.

In all my years working in the Texas health insurance industry I cannot recall a more unpopular, ill-conceived and financially irresponsible bill passing through Congress.  The magnitude of this legislation is unprecedented in terms of an American government’s exertion of power over its people and its display of “we-know-what’s-best-for-you” arrogance.  Even worse, the idea that this version of health care reform will improve coverage and access to coverage while reducing costs is simply not true, if not totally comical. How can the government add 35 million people onto the health rolls of the already overburdened emergency rooms and amid a serious doctor shortage without  long waiting lines and rationing?  If this is what change looks like, then Mr. Obama, you can keep it.

All figures of cost savings used by Obama and his administration come from the Congressional Budget Office (CBO), which conducts its analysis in a vacuum.  For example, the CBO must tally all assumptions from the health care bill, reasonable or not, including the ridiculous notion that $500 billion in savings will be gleaned by reducing “fraud and waste” from Medicare.  The government uses this large sum, and several others, to counteract its spending, thereby reducing the stated cost of health care reform.  It’s a way for the government to hide hundreds of billions of dollars of spending from the American public.  Upon removing such gimmicks, the former director of the CBO predicts deficits of $562 billion over the first ten years.  So rather than reduce the federal budget deficit, the overhaul of our nation’s health care system will push us further into a hole from which we may never resurface.  Many pundits feel that this will be the final nail in the coffin that bankrupts our country, and I happen to agree.

Equally as intimidating as this financial burden on us and future generations is the blatant infringement on our personal liberties.  By passing this bill, Congress is effectively mandating that all Americans must purchase health insurance, or be subject to a fine.  Forcing people to buy insurance is unprecedented, and arguably unconstitutional.  Our government has always taxed us on things we do buy, like cigarettes or automobiles, but taxing us on what we don’t buy?  That’s a frightening, slippery slope.

ObamaCare by the Numbers

John Goodman, president and CEO of the National Center for Policy Analysis, pokes some holes in ObamaCare, including the notion that, as Obama has repeatedly stated, people who like their insurance plan can keep it.  But the Lewin Group, a health care and human services policy research and management consulting firm, estimates that 19 million people will lose their employer plan.  And more than eight million seniors are predicted to lose their Medicare Advantage plan, according to the Medicare Chief Actuary.

Another Obama sound bite was that no one earning less than $200,000 would experience any tax increases.  The reality though, according to the Joint Committee on Taxation, is that approximately 73 million people earning less than $200,000 can expect to pay higher taxes to support the health care bill.

And what about reducing cost burdens on individuals and families?  Insurance companies estimate price increases ranging from 54 percent to 111 percent for individuals, and the CBO predicts a $2,100 increase in insurance premiums for the average family.

This isn’t health care reform.  It’s health care overhaul.  And it just might be the biggest abuse of government power I’ve ever seen.

Richard Monello
President/CEO, Custom Health Plans, Inc.