By Lindy J. Gwinn, Mountain Valley News staff
Andy Proctor at the Insurance Center in Delta has some understanding as to why legislators may not have read the 1300 pages of the bill concerning federal health care mandates. The bill mandates many changes to the current system and none of those mandates come with timely guidance concerning implementation of those mandates, says the multiple-line insurance agent.
Proctor told the people gathered for the Delta Chamber of Commerce Lunch and Learn last week that there will be changes and they will come over the next four years.
Most of all, he is convinced that insurance premiums will skyrocket to an all time high. In some cases those premiums may triple. He anticipates a significant increase in the cost and paperwork required of employers.
According to Proctor, the changes mandated in 2010 include mandated dependent coverage to age 26. “That means that a married 26 year old man, can continue to receive coverage under his parents’ policy whether he is single, married, in school or out. His wife and children would not be covered, but he would be,” said Proctor.
Lifetime maximum benefits will also become unlimited. Insurance companies at this time limit the lifetime maximum benefit a policyholder can collect. The new mandate is that there are no limits to benefits. “Guess what? This drives the cost of premiums up. There has to be a way to fund those payouts on benefits,” said Proctor.
Pre-existing conditions will no longer be excluded to people under the age of 19 and there will be no rescinding of policies except for cases of fraud and misrepresentation.
Other changes in 2010 are: emergency services are paid as in network benefits, specific preventative services will be provided with no cost share to the patient, eligible small businesses will qualify for premium tax credit, federal rate review of premiums is established and the creation of temporary high risk pool coverage.
In addition, Internet portals with consumer information for affordable health care plans will be created and a ten percent tax on indoor tanning will be assessed. Discrimination of high-risk employees will be prohibited. Minimum loss ratios for insurance companies are established and employer deductible subsidies are eliminated under Medicare D. Policy holders can chose any physician, including specialists that charge higher rates, as their primary care physician, and the federal government has set aside $200 million to form a committee that studies the impacts of market reform for large and self-insured group plans.
“In 2011 it only gets better,” said Proctor. “Tax distribution from health savings accounts increases from 10 percent to 20 percent and over the counter drugs are no longer reimbursable unless a prescription is obtained from a doctor. The feds create a new public long-term care program that people must opt out of rather than subscribe to.”
In 2012, employers are going to be required to include on W-2 forms the aggregate cost of employer sponsored health benefits. “Does anyone see a new tax coming here?” asked Proctor. There will be new fees on pharmaceutical manufacturers for brand name drugs.
Employers will be required to report annually to the Department of Health and Human Services regarding coverage benefits and provider reimbursement structures related to quality outcomes. Expanded reporting on 1099 forms will include payment of fixed and determinable income compensation. The feds will also be charging an additional $2 per individual to fund comparative research programs.
Looking forward to 2013, Medicare payroll taxes will increase and a new Medicare tax will be implemented on investment income. Medical expense deductions will be reduced at the federal tax level. Employers will be mandated to notify employees of the federal exchange programs. “It will cost less for an employer and employee to pay the fines imposed by the federal government than it will cost them to participate in the mandates and pay the premiums,” said Proctor. “Along with that, there will be a 2.3 percent excise tax on medical device manufacturers,” he said.
In 2014 there will be no pre-existing condition exclusions and there is a guaranteed issue of all health insurance programs. Employers with 200 or more employees will be mandated to automatic enrollments. There will be restrictions on community ratings for fully insured plans. State based insurance exchanges and employers will be required to provide free choice vouchers to certain employees.
The government will develop new standards concerning the definition of qualified health care coverage. In other words, according to some experts, define essential benefits. There will be new tax credits for low-income families to buy insurance. There will also be an increase in Medicaid guidelines.
Wayne Wolf asked if there would be any consideration for denial based on lifestyle habits.
“Will people who engage in unhealthy activities, such as smoking and illegal drug use be considered the same way as people who have healthy lifestyles for policies and premiums?” No definitive answer was forthcoming.
Proctor points out that there will be fines for employers with more than 50 employees based on employee incomes and there will be a mandate for all individuals to purchase health care insurance. Employers will be mandated to provide documentation to the individuals and the IRS of coverage.
“I see trouble ahead with doctors if we have a single source pay. I see the incentive for people that want to be doctors declining under this program and I see a huge influx of foreign doctors coming to this country,” said Proctor.
