How Health Care Reform Affects You

If you didn’t read the entire 12-page synopsis of the new Health Care Reform legislation which I posted a couple of days ago (because you found it just too exciting!), here is a year-by-year breakdown of what you can expect (the big stuff doesn’t happen until 2014).   Can you spot the fatal flaws?

2010

• Subsidies begin for small businesses to provide coverage to employees
• Insurance companies barred from denying coverage to children with pre-existing conditions
• Children permitted to stay on their parents’ insurance policies until their 26th birthday

2011

• Set up long term care program under which people pay premiums into system for at least 5 years and become eligible for support payments if they need assistance in daily living
• Drug makers face annual fees of $2.5 billion

2013

• New Medicare tax on individuals earning more than $200,000 a year and couples filing jointly earning more than $250,000 a year
• Tax on wages rises to 2.35% up from 1.45%
• New 3.8% tax on unearned income such as dividends and interest
• Excise tax of 2.9% imposed on sale of medical devices
• Medicare pilot program begins to test bundled payments for care, in a bid to pay for quality rather than quantity of services

2014

• Create exchanges where people without employer coverage, as well as small businesses, can shop for health coverage.  Insurance companies barred from denying coverage to anyone with pre-existing illness.
• Requirement begins for most people to have health insurance.  Subsidies begin for lower- and middle-income people.  People at 133% of the federal poverty level pay maximum of 3% of income for coverage.  People at 400% of the poverty level pay up to 9.5% of income.  (Poverty level currently is about $22,000 for a family of four.)
• Medicaid (in CA, Medi-Cal), expands to all Americans with income up to 133% of federal poverty level.
• Subsidies for small businesses to provide coverage increase.  Businesses with 10 or fewer employees and average annual wages of less than $25,000 receive tax credit of up to 50% of employer’s contribution.  Tax credits phase out for larger businesses.
• Employers with more than 50 employees that don’t provide affordable coverage must pay a fine if employees receive tax credits to buy insurance.  Fine is up to $3,000 per employee, excluding first 30 employees.
• Insurance industry must pay annual fee of $8 billion (rises in subsequent years).
• Independent Medicare board must begin to submit recommendations to curb Medicare spending, if costs are rising faster than inflation.

2016

• Penalty for those who don’t carry coverage rises to 2.5% of taxable income, or $695 whichever is greater.

2017

• Businesses with more than 100 employees can buy coverage on insurance exchange, if states permit it.

2018

• Excise tax of 40% imposed on health plans valued at more than $10,200 for individual coverage and $27,500 for family coverage.