Healthcare

The Senate Finance Committee Markup for Health care Reform is a Disappointment

 

Reading through the several hundred pages of the Chairman’s Markup leads one to conclude that the legislation should be called the Medicare and Medicaid Improvement and Expansion Act.  There are over 100 pages on these topics with little to control costs although I have to admit there are attempts to change the system, but again in the context of Medicare. 

Here is an example from the text of the bill: 

Chairman’s Mark 

The Chairman‘s Mark would authorize and appropriate $100 million over five years for the Secretary to establish an initiative to provide incentives to Medicare beneficiaries who successfully complete certain healthy lifestyle programs. Programs would target the following risk factors: high blood pressure, high cholesterol; tobacco use, overweight or obesity, diabetes and falls. The Secretary would establish a system to monitor beneficiary participation and validate the results, as well as set standards and health status targets for participating beneficiaries. Prior to establishing the initiative, the Secretary would review evidence concerning healthy lifestyle programs and providing incentives to individuals for participating in such programs. The initiative would be implemented on January 1, 2011.

Here is a clue, if one has not developed a healthy lifestyle before age 65, doing so after age sixty-five ain’t going to help much, especially in the context of controlling health care costs.

Scores of pages deal with changes to Medicare, including Part D, a 50% discount on drugs while 100% of the cost is still counted toward the donut hole and reaching the catastrophic 95% reimbursement coverage. Higher income beneficiaries would pay a greater percentage of the cost for Medicare part D as they do for Part B. 

Medicare Advantage plans are addressed, reimbursement systems, quality systems group purchasing incentives for hospitals all related to Medicare.

And here is some real teeth in malpractice reform, although he deserves some credit for even mentioning the topic which is ignored by the House. 

 Chairman’s Mark 

The Chairman‘s Mark would express the Sense of the Senate that health care reform presents an opportunity to address issues related to medical malpractice and medical liability insurance. The Mark would further express the Sense of the Senate that states should be encouraged to develop and test alternatives to the current civil litigation system as a way of improving patient safety, reducing medical errors, encouraging the efficient resolution of disputes, increasing the availability of prompt and fair resolution of disputes, and improving access to liability insurance, while preserving an individual‘s right to seek redress in court. The Mark would express the Sense of the Senate that Congress should consider establishing a state demonstration program to evaluate alternatives to the current civil litigation system. 

And for employers and employees who have health insurance the future is not bright.

35 Percent Excise Tax

It is unclear how many people will be affected by the 35 percent excise tax on high cost health coverage, especially because it includes medical, dental, prescription drug, vision coverage and even the employee contribution to an FSA.  Since someone other than the employee pays the tax, it then depends in part on the decision made by the employee with regard to the FSA contribution.

This may mean that employers will be less inclined to offer the FSA thereby driving up individual out of pocket costs.

The administrator in the case of self-insured plans pays the excise tax.  Given that the legal plan administrator is generally the employer, there is a strong incentive to cut back on these benefits taken together and thus again drive up individual costs.

It would be far better to limit the tax-free status to employees of so-called excess values than to incent the reduction in coverage.

No employer intentionally offers overly generous benefits especially to obtain the tax deductibility of such an expense.

The proposal would also require employers to disclose the value of the benefit provided by the employer for each employee’s health insurance coverage on the employee’s annual Form W-2. This is a tremendous administrative expense and implies an incredible amount of individual calculations.

Limited FSA

The FSA employee contribution is limited to $2,000, thus effectively limiting its ability to help young families pay for such things as children’s braces and other out of pocket costs.

Eliminate Exclusion for Employer Part D Subsidy.

The proposal would eliminate the exclusion from gross income for the subsidy for employers who maintain prescription drug plans for their Medicare Part D eligible retirees.

When Medicare Part D was passed, it was the specific intent of the legislation to discourage employers from dropping existing prescription drug coverage for their retired employees and thereby shift costs to the federal program. 

This change will not only encourage employers to drop the coverage or substantially cut it back, but it sends yet another message to the private sector that you cannot rely on a deal with the government.  The losers in all this will be millions of retired Americans.

Retiree health benefits of all kinds are quickly disappearing and in the process changing retirement patterns, increasing costs for individuals and the government.  It does not seem prudent to accelerate this process further by once again discouraging employers from providing such coverage.

So it goes with health care reform, we are still in effect expanding coverage, penalizing those who already provide coverage or have their own, raising out of pocket costs for insured Americans and expanding Medicare will little direct impact on the cost of health care in America.

 

 

 blogsurfer.us

Categories: Healthcare

3 replies »

  1. Medicare, a basic plan, all taxpayers are paying for it. The Federal Employees Health care plan, a gold plan, all taxpayers are paying for it. The Congress and President could save 800 billion by providing the basic plan to Congress and all Federal employees. Let’s cut out the GOLD plan, and let Congress be part of the solution! Those savings can be applied to insuring the uninsured. Also, outsourcing the Medicare Fraud to a private company (there are plenty private companies holding Fraud under .01% for their companies), much better than the govt is doing.

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  2. Actually, the tax on the RDS subsidy is an interesting idea.

    If one of our members has too much deducted (on a pre-tax basis) for his/her health care premiums, the refund is taxed when it is paid back to the employee.

    The prescription drug cost is a presumably a deduction from income for tax purposes. The subsidy is a technically a reduction in that deduction.

    Why shouldn’t it be taxable?

    Talk to your payroll folks and see if they handle it any differently for the employees where you work?

    That may be the only idea that I’m inclined to give Chairman Baucus any slack on.

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