An Opinion

What Is in the Healthcare Law?

Friday, 09 April 2010 00:00

Now that the debate is really over, take a look with me at some of the details in the legislation. This will not be a biased piece. I will try to lay out a summary which you can understand.

First, New York State will receive more Medicaid funding and eventually extend coverage to some 161 thousand Long Islanders with no insurance. In addition, some 243 thousand young people will be able to have coverage through their parent’s insurance until age 26. And across the country some 32 million people without health insurance will be covered. This will be a positive for hospitals on Long Island, because fewer people will be treated in emergency rooms with no insurance.

As the debate about healthcare raged over the last 15 plus months, the changes were taking place weekly. Using a Power Point for my talks about healthcare and the uninsured, slides would constantly have to be updated. One of the most controversial elements in the legislation, pushed by President Obama and the House, was the “Public Option” or government run health insurance plan. The Senate eliminated that provision, and the recent action by the House of Representatives upheld the Senate position.

Now, let me review the basic provisions and my best estimate from all the material as to when they will become effective.

First, all individuals will be required to purchase health insurance by 2014 or pay a fine of up to 2.5 percent of their income. Firms with more than 50 employees will have to offer health insurance or face fines of $2,000 per full-time workers.

With regard to Medicare, the doughnut hole for prescription drugs would be filled by 2020, and in 2010, there will be a $250 rebate.

There is no doubt that the legislation helps the poor. The Medicaid program will be expanded so that a family of four in 2014, earning up to 133 percent of the federal poverty level ($29,327) will be eligible. Through 2014, the federal government will pay the states for all the newly eligible Medicaid recipients. After that, the states will pay alone.

Another feature of the new law will be the Health Insurance Exchanges. The uninsured and self-employed will be able to purchase their insurance with subsidies if they are between 133 percent and 400 percent (up to $88,000) of the poverty level. In 2014, exchanges would be set up for small businesses, as well. All insurance sold on the exchanges could be set up for small businesses, as well. And the insurance, sold on the exchanges, would have to meet minimum requirements. Illegal immigrants would not be able to purchase insurance on the exchanges but would still get care in a hospital emergency room, as they do today.

Beyond the fines which will be imposed, the programs will be paid for by new taxes. For individuals earning more than $200,000 or couples earning more than $250,000 the Medicare payroll tax would increase from 1.45 percent to 2.35 percent in 2013. There will also be a 10 percent tax on tanning services and new taxes on medical device manufacturers, insurance providers and brand name pharmaceuticals.

Finally, insurance companies will have to cover those with pre-existing health conditions and will not be able to arbitrarily drop those covered. If you change jobs, your insurance will be portable.

And remember this! There is no additional coverage under the new law until 2014, except for the children, up to 26 years of age, of people currently with healthcare insurance.

In conclusion, let me make one prediction. Over the next few years, there will be changes. And, that is why, in my opinion, so much of the bill does not take effect for several years. Stay tuned whether you were “for” or “against” the legislation.