MEDICARE REIMBURSEMENT RATES 2010 Update 08: The House passed legislation
(H.R.4851) to delay until 1 MAY the 21% cut in Medicare payments to
doctors now scheduled for 1 APR and forwarded the bill to the Senate. The intent
was to allow more time for Congress (which went on a two-week recess 26 Mar) to
work out a longer-term fix. But a Senate effort to approve the bill quickly by a
“unanimous consent” procedure hit a snag when Sen. Tom Coburn (R-OK) refused to
consent. Under Senate rules, any senator can object to bringing a bill to the
floor for action. Coburn objected on the grounds that the cost of the bill is
not offset by other spending reductions. Senate leaders could not work out an
agreement on 26 MAR, the last day before their scheduled two week Easter recess.
Thus, the 21% cut will take effect prior to their return on 12 APR. Ironically,
the Senate already passed a six month fix two weeks ago (H.R.4213), but the
House didn’t agree with the funding for the bill and in turn passed only a
one-month fix.
Failure to reach an agreement on an extension on the eve of the
congressional two-week Easter recess could prove detrimental to
Medicare beneficiaries even if Congress applies a retroactive solution when they
return in mid-April. Doctors have become weary of the increasing number of
short-term patches applied by Congress rather than a long-term solution. Some
are already limiting the number of patients who use these programs.
Congress has to find a way to end these monthly crises under which
millions of Medicare beneficiaries are held hostage to the
prospect of devastating payment cuts that will cause their doctors to stop
seeing them. [Source: MOAA Leg Up 26 Mar 2010 ++]
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HEALTH CARE REFORM Update 25: National health care reform has a key new
benefit for families that will not apply to military families enrolled in the
Tricare health insurance program. A key expansion of benefits in the Patient
Protection and Affordable Care Act, H.. 3590, is a requirement for health
insurers to cover unmarried children up to the age of 26 who are carried on the
policy of a parent. This change, like the rest of the bill, does not apply to
Tricare, according to Defense Department and congressional sources. But
congressional aides, speaking on the condition of anonymity, said several
lawmakers have begun investigating how to alter Tricare so that it also covers
older children who do not have their own coverage. A change is being considered
for inclusion in the 2011 defense authorization bill, which the House and Senate
armed services committees will begin writing later this year. Currently, Tricare
covers unmarried children up to age 23 if they are attending college or up to 21
if they are not. Tricare spokesman Austin Comacho said he could not give a
definitive statement about whether Tricare’s age limit for children would be
changed. “The only thing we can be sure of is that there will be no adverse
impact to our beneficiaries,” he said.
Robert Gates, Secretary of Defense, released a statement on 21 MAR2010
which stated: “Our troops and their families can be re-assured that the health
care reform legislation being passed by the Congress will not negatively impact
the Tricare medical insurance program. In the interim, Rep. Martin Heinrich
(D-NM) introduced a bill on 25 MAR that would extend TRICARE health coverage to
dependent children from age 23 to age 26. The Comptroller estimates this
additional cost would be in excess of $600 million per year. The TRICARE
Dependent Coverage Extension Act (H.R.4923), would require Defense to provide a
key benefit created by the Patient Protection and Affordable Care Act President
Obama signed into law which allows parents to keep dependent children on family
health insurance plans up to age 26. TRICARE is governed by Title 10 of the U.S.
Code and is not affected by the new health care law. H.R.4923 would amend Title
10 to reflect the new requirement, which would take effect 1 OCT 2010. [Source:
NavyTimes Rick Maze & GovExec.com Today articles 22 & 25 Mar 2010 ++]
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HEALTH CARE REFORM Update 26: Here are the effective dates of major
provisions of the health care overhaul legislation approved 21 MAR:
90 days after enactment:
• Provide immediate access to high-risk pools for people with no insurance for
at least six months because of pre-existing conditions.
• Impose a 10% excise tax on indoor tanning for services provided on or after
1 JUL 2010
Six months after enactment:
• Bar insurers from denying people coverage when they get sick.
• Bar insurers from denying coverage to children with pre-existing conditions.
• Bar insurers from imposing lifetime caps on coverage.
• Require insurers to allow people to stay on their parents’ policies until
they turn 26.
Nine months after enactment – 50% of the donut hole will be covered. Eventually,
the health care reform bill will close the donut hole entirely
Within A Year:
• Provide a $250 rebate this year to Medicare prescription drug beneficiaries
whose initial benefits run out when they enter the donut hole.
• Require new insurance policies to cover certain preventive-care measures
with no out-of-pocket cost to the consumer.
• Require Insurance companies to stop imposing lifetime coverage limits on
your insurance.
• Sharply limit annual caps on your insurance.
• Require Insurers with unusually high administrative costs to offer rebates
to their customers, and every insurance company has to reveal how much it spends
on overhead.
2011:
• Require individual and small group market plans to spend 80% of premium
dollars on medical services. Large group plans would have to spend at least 85%.
• Taxes begin being levied on drug manufacturers.
• Physicians’ Medicare fees will be cut more than 25% unless the sustainable
growth rate is permanently repealed by Congress; –
• Initiate Medicare bonus of 10%over five years for primary care and general
surgery (family medicine, internal medicine, geriatrics and pediatrics)
2012 – Businesses must file Form 1099s for all business-to- business
transactions of $600 or more.
2013 :
• Increase the Medicare payroll tax and expand it to dividend, interest and
other unearned income for singles earning more than $200,000 and joint filers
making more than $250,000.
• Require public reporting of physician performance to begin.
• Begin testing Medicare pilot programs care payments based on “quality over
quantity” of services rendered.
• Make fewer medical expenses tax deductible.
• Raise wage taxes from 1.45% to 2.35%; – New tax of 3.8 percent levied on
unearned income streams like interest and dividends; – New tax of 2.9 percent
on medical device sales.
2014:
• Provide subsidies for families earning up to 400% of poverty level,
currently about $88,000 a year, to purchase health insurance.
• Require most employers to provide coverage or face penalties.
• Require most people to obtain coverage or face penalties for noncompliance.
• Create state insurance exchanges for individuals and small businesses to
purchase coverage.
• Prohibit Insurance companies from denying coverage for pre-existing
conditions.
• Expand Medicaid to all Americans under age 65 earning up to 133% of the
federal poverty level.
• Increase Subsidies for some small business providing coverage to employees.
2015 – Initiate independent Payment Advisory to make recommendations for cutting
Medicare costs.
2016:
• Penalties for individuals refusing to purchase insurance rise to 2.5% of
taxable income or $695, whichever is greater.
• Multi-state compacts allowed to sell policies across state lines
2018 – Impose a 40% excise tax on high-end insurance policies.
2019 – Expand health insurance coverage to 32 million people.
[Source: Speaker of the House, Congressional Budget Office, Kaiser Family
Foundation via McClatchy Newspapers article 21 Mar 2010 ++]
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HEALTH CARE REFORM Update 27: The Obama Administration’s health-care reform,
which passed 219-212 in the House of Representatives 21 MAR and has been signed
into law by the President, will lead to significant changes in the way millions
of people find and buy health insurance. Advocates for consumers and patients
hailed the overhaul’s passage. “While the new reforms won’t solve all the
problems in our nation’s broken health-care system, they will go a long way
toward achieving the goal of affordable, reliable health care for all
Americans,” Jim Guest, chief executive of Consumers Union, said in a statement
after the vote. Immediately following President Barack Obama’s signing of the
bill 12 states filed a lawsuit challenging several provisions of the new law.
The suit alleges, among other things, that unfunded state Medicaid mandates and
forcing individuals to purchase health insurance are unconstitutional. The
lawsuit was filed by the participating states’ attorneys general and names the
U.S. Departments of Health and Human Services, Treasury and Labor. States
joining in the lawsuit include Alabama, South Carolina, Florida, Louisiana,
Nebraska, Texas, Michigan, Utah, Pennsylvania, South Dakota, Washington and
Colorado. In the interim here’s an outline of what you can expect depending on
your employment, income, health and lifestyle factors. The exact timing of
several provisions has yet to be determined:
• If you have employer-sponsored coverage: Any lifetime caps on how much your
health plan will cover, often set between $1 million and $5 million, will be
eliminated in both group and individual health plans starting later this year.
Employers will have to disclose the cost of workers’ health coverage on their
W-2 tax forms starting in 2011.
• If you have a small business: Small firms starting this year may be eligible
for new tax credits that would cover up to 35% of health-insurance premiums for
businesses that have fewer than 25 employees. Workers at small businesses
eventually will be able to buy policies on new health-insurance exchanges, where
health benefits will have to meet a new minimum standard.
• If you’re uninsured: Over the next 10 years, the bill will extend coverage
to an estimated 32 million people who would otherwise lack coverage. It does
this by expanding the government safety net and providing subsidies for low- and
moderate-income people without employer health benefits to buy private plans on
health-insurance exchanges, which are due to start in 2014. For the first time,
all citizens and legal residents will have to buy health insurance — with
financial aid from the government if they can’t afford it, on a sliding scale up
to 400% of the poverty line — or face a penalty starting in 2014, with some
exceptions for low-income people. The amounts are set to rise annually,
beginning with a fine of $95 or 1% of income, whichever is greater, and growing
to as much as $695 or 2.5% of taxable income by 2016.
• If you’re low-income: The law significantly expands Medicaid, the
federal-state health program for the poor, making it available to an estimated
16 million more people with incomes up to 133% of the federal poverty level.
Adults without dependent children will qualify for the first time. In addition,
community health centers, on which many of the working poor rely, will receive
enhanced funding.
• If you’re a young adult: Starting six months after enactment, kids can stay
on their parents’ policies until age 26. Individuals younger than 30 who don’t
have insurance also will have the option of buying catastrophic coverage on the
exchanges, according to the Kaiser Family Foundation.
Tax-related changes
• If you have a flexible-spending account for health expenses: Nothing changes
for three years. A $2,500 cap on contributions to these accounts, which allow
users to sock away money pretax to spend on qualified health expenses, appears
likely to go into effect in 2013. The cap will receive annual cost-of-living
adjustments.
• If you have a health savings account (HSA) or Archer medical savings
account: In 2011, the penalty for withdrawing funds for nonqualified medical
expenses increases to 20% from 10% for HSAs and from 15% for Archer MSAs.
• If your earned or investment income exceeds $200,000: In about two years,
the Medicare payroll tax will rise nearly 1 percentage point to 2.35% on wages
of individuals with earnings greater than $200,000 and married couples earning
more than $250,000. A new 3.8% Medicare tax will be levied on investment income
including interest, dividends and capital gains that exceed those thresholds.
• If you itemize deductions for income tax: Starting in 2013, medical expenses
have to reach 10% of your adjusted gross income to qualify for a tax deduction,
as opposed to today’s 7.5% standard. But seniors age 65 and older would be able
to claim an itemized deduction at 7.5% of income through 2016.
• If you have high-cost health insurance: A so-called Cadillac tax of 40% on
plan administrators offering the richest job-based health benefits will take
effect in the next few years and apply to the amount of annual premiums
exceeding $10,200 for individuals or $27,500 for families. The thresholds are
higher for retirees and workers in certain high-risk jobs.
Medicare, preventive care and tanning
• If you have Medicare: This year, beneficiaries with the Part D drug benefit
who fall into the coverage gap that for 2010 is between $2,700 and $6,154 of
spending will receive a $250 rebate. In 2011, those who hit the gap will receive
a 50% discount on their brand-name drugs. The so-called doughnut hole gradually
will close by 2020.
• If you take advantage of preventive care: Full coverage for some services is
slated to take effect in six months. At that time, all new insurance policies
will have to make certain preventive-care visits and screenings exempt from
health plans’ deductibles and other cost-sharing.
• If you go to a tanning salon: A 10% excise tax on indoor tanning may kick as
early as this summer for services provided on or after 1 JUL 2010.
[Source: Wall Street Journal MarketWatch Kristen Gerencher article 22 Mar 2010
++]
