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.

Recently President Obama said he wants to meet with both Democrats and Republicans to sift through the best health care ideas from both sides.  He challenged Republicans—who to this point have opposed Obama’s health care bill—saying, “if you have a better idea, show it to me.”  In an attempt to answer the call, former Speaker of the House Newt Gingrich and John Goodman, CEO of the National Center for Policy Analysis, laid out ten ideas for Obama to consider in a recent Wall Street Journal op-ed.

The WSJ article begins by stating that “the best ideas out there are not those that were passed by the House and Senate last year, which consist of more spending, more regulations and more bureaucracy. If the president is serious about building a system that delivers more quality choices at lower cost for every American, here’s where he should start:”

Make insurance affordable – The current taxation of health insurance is arbitrary and unfair, giving lavish subsidies to some, like those who get Cadillac coverage from their employers, and almost no relief to people who have to buy their own. More equitable tax treatment would lower costs for individuals and families. Many health economists conclude that tax relief for health insurance should be a fixed-dollar amount, independent of the amount of insurance purchased. A step in the right direction would be to give Americans the choice of a generous tax credit or the ability to deduct the value of their health insurance up to a certain amount.

Make health insurance portable – The first step toward genuine portability—and the best way of solving the problems of pre-existing conditions—is to change federal policy. Employers should be encouraged to provide employees with insurance that travels with them from job to job and in and out of the labor market. Also, individuals should have the ability to purchase health insurance across state lines. When insurers compete for consumers, prices will fall and quality will improve.

Allow doctors and patients to control costs – Doctors and patients are currently trapped by government-imposed payment rates. Under Medicare, doctors are not paid if they communicate with their patients by phone or e-mail.  Medicare pays by task—there is a list of about 7,500—but doctors do not get paid to advise patients on how to lower their drug costs or how to comparison shop on the Web. In short, they get paid when people are sick, not to keep them healthy.

So long as total cost to the government does not rise and quality of care does not suffer, doctors should have the freedom to repackage and reprice their services. And payment should take into account the quality of the care that is delivered. Once physicians are liberated under Medicare, private insurers will follow.

Inform consumers – Patients need to have clear, reliable data about cost and quality before they make decisions about their care. But finding such information is virtually impossible. Sources like Medicare claims data (stripped of patient information) can help consumers answer important questions about their care. Government data—paid for by the taxpayers—can answer these questions and should be made public.

Eliminate junk lawsuits – Last year the president pledged to consider civil justice reform. We do not need to study or test medical malpractice any longer: The current system is broken. States across the country—Texas in particular—have already implemented key reforms including liability protection for using health information technology or following clinical standards of care; caps on non-economic damages; loser pays laws; and new alternative dispute resolution where patients get compensated for unexpected, adverse medical outcomes without lawyers, courtrooms, judges and juries.

For the full list of GOP proposals to President Obama, click here.  And if you’ve got some ideas of your own, we’d love to hear them; just leave a comment below.

Since Scott Brown’s win in the Massachusetts Senate race broke the Democrats’ filibuster-proof Senate majority, President Obama’s health care bill has been reeling.  In an attempt to revive his health care agenda, Obama has invited both Democratic and Republican leaders to discuss possible compromises in a televised gathering on February 25^th.

The Associated Press reports that “Obama’s move came amid widespread complaints that efforts so far by him and his Democratic allies in Congress have been too partisan and secretive.”  Backlash stems from closed door deals that gave kickbacks to secure favorable votes, especially glaring since Obama initially suggested that health care debates should be televised on C-SPAN.

As the AP reports, “The meeting’s prospects for success are far from clear. GOP leaders demanded Sunday that Democrats start from scratch, and White House aides said Obama had no plans to do so.”

Many liberal groups want Congress to employ their lawmaking muscle to enact health care reform by reconciliation, a measure that can bypass Republican support.  But while President Obama has remained adamant about passing a health care bill similar to what passed in the House and Senate, lately he’s shown more willingness to consider Republican input.  In an interview with CBS’s Katie Couric, Obama said that he wants to look at the best ideas from both parties and arrive at some agreements.

But such agreements won’t come easily.  The White House maintains that “Obama does not intend to restart the health care legislative process,” whereas Senate Minority Leader Mitch McConnell speaks for many Republicans when he says that “if we are to reach a bipartisan consensus, the White House can start by shelving the current health spending bill.”

As the push for health care reform has stalled since the election of Republican Scott Brown in Massachusetts, conservative lawmakers across the country are advocating constitutional amendments to ban government health insurance mandates.

The mandates in question, separate bills passed by the U.S. House and Senate, would impose fines on people who elect to go without health insurance.  Their aim is to expand the pool of insured citizens by making coverage mandatory, which could help to offset the high costs of insuring those with preexisting conditions and more serious health care needs.  But those wanting to ban such mandates believe that the federal government has no authority to force citizens to purchase anything, including health insurance.

The Associated Press reports that according to the American Legislative Exchange Council, “legislators in 34 states have filed or proposed amendments to their state constitutions rejecting health insurance mandates.”  In many states, “the proposals began as a backlash to Democratic health care bills in Congress.  Instead of backing away after a Massachusetts election gave Senate Republicans the filibuster power to halt the health care legislation, many state lawmakers are ramping up their efforts with new enthusiasm.”

So while federal health care legislation has slowed, conservative state legislators have stayed busy, trying to thwart the Democrats’ efforts to force coverage upon Americans. “We need to move ahead no matter what kind of maneuvering continues in Washington, D.C.,” said Missouri Senator Jane Cunningham.

Just one week removed from Republican Scott Brown’s lopsided win in the Massachusetts Senate race, healthcare reform is more confusing than ever.  The administration has vowed to press ahead with healthcare legislation, while opponents of the bill are urging President Obama to simply start over.

According to the LA Times, White House senior advisor David Axelrod said that the “president will not walk away from the American people, will not hand them over to the tender mercies of health insurance companies who take advantage of them.”  Equally strong words were issued by Senate Minority Leader Mitch McConnell of Kentucky, who counters that “what we need to do is start over and get it right.”

Both Republicans and Democrats continued to dispute the message and effect of Scott Brown’s win last week. The loss has shaken Democrats, who lost a Senate seat entrenched in the Democratic Party for nearly 50 years, but don’t see the loss as public disapproval of the health care bill, as Republicans do.  Senator Jim DeMint, a South Carolina Republican and a vocal opponent of the healthcare plan, said that “Massachusetts was a rejection of the president’s massive policies of spending and debt.”

Obama’s 2008 campaign manager, David Plouffe, wrote in a Washington Post op-ed that Democrats must “pass a meaningful health insurance reform package without delay.”  But according to McConnell, “Republicans want to start over on a bipartisan basis with legislation that would reduce malpractice lawsuits and allow individuals to deduct the cost of their coverage from their taxes the way corporations can.”  So the existing legislation, “with its huge price tag, is a nonstarter,” he said.