Monday, July 05, 2010

Volume 70 - Health Care Bill - The Act

I find it hard to believe that may last entry was four months ago. Time is going by in 'warp speed' as the economy goes in the opposite direction. In today's business world one has to not only understand 'Cashflow' but manage it as a pro; 'receivables and payables' have taken on priority of the business. An upcoming blog will certainly have to examine the 'new priorities' that exist today in Small Business; but this addition (The Health Care Bill - The Act) has been on the 'back burner' long enough.

Not only will you have to manage 'cashflow' as never before, but now you'll also have to protect your budgets even more so due to this intolerable Health Care Bill with passage this past March. There is not doubt that this was Historic Health Care Legislation; historic for all the wrong reasons! The uncertainty with some implications for employers, health insurers, hospitals, and individuals as prepared by our (i.2's) International Law Firm, Calfee, Halter & Griswold LLP:

"On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (Act), launching a new era of health care coverage and concerns for Americans. In a somewhat unusual twist, the much-talked-about second bill - the Health Care and Education Reconciliation Act of 2010 (Reconciliation Act) - still must be approved by the Senate before the health care law takes its final shape." (As we know, this was passed by the Senate and is law as of this writing; nevertheless, the concerns remain more than ever)

"As it stands now, some of the key provisions of the Act are as follows:

Health Insurance Exchanges: The Act calls for the creation of health insurance exchanges through which the uninsured and self-employed may purchase insurance provided by private insurers. Subsidies will be available for uninsured individuals and families who meet certain income guidelines. The Act sets forth broad parameters and creates a panel that will determine the coverage requirements and other details of the exchange operations within these parameters.

Individual Mandate: Individuals who do not purchase health insurance will pay a tax penalty.

Medicaid Expansion: The Act will increase the income eligibility for Medicaid and require states to expand Medicaid coverage to childless adults.

Employer Coverage Requirements: The Act does not require employers to provide health insurance to their employees. However, employers with more than 50 employees that do not offer health insurance to their employees (or employers that provide coverage that is insufficiently affordable) may be subject to tax penalties. The Act also imposes new requirements regarding employee waiting periods for benefit eligibility.

Insurance Coverage Requirements: The Act bans certain common insurance practices, including lifetime benefit limits and preexisting condition exclusions. It also requires insurance companies to offer coverage to adult children up to age 26. Benefit plans will also need to be amended to meet the law's new requirements.

Small Business Tax Credits: The Act creates several new tax credits for small businesses that offer health insurance coverage to their employees or purchase insurance through the separate insurance exchanges which will be created for small businesses.

Tax Increases: In addition to the tax penalties previously described, the Act contains numerous tax increases or new taxes. Insurers will be subject to an excise tax on so-called "Cadillac" insurance plans. there will be new excise taxes on medical device manufacturers, brand name pharmaceutical manufactures, health insurance providers, and other health-related industries, as well as on indoor tanning services. Individual taxpayers earning over $200,000 (or $250,000 for joint filers) will see a Medicare payroll tax increase and a new Medicare tax on unearned income (i.e. investment income).

Nonprofit Hospital Requirements: The Act imposes certain new requirements that nonprofit hospitals must satisfy to maintain tax-exempt status. Nonprofit hospitals must now conduct recurring community health needs assessments and adopt financial assistance policies meeting certain guidelines. Nonprofit hospitals will be subject to new limits on the charges they may assess against patients who qualify for such financial assistance and cannot undertake certain billing and collection activities.

Medicare Funding: The Act reduces federal payments to Medicare Advantage plans. It also limits future increases in medicare payments to hospitals, nursing homes, home health agencies and other providers."

As one can easily see, this Act does nothing for a small business that already has medical health insurance for its employees. It does nothing for reduction of prescription costs. It does nothing to stop the yearly increases to the medical coverage. What it does accomplish is to give millions of uninsured people the opportunity to gain Health Insurance for which others will have to pay; another example of 'Redistribution of Wealth.'

The Government is not able to administer such a program effectively, as history can more than prove. On the other hand, nothing is being done to regulate costs; either administratively or control of Pharmaceutical companies or conglomerate Health Care Companies. This Act simply is another example of Government control 'dolling' out benefits at the expense of those already dealing with escalating health insurance costs!

On this July 4th weekend, we should also remember within the initial Declaration of Independence writings of Thomas Jefferson the use of the word "citizens" over the scratched out word of "subjects". We are a people who are not "subjects" of a government, but "citizens"of a Republic that (at one time) recognized hard work, risk, and reward, not one that was "subject" to the control and whims of a centralized government.

As the Health Care Act develops, so will the updated translations from our Law firm.

Happy Birthday America