New Medical Taxes for 2013- 1 Trillion Tax hike

 On January 1, regardless of the outcome of fiscal cliff negotiations, Americans will be hit with a $1 trillion Obamacare tax hike.
Obamacare contains twenty new or higher taxes. Five of the taxes hit for the first time on January 1. In total, Americans face a net $1 trillion tax hike for the years 2013-2022, according to the Congressional Budget Office.

The five major Obamacare taxes taking effect on January 1 are as follows:

The Obamacare Medical Device Tax: Medical device manufacturers employ 409,000 people in 12,000 plants across the country. Obamacare imposes a new 2.3 percent excise tax on gross sales – even if the company does not earn a profit in a given year. In addition to killing small business jobs and impacting research and development budgets, this will increase the cost of your health care – making everything from pacemakers to artificial hips more expensive.

The Obamacare Flex Account Tax: The 30-35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs will face a new government cap of $2500. This will squeeze $13 billion of tax money from Americans over the next ten years. (Currently, the accounts are unlimited under federal law, though employers are allowed to set a cap.)

There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are several million families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families.

The Obamacare Surtax on Investment Income: This is a new, 3.8 percentage point surtax on investment income earned in households making at least $250,000 ($200,000 single).

The Obamacare “Haircut” for Medical Itemized Deductions: Currently, those Americans facing high medical expenses are allowed a deduction to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). This tax increase imposes a threshold of 10 percent of AGI. By limiting this deduction, Obamacare widens the net of taxable income for the sickest Americans. This tax provision will most harm near retirees and those with modest incomes but high medical bills.

The Obamacare Medicare Payroll Tax Hike: The Medicare payroll tax is currently 2.9 percent on all wages and self-employment profits. Under this tax hike, wages and profits exceeding $200,000 ($250,000 in the case of married couples) will face a 3.8 percent rate instead. This is a direct marginal income tax hike on small business owners, who are liable for self-employment tax in most cases. The table below compares current law vs. the Obamacare Medicare Payroll Tax Hike:
First $200,000 ($250,000 Married) Employer/Employee
All Remaining Wages Employer/Employee
Current Law
1.45%/1.45% 2.9% self-employed
1.45%/1.45% 2.9% self-employed
Obamacare Tax Hike
1.45%/1.45% 2.9% self-employed
1.45%/2.35% 3.8% self-employed

Fiscal Cliff less than 17 hours to go...

With less than 17 hours to go and both sides being pretty far apart I suspect we will being going off the cliff.  I'm frankly pretty disgusted with the US Senate and Harry Reid. The Senate hasn't done a budget in 4 years and is blaming the house(who has sent a budget to the senate every 4 years)?????  Harry Reid is really playing games with the US. It's so bad the Republicans went to Joe Biden to try and get a deal done.  The truth is upping taxes on the top 1% only raises 60 billion more. Guess what that is  7 days worth of Federal Spending.  I think folks realize that taxes might have to go up(unfortunately) however spending needs to go down.  The automatic tax cuts are going to hit the defense side(and cost 800,000 jobs)  but entitlements are going to be safe(though 99 weeks of unemployment will be gone)?  Seriously how many stories do we hear about EBT cards being used to buy alcohol, cigarettes and lap dances and this isn't being looked at? Everyone agrees that people need help once in a while but entitlements are not a lifestyle. Just look at Greece and see how that is working out....  Healthcare at the state levels will get hit and state revenue will get reduced. Plus don't expect new pilot programs for the 2013-14 fiscal years.  Money is going to be tight.

Good Bye 2012 and Welcome 2013. The only constant is change

As 2012 sets into the sunset(and hopefully the world doesn't end tomorrow) Health Care is face with even more uncertainties.  Medical device companies are facing increasing taxes, 25 states have decided not to build Health Information exchanges, the ACA has yet another legal challenge going to the supreme court.  The one certainty is that performance measures are not going to go away and will have even more expanded importance.  Federal and State dollars will hinge on getting the best results. With the Federal government being even more intractable with RAC audits every dollar will need to be fought for.  Every state will be faced with finding "cost-savings"  which means the private sector will be under increased pressure. Compliance will take a greater role as every company will need to manage risk aversion.

With every gloomy cloud I do think there are some rays of sunshine.  I think the public is slowly starting to realize that good health means taking responsibility for yourself. Wellness is starting to gain traction in employer groups. While it is hard to measure in the short term, living healthy has long term positive effects.   Also I think in light of everything that has happen I think mental health may get serious consideration. Its awful that a tragedy has to happen but as a country we really have failed here. Even HEDIS began tracking more mental health measures this year.

 I'm hoping 2013 ushers in new strength,joy and certainty.

Happy Holidays, Merry Christmas, Happy Hanukkah, and Merry Kwanza

Andy

Next 6 months in Health Care

Next 6 months in Health Care

My gut feeling is that we will fall off the fiscal cliff and then reach some sort of resolution in 2013 but what are the implications for Health Care? Well we've already seen a few, medical device companies are laying people off because of the new taxes hitting January 1, 2013. Not surprisingly 18 US Senators(All democrats) have sent a letter to the White House asking them to not enforce the tax. I guess they noticed they stuck it to their own constituents finally with that tax. Plus your premiums are going up another $65 as an added fee gets started this year(to pay for the uninsured). I think its only the start and the confusion will get worse. I suspect a lot of grant programs will get gutted in HHS as the money disappears.  Plus you will see more RAC audits take place as the federal government wants to pay out less money.  The ACA Act I think will undergo some revision as the economy did not recover in time to lessen the blows of the new provisions. It's going to be a messy ride. 

CHC Certification at last!

CHC Certification at last!!!

I just finally got my notification from HCCA that I passed my Certification in Health Care Compliance.  It's the only certification in the United States for this.  I'm pretty excited about it!!! So now when I babble about compliance issues I have an extra little swagger in my step :)

NCQA 7th Annual Policy conference - Follow-up

Well it was going to take more than a few days to write a follow-up to the conference.  After this trip I burnt my United Airlines One Pass Rewards card. After loosing my luggage both ways on my last trip and this time the engines failed during takeoff as we lifted off the tarmac I won't be flying them again. Plus their customer service/mechanics/baggage handlers staff at Ronald Reagan are truly the worst collection of inept employees assembled under one roof. OK enough of this rant.

The Policy Conference was just an excellent event.  The panel discussions were extremely informative.  To be honest having Congresswoman Schwartz was more of a distraction and really didn't offer up a lot but some canned lines and usual political rhetoric plus she was late.  I would have preferred more speakers on the panels with longer discussion. 

The panelists really gave great insight into PCMH and talking about current trends in the Healthcare.  Sadly nobody could offer a magic bullet to fix the mess(none exists). There was considerable talk about bipartisan solutions.  I had to laugh considering last time the bill was made available for 4 hours and had 2700+ pages. People really need to be called on the carpet on crap like this.  Both parties need to be held equally accountable and the press really needs to do their job and not be mouthpieces for a particular political bent.

What i took away from this conference was that PCMH is the new trendy thing in Healthcare.  However is it viable or financially prudent?  It's way to early to guess.  What I did get a nice sense was that doctor's need help not criticism in the way they do things. We have unreasonable expectations at the practice level for them with current regulations. Either they get help of they will fail and pull out of the medicare/medicaid market.

NCQA 7th Annual Policy conference

At the one day conference today in DC.  Will be very curious what is said and talked about.  Will Blog more on this later today.

Follow-up I think I'm going to need a day to put down i words what was talked about. Very Cool topics and discussions