The passage of President Obama’s Democrat health care plan, which as you know I strongly opposed, initiates a number of changes to health care in the United States beginning this year. The following information documents what those changes will be and when they occur through the bill’s full implementation in 2018.

2010

Tax Changes:

• Institutes a limited tax credit for small businesses of up to 35% of the employer’s insurance premiums. However, this tax credit is only available to small businesses that employ fewer than 10 people with wages of under $25,000 per employee. This credit is phased-out completely for small businesses that employee more than 25 people and have wages above $50,000.
• A 10% tax increase on indoor UV tanning services.

Changes Affecting Individuals and Health Care Providers:

• The first round of Medicare cuts begin as Seniors and hospitals will both see cuts for long-term care and inpatient and rehabilitation facilities.
• Hospitals in the “Frontier States” of North Dakota, Montana, Wyoming, South Dakota and Utah will receive higher Medicare payments not available to other states.
• $400 million will be spent over the next two years on higher Medicare payments for hospitals in low cost areas.

Changes Affecting Insurance:

• High-risk insurance pools will be created for people with pre-existing conditions but funding will be limited and waiting lists for individuals wishing to participate are possible.
• Limited protections will be put in place for children with pre-existing conditions preventing them from being excluded by insurance companies.
• Insurance companies will be prohibited from including lifetime benefit limits on policies and also prohibiting the use of restrictive annual benefits.
• Insurers will be stopped from rescinding insurance policies.
• Cost-sharing provisions for preventative services will be eliminated.
• Dependents will be allowed to remain on insurance policies until the age of 26.
• Insurers are required to provide annual reports on the share of premium dollars that are spent on medical care and must provide consumer rebates for any medical loss ratios that are deemed to be “excessive.”
• All Employee Retirement Income Security Act (ERISA) covered plans must establish a new appeals process.

2011

Tax Changes:

• Owners of Health Savings Accounts (HSAs) and Flexible Spending Arrangements (FSAs) will be prohibited from using these funds for over-the-counter medicine. This change will raise $5 billion.
• Name-brand drugs will be taxed, raising $27 billion.
• Employers will be required to tell the federal government the value of the benefit each employee is receiving in the form of health insurance coverage and report its value on the employee’s W-2 form.

Changes Affecting Individuals and Health Care Providers:

• Additional Medicare cuts will be made, including:
• To the Medicare Advantage program.
• To Medicare reimbursements for seniors who use diagnostic imaging such as MRIs and CT scans among others.
• For ambulance services, ambulatory surgery centers (ASCs), diagnostic labs, and durable medical equipment.
• To hospitals, nursing homes and inpatient rehab facilities.
• Seniors who fall into the Medicare Part D prescription drug “donut hole” will receive a $250 check from the federal government.
• Drug discounts begin for those seniors who fall into the Medicare Part D “donut hole.”
• Individual seniors who make $85,000 annually, or joint filers making $170,000 annually, will begin paying higher Medicare Part D premiums that aren’t indexed for inflation in Medicare Parts B/D.
• Seniors in Medicare are prohibited from buying power wheelchairs unless they have first rented them for 13 months.
• Medicare payments to new physician-owned hospitals will be prohibited.
• Physicians in the “Frontier States” in North Dakota, Montana, Wyoming, South Dakota and Utah will receive higher Medicare payments not available in other states.

Changes Affecting Insurance:

• Employers can auto-enroll for the Community Living Assistance Services and Supports Act (CLASS Act) which establishes a national long-term care insurance program.

2012

Changes Affecting Individuals and Health Care Providers:

• $15.2 billion will be raised by raising the threshold for deducting medical expenses from 7.5% to 10%.
• Additional Medicare cuts for dialysis treatment, Hospice, and hospitals with high readmission rates.
• The new hospital pay-for-quality program begins.

2013

Tax Changes:

• The Medicare Payroll Tax increases by 0.9% to 3.8% for those with earned income above $200,000 and $250,000 for joint filers raising a total of $86.8 billion in new taxes.
• A new tax on investment income of 3.8% for those with income above $200,000 and $250,000 for joint filers will raise $123.4 billion in new taxes.
• Non-retail medical devices will be taxed at 2.3%, raising $20 billion in new taxes.
• Contributions to flexible spending accounts (FSAs) will be limited to $2,500, raising $13 billion.
• Employers will no longer be able to deduct their expenses for Medicare drug subsidies, raising $4.5 billion.
• Raises the threshold for deducting medical expenses from 7.5% to 10% adding $15.2 billion to the Federal Treasury.

2014

Tax Changes:

• New individual mandates begin with those not purchasing insurance facing tax penalties up to $695 or 2.5% of their income, whichever is greater, when phased in fully.
• New employer mandates begin for those with more than 50 employees who don’t offer insurance or those who do offer insurance but the employees also receive some form of federal insurance subsidy. The employer would be fined up to $2,000 per employee for each employee over 30 employees.
• New insurance subsidies will be available to individuals or families above the Medicaid eligibility cutoff, but below 400% of poverty (currently $88,200 for a family of four) who aren’t offered, or aren’t eligible, for other insurance coverage. A tax credit will be made available to these people to purchase insurance through new government insurance exchanges.
• Institutes an annual tax on health insurance providers that will raise $60 billion in new taxes.

Changes Affecting Individuals and Health Care Providers:

• An Independent Payment Advisory Board will begin offering proposals to further cut Medicare that will result in cuts of $15.5 billion from 2015-2019 and hundreds of billions in future years.

Changes Affecting Insurance:

• States are required to establish health care exchanges no later than 2014 for the sale of qualified health benefits plans to individuals and small employers.
• States are required to institute temporary reinsurance for individuals and small groups before transitioning to risk adjustment.
• The U.S. Office of Personnel Management (OPM) must offer at least two plans in every state that meets the requirements of the exchange and has a separate risk pool from the Federal Employees Health Benefits Program (FEHBM).
• Insurance plans must now include federally mandated essential benefits and coverage levels classified into four categories: Bronze, Silver, Gold, and Platinum.
• Anyone wanting an insurance policy must receive one and all insurance policies must be renewed and insurers can’t exclude anyone who has any pre-existing condition from receiving an insurance policy.
• A community rating system is created that would not allow insurers in the individual or small group markets to vary premiums except in the following instances:
• Plans for individuals or family coverage.
• Geography.
• Allowing a 3 to 1 ratio for age
• Allowing a 1.5 to 1 ratio for smoking.

2015

Changes Affecting Individuals and Health Care Providers:

• Begins a permanent productivity cut to the payment rate of home health agencies.

2016

Changes Affecting Individuals and Health Care Providers:

• With approval from the U.S. Secretary of Health and Human Services, states may begin insurance compacts if:
• The coverage is at a minimum equal to the essential benefits package.
• There are limitations on cost-sharing.
• It covers the same number of people.
• It doesn’t increase the federal deficit.

2017

Changes Affecting Individuals and Health Care Providers:

• States may begin to allow large group insurers to sell in their state exchanges.
• States may apply to the U.S. Secretary of Health and Human Services for a limited waiver from certain federal requirements.

2018

Tax Changes:

• Raises $32 billion in taxes by placing a 40% excise tax on so-called “Cadillac” or High-Cost insurance plans.

Originally published in Investor’s Business Daily

It’s April 15th, that dreaded day when it comes time to pay the tax man.

As nagging as the pinch may feel this year, the sad reality is that it’s bound to grow far worse in the future – that is, of course, unless Washington moves to repair the deteriorating fiscal health of our country by reining in its out-of-control spending habits.

According to the nonpartisan Congressional Budget Office, debt held by the public under the Obama administration would grow from $5.8 trillion at the end of 2008 to a stratospheric $20.3 trillion in 2020, or from 40% of the economy to 90%, respectively.

Also, annual interest on the debt would more than quadruple over the next 10 years, rising from $187 billion last year to $916 billion in 2020. By 2018, interest will eat up $2 billion per day.

With our debt ballooning to unsustainable levels, it’s time for Washington to stop pretending there won’t be severe consequences for our expansion of government spending programs.

Such a weighty debt load over time makes huge, growth-killing tax increases inevitable. The majority party has already made clear that it will raise taxes on income, capital gains and dividends.

Democrats, including the president himself, refer to a portion of this as the expiration of the “Bush tax cuts.”

Yet for years these have been the people’s tax cuts, and erasing them is a tax increase by any definition. In other words, by year’s end, Americans will face the “Obama tax increase.”

As painful as next year’s tax hike will be, it will provide only a small glimpse into the tax hikes Americans may face in the future.

But higher taxes aren’t the only way our exploding debt will erode America’s superpower status. Swelling red ink forces us into a state of dependency on countries like China whom we rely on to buy our debt.

It drives up the long-term risk of inflation and a weak dollar. It also means precious dollars for defense will be siphoned away for debt repayment.

That’s why Federal Reserve Chairman Ben Bernanke and former CBO Director Steve Elmendorf both sent stern messages to our lawmakers last week that action must be taken to head off dire economic harm.

It would be nice for Congress to have an open and honest debate about how we can get our budgets under control.

The most obvious venue for that discussion would be the annual congressional budget process that sets the parameters for federal spending.

But after 16 months of record spending, the House majority is in no mood to remind voters about the damage we are doing to federal coffers. Speaker Nancy Pelosi is even threatening to take the unprecedented step of foregoing the production of a budget altogether.

So as Americans are dotting their i’s and crossing their t’s on their tax returns this month, Democrats in Washington say they are immune from such accountability.

In the rare instances when the administration and majority Democrats talk about spending restraint, they rarely follow through. Over two months ago, Republican Leader John Boehner and I communicated to President Obama that if he would send up the spending reductions he proposed under an expedited procedure allowed under the law, we would use our authority to force a debate and vote on those provisions. We have yet to hear back from the president.

Under one-party rule, Washington has dangerously lost its sense of equilibrium. This cavalier approach to debt is moving us toward an economic abyss, and more of the same will only push us over the edge.

There are no free lunches. If our government is going to continue to spend and inject itself into the private economy the way Europe does, we are also going to have European-style taxation, higher structural unemployment and slower growth.

But we need not go down this road to stagnation – and that’s why the November election is so critical.

Republicans stand ready to restore balance to Washington by bringing responsible, adult leadership that focuses sharply on job creation and building economic opportunity. We will make the difficult spending decisions to put a lid on our deficits.

And rather than putting the squeeze on our nation’s job creators and entrepreneurs, we will embark on a pro-growth strategy that puts the American entrepreneurial spirit back on display.

Today, taxpayers are reviewing their own balance sheets to ensure the financial security of those they are responsible for.

The American people should demand no less from their elected officials in Washington.