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.