Healthcare Passes The House – Key Points

The House passed the massive healthcare bill, and although there is still a long way to go before anything actually starts, you should be aware of the key points.

Congress hasn’t had time to read the bill (sound familiar?), so Americans are justified in their worry.

It’s a mix of good and bad – the worst part is how we’ll actually pay for it.

There’s little to help doctors that are facing financial hardship due to the cost of running a practice. No mention of tort reform to stop the practice of defensive medicine.

The obligation for everyone to carry health insurance is sure to place an onerous burden on a lot of Americans – and they’ll face a penalty for not doing so.

It also will hit small business especially hard… translating into more unemployed, adding to the uninsured problem.

This is why we have to take on the main challenges ourselves.

(From Reuters)  Here are the main provisions of the House bill:

INSURANCE MARKET CHANGES

* Creates an insurance market exchange where individuals and small businesses would purchase coverage. Sets minimum benefit packages that may be offered through the exchange.

* Creates a new government health insurance plan that would be sold through the exchange.

* Provides for the creation of nonprofit healthcare cooperatives that would sell coverage through the exchange.

* Bars insurers from excluding people for pre-existing conditions and from charging more based on medical history.

* Creates a temporary national high-risk pool program to provide medical coverage to the uninsured, including those with pre-existing conditions who have been denied coverage. The program would operate until the exchange becomes available.

* Permits young people to remain on their parents’ health insurance policy up to the age of 27.

* Provides for consumer rebates if premiums far exceed the cost of covering their medical expenses.

* Sets up a state/federal process under which insurers would have to justify premium increases.

* Eliminates lifetime limits on coverage.

* Provides for states to enter compacts to allow for the sale of insurance across state lines.

COVERAGE MANDATES AND PENALTIES

* Individuals are required to obtain healthcare coverage. Those who do not would face a 2.5 percent tax penalty.

* Most employers are required to provide coverage to their workers and pay for at least 72.5 percent of the premium for individual full-time workers, 65 percent for family coverage.

* Small firms with up to $500,000 in annual payroll are exempt.

* Firms with annual payrolls between $500,000 and $750,000 that do not provide coverage would pay fees on a sliding scale of 2 percent, 4 percent and 6 percent of wages; firms with payrolls of $750,000 and above would pay 8 percent in fees.

* Tax credits available to help small firms afford coverage.

FINANCING

* Imposes a surtax of 5.4 percent on individuals earning more than $500,000 a year and couples making more than $1 million.

* Imposes a 2.5 percent excise tax on medical devices.

* Raises $6.1 billion over 10 years by repealing rules liberalizing the way multinational companies allocate interest expenses.

* Limits tax breaks for foreign multinational companies incorporated in tax havens that may be using offshore structures to evade U.S. taxes.

* Closes a loophole that lets paper companies claim a valuable tax credit for making biofuel that is already a byproduct of paper production. This provision raises $24 billion over 10 years.

* Would write into law Internal Revenue Service rules denying tax breaks on business transactions that lack an economic purpose and are undertaken only to create a tax write-off. Fines of 20 percent to 40 percent would be imposed for violating the rules.

MEDICARE AND MEDICAID

* Expands Medicaid eligibility so that anyone with an income up to 150 percent of the poverty level would qualify for the government healthcare program for the poor.

* Seeks to reduce hospital re-admissions and to base payments on quality of care rather than on the number of services and treatments.

* Reduces payments to insurers providing Medicare services through the Medicare Advantage program to bring them more in line with the costs of the traditional Medicare program for the elderly.

* Gradually reduces the gap in Medicare prescription drug coverage. The so-called “doughnut hole” begins to close starting in 2010, with the coverage gap eliminated by 2019.

* Would allow Medicare to negotiate drug prices under its prescription drug program.

The Trillion Dollar cost of this 2,000+ page bill is frightening and logic tells me that we will be paying a lot more for healthcare.

It’s time to explore your alternatives and be positioned to ride through this change in a way that will leave you better off financially. It’s called the Health Savings Account Plan.

I’ll cover it in great detail over the next few weeks.

photo credit: republicanconference