As you read about ACA, pay particular attention to any provisions you feel may
impact on your situation, keeping in mind that the protections and requirements of the Patient Protection Act will be phased in over a period of years. It is also very possible that a future Congress may amend or even overturn certain provisions. Financing Health Care ReformIn 2009 the Congressional Budget Office (CBO) estimated that while the Patient Protection Act, as amended by the reconciliation Act, would cost approximately $940 billion over 10 years, that cost was expected be fully offset by new taxes and fees and, further, would result in a federal budget deficit reduction over those same 10 years. However, in March of 2012 the CBO revised its cost estimate upward to $1.1 trillion. In reality though, no one really knows with any accuracy what health care reform will cost.
While there are provisions for research and pilot programs in the Act, the legislation doesn’t include any proven strategies for tackling what many consider to be the biggest concern:
- health care costs that are rising at twice the rate of inflation. As a result, it’s impossible to predict at this point in time what impact health care reform will have on family budgets.
The hope is that the current legislation, together with possible future changes:
- will transform an industry that currently pays doctors and hospitals based on the volume of services provided to a system that rewards medical providers on the basis of health care outcomes.
To help finance the cost of health care reform, the Patient Protection Act, as amended by the Reconciliation Act, includes a number of taxes and fees that will take effect over a period of years:
- 40% excise tax on “high dollar” health insurance plans (takes effect in 2018);
- increase in Medicare payroll taxes paid by higher-income taxpayers beginning in 2013;
- for tax years beginning after December 31, 2012, an increase in the threshold for the itemized medical expense deduction from 7.5% to 10% of adjusted gross income;
- 10% tax on qualified indoor tanning services provided on or after July 1, 2010.
- annual nondeductible fees imposed on certain health-related industries, such as medical device manufacturers and importers, sales of brand-name pharmaceuticals and health insurance providers (effective dates ranging from 2011 to 2014);
- and beginning in 2010, limits on the deduction of compensation paid by health insurance providers to high-level executives.
Source © VSA, and the CBO
The information, general principles and conclusions presented in this post are subject to local, state and federal laws and regulations, court cases and any revisions of the same. While every care has been taken in the preparation of this post. This post should not be used as a substitute for the professional advice of an attorney, accountant or other qualified professional.
You may ask questions in the comments or contact me privately Tim Barton, ChFC