Agent discusses health care bill impact
Published 7:24 pm Friday, May 28, 2010
The national health care reform legislation pushed through byDemocrats earlier this year will remake the health care system inAmerica, but there’s no need for anyone to fret about it thisyear.
Everyone can wait until 2014 and then worry.
“The immediate changes are not anything to panic about,” saidlocal insurance specialist Dennis Valentine. “The changes that aredrastic, that really change the landscape, take place in 2014.”
Speaking to a well-attended session of the Brookhaven-LincolnCounty Chamber of Commerce’s monthly Small Business RoundtableThursday morning, Valentine gave a year-by-year breakdown ofreforms active and pending in the Patient Protection and AffordableCare Act, specifically information relating to small businessowners. Many changes active now and coming online this Septemberare subtle, but the legislation’s changes to the health care systembecome more and more radical as the years roll on.
The biggest group of changes is not extreme, and they occur thisyear. Changes seen in 2010 include the extension of dependentcoverage until age 26, the establishment of a high-risk healthinsurance pool for individuals with pre-existing coverage and theelimination of pre-existing condition exclusion for children.
Other tweaks taking place this year include rebates for theMedicare Part D “donut hole,” tax credits for small businesses anda new tax on indoor tanning services.
In 2011, taxes on withdrawals from health savings accounts willincrease from 10 percent to 20 percent, a simple cafeteria planwill be created to allow small businesses easier access to such aplan and employers will be required to report health coverage costson W-2 forms.
Taxes on medical devices will increase in 2013, along with taxeson hospital insurance for high-wage workers. That year will alsosee the elimination of the Medicare Part D subsidy andcontributions to annual health flexible savings accounts will belimited to $2,500.
Major reforms that are the cornerstone of the health care reformlegislation will be enacted in 2014.
Beginning that year, all Americans will have to carry healthinsurance or pay a fine, while businesses that employ 50 or moreworkers will have to offer coverage or pay a fine. Valentine saidindividual fines are based on income, while business fines are setat $2,000 per employee with the first 30 employees exempted.
“It seems to me it may be cheaper for some businesses to justpay the fine,” he said.
State health insurance exchanges will also be established in2014, and insurance companies will no longer be able todiscriminate against individuals because of health status. Healthinsurance provider fees will be assessed that year, andpre-existing condition exclusions for adults will beeliminated.
Smaller reforms remain after 2014, with health insuranceprovider fees imposed in 2015 and set to increase annually andtaxes on high-cost plans imposed beginning in 2018.
Valentine said the sweeping legislation contains severalpositive reforms, but he doesn’t believe the new laws willaccomplish Democrats’ stated goal of lowering the cost of healthcare in America.
“Insurance companies will have to cover things they don’t haveto cover now, and somewhere along the line they’ve got to pass thaton,” he said. “Somewhere along the line $8 billion in taxes has tobe passed on.”
Valentine reminded the crowd at the roundtable that althoughhealth care reform laws have a well mapped-out plan for the next 10years, that plan could be very different before it’s allimplemented.
“We’ll have two congressional elections and a presidentialelection between now and 2014, so this could all change by then,”he said.