United Bank & Trust Blog

Pam Jones-Sexton

In late March Congress passed the Health Care & Education Reconciliation Act of 2010 that amended the Patient Protection & Affordable Care Act. The idea is to change how health care is delivered and provide a path for 32 million more Americans to have access to health care. Most sources report that the reform, while necessary, is imperfect, but it provides a space to build on.

The Good

1. Long overdue – last significant change was in 1965.
2. Prohibits lifetime caps on coverage for individuals
3. Provides continued coverage for dependent children up to 26 years of age
4. Prohibits denying insurance for  “pre-existing conditions”
5. Prohibits denying care
6. Expected to lead to better coverage on preventative exams
7. Closes Medicare coverage gap with better coverage for prescription drugs
8. Potential tax credits to make insurance affordable
9. Potential savings from less fraud waste and abuse.
10. Potential savings from primary care in the doctor’s office rather than the ER
11. Low income consumers will get credits or vouchers to pay for part of the mandatory insurance.
12. Incentives to promote wellness

The Bad

1. Parliamentary maneuvers led to a 2,700 page document and ways to pass the package with a simple majority rather than a major majority
2. Confusing
3. Costs will be passed on to the consumer
4. Timelines range from 2010 to 2018 for implementation
5. Mandatory coverage is viewed by some as unconstitutional because it forces the purchase of insurance or face penalties.
6. Limit Flexible Spending Account contributions to $2,500
7. Consumer protection to debt collection by NFP hospital (I’m not sure if this is good or bad – may lead to other issues, such as the IRS will not have to review NFP hospitals and their community benefit activities – does this create more cost that will eventually find it’s way into our wallets?)
8. Experts show there are 24 – 27 parts to health care costs.  All components of the cost containment wheel aren’t addressed which will lead to a lop-sized solution.

The Ugly

1. $940 Billion price tag
2. Suggestion that this may lead employers to decrease or drop benefits
3. Items in law that have nothing to do with health care (i.e. pork bellies that are part of law in order to win a vote from a congressman)
4. Increased costs that are anticipated to be passed along to the consumer either directly or indirectly:
   • Increased Medicare tax
   • Adds Medicare tax to unearned income (e.g. investment income)
   • New taxes – e.g. Tanning salons will pay a 10% tax on 7-1-2010
   • New excise tax on high dollar “Cadillac” insurance plans
   • Taxes to insurance companies
   • Employers will pay more tax (exceptions include small business with less than 50 employers and builders)
   • New fees on medical device manufacturers (eyeglasses and hearing aids will be exempt)

To learn more about how these reforms will affect you, check out http://www.whitehouse.gov/Issues/health-Care

Sources:  Modern Physician, Plante & Moran, Harvard Business Review, Modern Healthcare, Crain’s Detroit Business