Fix Health Care Policy

Side Effects: The Beginning of the End for FSAs

“If you like your current health coverage, you can keep it.” It was a key promise of Obamacare.

But the new law gives government a say in everything from the benefits you carry to the treatment you receive. And that means very real changes to existing coverage. One of those many changes derive from new restrictions on flexible spending accounts (FSAs).

FSAs allow users to put aside pre-tax dollars for out-of-pocket health expenditures such as co-pays, deductibles, eyeglasses, and dental work. Typically, it cuts out-of-pocket costs by around 20 percent. FSAs are especially valuable for consumers with chronic illness and others who have large foreseeable medical costs (families: think orthodontics!). And because FSA funds cannot be rolled over year to year, the accounts encourage responsible budgeting and use of health services. (more…)

Tags: co-pays, deductibles, Flexible Spending Accounts, medical costs, out-of-pocket costs, Side Effects

How Obamacare Impacts Small Business

Small businesses will bear a significant burden under Obamacare. New regulations, mandates, taxes and numerous costs will impact how companies operate.

The National Federation of Independent Business counted all of these new requirements and came up with 25 ways the new health care law changes life for business owners over the next 10 years. Its video puts some perspective on what’s to come in the years ahead.

Earlier this week Heritage’s John Ligon revealed four ways Obamacare penalizes small businesses: higher health care costs, an ineffective small business tax credit, higher regulation compliance costs, and Medicare taxes on “flow-through” and investment income.

Medium-sized businesses between 50 and 199 employees don’t escape Obamacare’s taxes either. Ligon estimates that employees will ultimately pay the biggest price with lower wages, discontinued hiring or even loss of employment.

Tags: higher taxes, lower wages, National Federation of Independent Business, ObamaCare, small business tax credit

Tweet of the Week: 60% Believe Obamacare will Increase the Deficit

Rasmussen Reports had an interesting tweet about Obama’s Health Care Reform legislation:

“@RasmussenPoll: 60% Believe health care law will increase deficit, 58% favor repeal… http://tinyurl.com/RR1383″

Not only do 60% of Americans believe that health care reform will increase the deficit, but 58% also believe that the correct thing to do is repeal the law.

Digging deeper into the numbers, of the 58% who want to repeal the law, 47% strongly believe that we should repeal it, while only 29% strongly oppose repealing the law. Further still, only 19% think Obamacare will actually reduce the deficit.

(more…)

Tags: increase the deficit, ObamaCare, Rasmussen Reports, Tweet, Twitter

Obamacare: No Friend of Small Business

Obamacare was marketed to the American people as health care reform that would expand coverage to reduce the number of uninsured. One of the ways this would be accomplished, proponents said, was by making it easier for small business to offer insurance. Small businesses are the backbone of the American economy and have the greatest potential to create the jobs that Americans are currently desperate for.

Unfortunately, Obamacare will hinder the growth of these businesses. In a recent paper, Heritage’s John Ligon explains how the new health care laws will be largely ineffective at expanding coverage offered by small business, while simultaneously severely limiting job creation and growth. (more…)

Tags: higher premiums, limit job growth, Medicare payroll tax, ObamaCare, repeal and start over, small business credit, stricter compliance, uninsured

Side Effects: Floridians Will Lose Medicare Advantage

On the stump, Candidate Obama identified government entitlement spending on Medicare, Medicaid, and Social Security as the largest contributor to the federal deficit. If Congress doesn’t rein in the costs of these programs, he said,, these three programs will “consume all of the federal budget.”

Candidate Obama was right. (Still is: just check out The Heritage Foundation’s new 2010 Budget Chart Book.) Unfortunately, the President’s health care law will only exacerbate the entitlement crisis.

While Obamacare seeks some cost-savings (witness its ham-fisted treatment of popular Medicare Advantage plans), it does nothing to reform the overall structure of the Medicare entitlement. While the new law carves out $529 billion in Medicare “savings,” it calls for using those funds—and trillions more—to bankroll even more expansive health care entitlements. According to the National Center for Policy Analysis : “Instead of fixing the health care programs for seniors and those who cannot afford insurance, this law cuts Medicare and adds more people to the failing Medicaid system.” (more…)

Tags: 2010 Budget Chart Book, CMS, Florida, Medicaid, Medicare Advantage, Seniors, Side Effects, Social Security

Side Effects: Special Treatment for Congress

As we noted last week, Congress screwed up the language of their health care bill at their own expense. But, thanks to Obama administration lawyers, members and their immediate personal staff might be able to keep their existing health insurance coverage — for now.

The problem, as Heritage and others noted, is that the bill’s language says they have legislated themselves out of their own coverage under the Federal Employees Health Benefits Program (FEHBP) and into the newly created health insurance exchanges they’re imposing on the states. Without the timely intervention of the administration’s lawyers, the language might require them to do so right away. (more…)

Tags: congress, congressional research service, Federal Employees Health Benefits Program, FEHBP, health insurance coverage, Side Effects

Side Effects: It’s Official — Higher Health Care Costs

Yesterday, the actuaries at the Centers for Medicare and Medicaid Services (CMS), the agency that runs the giant entitlement programs, released their analysis of the new health care law. The AP reports that “White House officials have repeatedly complained that such analyses have been too pessimistic and lowball the law’s potential to achieve savings,” but the official CMS analysis reinforces several of Heritage’s predictions regarding Obamacare.

Some highlights of the CMS report:

– Mandates Without Impact. Writes CMS, “For many individuals, the penalty amounts for not having insurance coverage were not sufficiently large to have a sizable impact on the coverage decision” (p.7). Concerning employers, “the penalties would not be a substantial deterrent to dropping or forgoing coverage” (p.7). So these provisions will do little to achieve their purpose, i.e., to encourage individuals to carry coverage and employers to offer it. (more…)

Tags: bend cost curve up, CLASS program, higher health care costs, Individual Mandate, Medicare cuts, Seniors, Side Effects