January 3 2011

It's January for ObamaCare

Hadley Heath

Welcome 2011.  We've been waiting for you.  2010?  That was rough.  Our income tax rates are the same (hooray!) but ObamaCare is sneaking in a few changes as of January 1...

An ObamaCare repeal vote is on the horizon (from the newly installed 112th Congress).  But that won't stop a few new-year changes to our health care system.  To boil it down very simply (there's a lot of junk in those 2,000 pages), here are some highlights:

  1. Drug-makers will be taxed more.  The "pharma" industry will face a new $2.5 billion bill.  They'll split the burden based on the volume of their sales.  That's $2.5 billion they won't be using on drug research, but who needs new drugs?
  2. Medicare: Several preventative services will be covered now that weren't before (like mammograms), but other "extras" will be cut out (like eyeglasses).  Also, beneficiaries in the "doughnut hole" will be treated differently.  Instead of a $250 rebate for brand-name prescription drug costs, they'll get a 50 percent discount.  I'm sure some seniors will really like this change!  (and the AARP too.)
  3. Medical loss ratios will be set at 85 percent for large group plans (and 80 percent for small groups).  This ratio (sometimes just called the MLR) is the part of your premium dollars that are actually spent on medical costs (as opposed to administrative costs or profits to the insurer).  This provision has actually been a hardship for some employers who offer mini-med plans (like McDonald's).  But never fear, waiver frenzy is here.
  4. There are new rules about the use of flexible spending accounts on over-the-counter drugs.  You can still use money from your FSA on OTC drugs, but you have to have an RX.  Otherwise, you'll have to use regular old money that you paid taxes on.
  5. P.S. Medicare will now reimburse nurse midwives for their services at the same rate as doctors, for the small population of child-bearing Medicare beneficiaries.

Those are enough changes to make you dizzy, and I didn't even cover all of it. 

But remember, the big changes don't come until 2014.  The Times Square ball will drop 3 more times before those changes take effect (the individual mandate, the Medicaid expansion, and the health insurance exchanges), so there's a lot of time for us to prepare for (and maybe even rethink) those provisions.  Happy New Year everyone!  For better or for worse.

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