Healthcare Reform


GMO

How Can the Wealthiest Industrialized Nation be the Sickest?

Americans get sick more often than people from any other industrialized nation. Since the mid-1990s, the number of Americans suffering from at least three chronic illnesses nearly doubled:

  • Autism now affects one in 88 children (CDC1), compared to one in 25,000in the mid-1970s
  • Type 2 diabetes rates in the U.S. increased by 176 percent between 1980 and 2010
  • Celiac disease is four times more common now than 60 years ago
  • Alzheimer’s disease rates have doubled since 1980,  and it’s estimated that one in eight older Americans and nearly half of those age 85 and oldernow have it, have it.
  • New infectious diseases are increasing in number, according to a 2008 study.
As America tries to get a handle on its out of control healthcare costs, one of the main causes has gone relatively unexamined. While Genetically modified (GM) foods have been approved by US regulatory authorities under heavy lobbying pressure, evidence in mounting that they are profoundly detrimental to health. While Europeans have an easier time avoiding GM foods,  since laws require labeling, in the US and Canada, , food manufacturers are not required to label if their food is genetically modified or not.  Here are some guidelines for steering clear of GM foods in your diet. WikiHow has pulished these guidelines on How to Avoid Genetically Modified Foods.

5 Steps To Avoid GMO Foods

Here is a summary of some of the recommendations that can help you avoid disease:

1.Get To Know the Most Common Genetic Modification Applications

The products that are most likely to be genetically modified are:

  •  Soybeans – Gene taken from bacteria (Agrobacterium sp. strain CP4) and inserted into soybeans to make them more resistant to herbicides.
  • Corn – There are two main varieties of GE corn. One has a Gene from the soil bacterium Bacillus thuringiensis inserted to produce the Bt toxin, which poisons Lepidoteran (moths and butterflies) pests. There are also several events which are resistant to various herbicide. Present in high fructose corn syrup and glucose/fructose which is prevalent in a wide variety of foods in America.
  • Rapeseed/Canola – Gene added/transferred to make crop more resistant to herbicide.
  • Sugar beets – Gene added/transferred to make crop more resistant to Monsanto’s Roundup herbicide.
  • Cotton – engineered to produce Bt toxin. The seeds are pressed into cottonseed oil, which is a common ingredient in vegetable oil and margarine.
  • Dairy – Cows injected with GE hormone rBGH/rBST; possibly fed GM grains and hay.
  • Sugar. In 2012 the FDA approved GMO Beet Sugars to be allowed to be sold on the market under the name…. “SUGAR” So now, when we go to buy “All Natural” Breyer’s Ice Cream, we can’t even know for sure that we are actually eating regular natural cane sugar. If you see “CANE SUGAR” there’s a good chance it’s not GMO. This is one of the biggest frustrations with labelling, as sugar is in so many things, and we might be avoiding food that POSSIBLY has GMO sugar, but really does not.
  • Papayas.
  • Zuchini.
  • Corn sold directly to the consumer at Roadside stands / markets. Buy organic corn, popcorn, corn chips only.
  • Baked goods: Often has one or more of the common GM ingredients in them. Why do we need corn or soy in our bread, snacks or desserts? It’s hard to find mixes to use as well. Some brands avoid GMs, find one you like and try to stick with it. Organic is one option, learning how to cook brownies, etc, from scratch with your own organic oils is another.

 2. Buy Food Labeled 100% Organic

US and Canadian governments do not allow manufacturers to label something 100% organic ifit has been genetically modified or  fed genetically modified feed. However, “organic” does not mean that it does not contain GMs, since it can still contain up to 30% GMs. Look for these certifications:

  • QAI, Oregon Tilth, and CCOF.
  • USDA Organic standards are far lower.
  • Eggs labeled “free-range”, “natural”, or “cage-free” are not necessarily GE-free, so look for eggs labled 100% organic

3. Recognize Fruit and Vegetable Label Numbers

Here are some guidelines:
  • If it has a 4-digit number, the food is conventionally produced.
  • If it has a 5-digit number beginning with an 8, it is GM. However, PLU labeling is optional.
  • If it has a 5-digit number beginning with a 9, it is organic.

4. Purchase 100% Grass-fed Beef

Most cattle in the U.S. are fed on grass but speend their late years in feedlots and may be given GM corn to increase intramuscular fat and marbling. This applies as well to other herbivores such as sheep. Meat bought locally has less chance of having been fed GM alfalfa.  For pigs and poultry, look for 100% organic.

5. Shop Locally, Buy Whole Foods, And Grow Your Own

  • Most GM foods come from large, industrial farms. Try shopping at farmers’ markets, subscribibng to a local Community Supported Agriculture (CSA) farm, or patronizing a local co-op.
  • Buy whole foods. Buy foods that you can cook and prepare yourself, rather than foods that are processed or prepared.
  • Grow your own:  This is the only way to know exactly what you’re , eating, what went into growing it, and ensuring fresh, healthful food.

Related Reading

 

Economic Inequality Contributes to Gap in Life Expectancy

Economic inequality contributing to gap in life expectancy

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Overall life expectancy has improved substantially since the first Social Security payments were made in 1940.

  • In 1940, a 65 year old man could expect to live 12.7 years, and a woman,  14.7 years.
  • In 2010, this expanded to 18.6 years for men, and 20.7 years for women.

Improving life expectancies led lawmakers in 1983 to slowly move the age people could receive full Social Security benefits from 65 to 67.  Today, as the cost of benefits has increased, there is talk of now raising the retirement age for both Medicare and Social Security. Is this a good idea? Research suggests not.

Michael A. Fletcher’s article in the Washington Post highlights research showing that the gains in life expectancy in the U.S. are going mostly to upper income households.

According to research at theUniversity of Washington, people living in the prosperous community of St. John’s are living well and long:

  • St. John’s women live to nearly 83, four years longer than they did just two decades earlier.
  • St. John’s men live to over 78 years, six years longer than two decades ago.

Compare this to neighboring Putnam County, where incomes and housing values are about half what they are in St. Johns. There life expectancy hasn’t significantly improved since 1989.

  • Putnam women’s life expectancy has risen less than a year to just over 78.
  • Putnam men’s life expectancy has risen by a year and a half to about 71.

Putnam women live 5 years less, and men, 7 years less. And a growing body of research supports these findings around the country.

For instance, a Social Security Administration study done several years ago found that the life expectancy of male workers retiring at 65 had risen six years in the top half of the income distribution, but only 1.3 years in the bottom half over the previous three decades.

And the gap is growing. According to a research study report by the Congressional Budget Office:

  • In 1980, life expectancy at birth was 2.8 years longer for the highest socioeconomic group.
  • By 2000, the gap had grown to 4.5 years.

Where You Live Makes a Difference

 
How long will youlive — and how well?

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County health rankings by the Robert Wood Johnson Foundation show that there is one primary care physician for every 2,623 residents in Putnam county, whereas in St. Johns, there are more than double the ratio of family doctors, one for every 1,067. Additionally, in St. Johns, residents are more likely to seek out information to bolster their health, and are more likely to follow doctors’ orders. Joe Gordy, chief executive of Flagler Hospital, which is in St. Johns County says:

Being more affluent and educated, you are likely to have better access to information and you are also more likely to want it.

In fact, a recent study published in the journal Health Affairs finds that in almost half of the nation’s counties, women younger than 75 are dying at rates higher than before – typically in the rural South and West, where there are few good jobs and little access to medical care. Jeff Feller, chief executive officer of WellFlorida Council describes this as “the Southern disease belt.” He states:

You just have to look at the socioeconomic and demographic differences–unemployment, education levels, income…to understand what is going on. This is fueled by poor economics and a lack of access to health insurance and health coverage.”

Implications for Economic Policy

As politicians debate raising the eligibility age for Social Security and Medicare due to longer life expectancies (currently 65 for Medicare and moving toward 67 for full Social Security benefits) that policy decision would result in fewer benefits for lower-income workers, who tend to die younger. Maya Rockeymoore, president and chief executive of public policy consultancy Global Policy Solutions, says:

If you raise the retirement age, low-income populations would be subsidizing the lives of higher-income people. Whenever I hear a policymaker say people are living longer as a justification for raising the retirement age, I immediately think they don’t understand the research or, worse, they are willfully ignoring what the data say.

In short, raising the retirement age would amount to a significant benefit cut for all but those in the most privileged class, a form of class discrimination.

Furthermore, as healthcare is the biggest driver of American budget deficits, and the U.S. healthcare system has surprisingly low outcomes compared to healthcare expenditures, it makes little economic sense to raise the qualification age for Medicare, as this would only contribute to worsening outcomes and further fuel escalating healthcare costs for all.

blog_government_expenditures_clinton_bush_obama
Now that government spending increases are trending down, it’s an opportune time to tackle healthcare costs

Where There’s a Will There’s A Way

Now that President Obama has bent the spending curve, reversing the spending increases of the former administration, the time has come to address healthcare spending, without making unnecessary cuts to Medicare and other social program beneficiaries. Serious economists have pointed out that there is actually no need for such benefit cuts, and the core  U.S. economic issue isn’t spending, at all, but income inequality.

Now, a study by the  nonpartisan Commonwealth Fund, titled Confronting Costs: Stabilizing U.S. Health Spending While Moving Toward a High Performance Health Care System, finds that the $2.8 trillion U.S. healthcare system can be held to an annual spending target without spending cuts to Medicare, Medicaid, and other government programs by implementing measures to encourage providers to accelerate adoption of more cost-effective care.

The results would be that families, employers and government budgets would receive  relief from their growing financial healthcare burdens.

Commonwealth Fund President Dr. David Blumenthal believes the approach could win bipartisan support in upcoming deficit talks as a more politically acceptable alternative to cutting popular entitlement programs including Medicare.

There is an urgent need for such measures:

  • The United States has the world’s most expensive healthcare system.
  • Government forecasters say it will cost more than $9,200 this year person.
  • Costs continue to outpace inflation and restrain overall economic growth.
  • Americans die earlier and experience higher rates of disease than people in other countries.

Efficiency, Not Benefit Cuts

Although deficit hawks are attempting to turn the discussion to entitlement program cuts, the Commonwealth Fund study finds that benefit cuts are neither necessary nor inevitable. Instead, the study calls for the federal government to set gross domestic product per capita as a target for overall healthcare spending growth. According to the U.S. Centers for Medicare and Medicaid Services.In 2007, before the current slump in growth, healthcare spending rose 7.6% vs. GDP per capita growth of only 4.1 percent.

It’s Not Brain Surgery

‘The Commonwealth Fund study notes that changes that are already taking place could be accelerated, including financial rewards for physicians and hospitals that participate in coordinated team-based treatment strategies. The benefits for It Medicare’s 50 million beneficiaries would include:

  • Better protections against catastrophic illness.
  •  Incentives aimed at better outcomes for lower costs than under the current fee-for-service structure.
  • Freeing up resources for physicians and hospitals by reducing administrative costs.
  • Permanent elimination of a Medicare pay cut for physicians that Congress has repeatedly delayed.
  • And, of course, healthcare savings.

The report estimates that its recommendations could save $1 trillion on healthcare spending over 10 years. Savings would include:

  •  $242 billion savings for state and local governments.
  • $189 billion fom employers.
  • $537 billion for consumers.

Inevitable Change

In other words, not only isn’t it brain science, it’s a no-brainer. Of course, recommendations of this kind were originally included in the Affordable Care Act (ACA, or “Obamacare”) , but politicized as “death panels.”  There is certainly no doubt that cost reforms are needed, and now that the health care reform barrier has been breached and the ACA has created a platform for reform,  progress is inevitable.

Healthcare_Frauds_inline

Impressive Preliminary Results

$60 billion is estimated to be lost each year to Medicare fraud. There is enormous potential in this to help reduce the Federal deficit.  According to Kelli Kennedy of the Associated Press, a new technology system has been designed to stop fraudulent Medicare payments before they are paid out. So far, since it was launched in the summer of 2011, the results are impressive:

  • It has saved about $115 million.
  • It spurred more than 500 investigations.

Federal health officials say that the projected savings are much greater.

How Does It Work?

This $77 million technology system, which was mandated by Congress, is housed in the Baltimore area in a $3.6 million command center. It conducts the same kind of screening that credit card companies now do to scan charges and freeze bad accounts. As a result:

  • $32 million of the savings were accomplished by denying suspicious claims and ejecting fraudulent providers from the program.
  • The remaining $84 million are projected savings flowing from those actions. For example, by ejecting a fraudulent provider who has been billing Medicare for $100 million a year for wheelchairs that patients never receive, savings of $100 million could be achieved in the next year.

Data from the new system launched 536 investigations and provided information for 511 others already in progress. The bulk of the projected savings came in referrals to law enforcement that remain under investigation but will likely result in payment suspensions or kicking providers out of the program. While the system’s projected savings are only for one year,  anti-fraud administrator Peter Budetti noted the actual savings could be much more because a provider that has been banished from the program could have stayed in the system for years, racking up hundreds of millions of dollars in bad claims. Budetti said:

We have shown this technology can work in fighting health care fraud, and we have seen encouraging results. The system is designed to grow in sophistication and complexity, helping the government stay one step ahead of fraudsters.

Getting A Handle On Fraud

In the past, fraud prevention was measured by how much money law enforcement officials recovered. Now it’s based on how much money is saved before it’s paid. While investigators used to individually screen each claim as it came in, making individual determinations, u nder the new system, claims are run through a series of sophisticated computer models that can spot suspicious billing patterns in the context of all of that provider’s claims and claims from other providers in a particular industry.

whack

Whack A Doodle

Debunking all the myths about Obamacare is like playing whack-a-mole. As soon as you dispel one, the right-wing propaganda machine puts out another! What does Factcheck.org say about the latest one: that you will have to pay a sales tax on your home? Here is their response:

Q: Does the new health care law impose a 3.8 percent tax on profits from selling your home?

A: No, with very few exceptions. The first $250,000 in profit from the sale of a personal residence won’t be taxed, or the first $500,000 in the case of a married couple. The tax falls on relatively few — those with high incomes from other sources. FULL QUESTION I received this e-mail:

This should help stimulate the Real Estate market! UNDER THE NEW HEALTH CARE BILL – DID YOU KNOW THAT ALL REAL ESTATE TRANSACTIONS ARE SUBJECT TO A 3.8% “SALES TAX”? YOU CAN THANK NANCY, HARRY & BARACK (AND YOUR LOCAL CONGRESSMAN) FOR THIS ONE. IF YOU SELL YOUR $400,000 HOME, THIS WILL BE A $15,200 TAX. Verified Higher taxes on real estate investments. The 3.8% Medicare surtax would hit average, middle-class investors in real estate. A middle-class taxpayer who happens to sell real estate for a gain in a particular year would be liable for this new tax, regardless of how low her income might be in other, more typical years.

FULL ANSWER We’ve been flooded with queries about this one ever since the health care bill became law. At the last minute, Democratic lawmakers decided on a new 3.8 percent tax on the net investment income of high-income persons. But the claim that this would amount to a $15,200 tax on the sale of a typical $400,000 home is utterly false. The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home. We can understand how this misconception got started. The law itself is couched in highly technical language that only a qualified tax expert can fully grasp. (This provision begins on page 33 of the reconciliation bill that was passed and signed into law.) And it does say the tax falls on “net gain … attributable to the disposition of property.” That would include the sale of a home. But the bill also says the tax falls only on that portion of any gain that is “taken into account in computing taxable income” under the existing tax code. And the fact is, the first $250,000 in profit on the sale of a primary residence (or $500,000 in the case of a married couple) is excluded from taxable income already. (That exclusion doesn’t apply to vacation homes or rental properties.) The Joint Committee on Taxation, the group of nonpartisan tax experts that Congress relies on to analyze tax proposals, underscores this in a footnote on page 135 of its report on the bill. The note states: “Gross income does not include … excluded gain from the sale of a principal residence.” And just to be sure, we checked with William Ahern, director of policy and communications for the nonprofit, pro-business Tax Foundation. “Some home sales would see a tax increase under this bill,” Ahern told us, “but it would have to be a second home or a principal residence generating [a gain of] more than $250,000 ($500,000 for a couple).” So there you have it. The sort of people who would have to pay the tax might include, for example:

  • A single executive making $210,000 a year who sells his $300,000 ski condo for a $50,000 profit. His tax on the sale of that vacation home would amount to $1,900, in addition to the capital gains tax he would have paid anyway.
  • An “empty nester” couple with combined income of over $250,000 a year who sell their $1 million primary residence to move to smaller quarters. If they cleared $600,000 on the sale, they would be taxed on $100,000 of the profit (the amount over the half-million-dollar exclusion). Their health care tax on the sale would amount to $3,800 over and above the usual capital gains levy.

However, a typical home sale would not incur any tax. In March, for example, half of all existing homes sold for $170,700 or less, according to the National Association of Realtors. Obviously, none of those sales could possibly generate a $250,000 profit, and so none would be subject to the tax. Thus, for the vast majority, the 3.8 percent tax won’t apply. The Tax Foundation, in a report released April 15, said the new tax on investment income (including real estate) “will hit approximately the top-earning two percent of families” when it takes effect in 2013. Footnote: Some of the chain e-mails that claim ordinary home sales will be taxed include a copy of an article written by Paul Guppy, a policy analyst with the conservative Washington Policy Institute (that’s Washington state, not Washington, D.C.). The article appeared March 28 as an op-ed in the Spokane, Wash., Spokesman-Review, and Guppy claimed that “[m]iddle-income people must pay the full tax even if they are ‘rich’ for only one day.” That brought a quick rebuttal from Sara Orrange, the government affairs director of the local Realtors association. She wrote a letter to the newspaper calling Guppy’s article “inaccurate” and saying, “Most people who sell their homes will not be impacted by these new regulations. This is not a new tax on every seller, and that correction needs to be made.” In a news article the next day, business reporter Bert Caldwell confirmed that only “a very few” home sellers would pay the 3.8 percent tax. The Internal Revenue Service says that to qualify for the $250,000/$500,000 exclusion, a seller must have owned the home and lived there as the seller’s “main home” for at least two years out of the five years prior to the sale. – Brooks Jackson Correction, Sept. 2: We originally said that the footnote of the JCT report appeared on page 139. It’s on page 135.

Sources

Joint Committee on Taxation. “Technical Explanation of the Revenue Provisions of the ‘Reconciliation Act of 2010,’ As Amended, In Combination with the ‘Patient Protection and Affordable Care Act.’” 21 Mar 2010. Ahern, William. E-mail to FactCheck.org, 22 Apr 2010. National Association of Realtors. “Existing-Home Sales Rise on Home Buyer Tax Credit and Favorable Market Conditions.” Press release. 22 Apr 2010. Fleenor, Patrick and Gerald Prante. “Health Care Reform: How Much Does It Redistribute Income?” The Tax Foundation. 15 Apr 2010. Guppy, Paul. “Health Law’s Heavy Impact.” Spokesman-Review. 28 Mar 2010. Orrange, Sara. “Home sales tax clarified.” Letter. Spokesman-Review. 1 Apr 2010. Caldwell, Bert. “Realtors take aim at health care tax claim.” Spokesman-Review. 4 Apr 2010.

Divorce  Takes Away Many Women’s Private Health Insurance

study by the University of Michigan deprives thousands of women of their health insurance coverage. The study, which will appear in the December issue of the Journal of Health and Social Behavior, analyzed data from women between the ages of 26 and 64 between 1996 and 2007. It finds:

  • 115,000 U.S. women lose their private health insurance in divorce each year as they either: 1) no longer qualify as dependents under their partners’ policies; or 2) can’t afford private insurance.
  • Many women remain uninsured or under-insured for more than two years.
  • The Federal COBRA law allows people in most employers’ plans to maintain their health coverge after divorce, but  COBRA coverage only lasts only up to 36 months.

The Huffington Post draws attention to several of the financial problems around divorce that can be of grave concern to women:

The Takeaway: Hard economic times can create marital strains leading to divorce and separation, and when that happens, women and children often find themselves without health insurance coverage.

Why the ACA Is a Boon to Women and Families

The Affordable Care Act of 2010 (ACA) provides invaluable benefits to mitigate the health care risk that women and their children face in hard economic times and divorce.  It provides security to millions of working age people who are currently uninsured or underinsured or may lose job-based health insurance.  It is especially responsive to the needs of low- and moderate-income people. The Congressional Budget Office estimates that the ACA will cover some 32 million uninsured people over the next ten years, 94% of legal residents. Of the 23 million people who will still lack health insurance, one third are projected to be undocumented residents, who are ineligible for coverage under the law.

Here are some of the provisions that help low- and moderate-income individuals and families gain access to affordable, comprehensive health insurance.

Medicaid expansion: Beginning in 2014, the ACA expands eligibility for Medicaid for all legal residents to 133%  of the federal poverty level (about $14,404 for a single adult or $29,327 for a family of four.) Currently, while several states have expanded eligibility for parents of dependent children, eligibility thresholds are usually well below the federal poverty level, and and adults without children are not currently eligible for Medicaid regardless of income in most states.

State exchanges: The Affordable Care Act provides for the establishment of state or regional health insurance exchanges for individuals and small employers. New insurance market regulations governing health plans will prohibit:

  • Rating on the basis of health.
  • Limits on how much premiums can vary based on age.
  • Lifetime or annual limits on what a plan will pay.
  • Rescission of coverage when someone becomes ill.

 Availability: The exchanges will provide a regulated marketplace in which people without access to employer-sponsored coverage who meet affordability and coverage standards can purchase insurance.

Choice: People purchasing coverage through the exchanges will have a choice of the essential benefit package with four different levels of cost sharing – Plans can cover:

  • 60% of an enrollee’s medical costs (bronze plan).
  • 70% of medical costs (silver plan).
  • 80% percent of medical costs (gold plan).
  • 90% percent of medical costs (platinum).
  • Out-of-pocket costs are limited to $5,950 for single policies and $11,900 for family policies.

Subsidized Premiums for Low to Middle Income Families and Individuals: Sliding-scale premium credits will be available to people with incomes up to 400% of poverty who purchase health plans through the exchanges. The credits will be tied to the silver plan and will cap premium contributions for individuals and families to:

  • 3% of income at just over 133% of poverty ($14,404 for a single adult or $29,327 for a family of four)
  • Gradually increasing to 9.5% at 300% to 400% of poverty ($43,320 for a single person and $88,200 for a family of four.)

Subsidized Coverage for Low to Middle Income Families and Individuals: Cost-sharing credits and lower annual out-of-pocket limits will limit cost-sharing for low- and middle-income individuals and families.  Credits will limit cost-sharing,  increasing the silver plan coverage (70 percent of costs covered) to:

  • 94% for those with incomes up to 150% of poverty.
  • 87% up to 200 percent of poverty.
  • 73% up to 250 percent of poverty

Out-of-pocket expenses will be capped for families earning between 100% and 400% of poverty on a sliding scale ranging:

  • From $1,983 for individuals and $3,967 for families,
  • Up to $3,967 for individuals and $7,933 for families.

Comprehensive Coverage: Qualified health plans sold through the exchange and in the individual and small group markets will be required to provide a federally-determined essential benefit package.  The essential benefit package, the new insurance market regulations, out-of-pocket limits, and cost-sharing subsidies will also help reduce the number of people who are underinsured, ensuring that people have comprehensive health plans that both encourage the use of timely, preventive services and protect against catastrophic costs in the event of a serious accident or injury.

The Individual Mandate: Beginning in 2014, all U.S. citizens and legal residents will be required to maintain minimum essential health insurance coverage through the individual insurance market or an insurance exchange, a public program, or their employer or face a penalty.  There are some exemptions:

  • Individuals who cannot find a health plan that is less than 8% of their income net of subsidies and employer contributions.
  • People who have incomes below the tax-filing threshold ($9,350 for an individual and $18,700 for a family).
  • People who have been without insurance for less than three months.
  • Other circumstances such as religious objections.

Individuals not exempt from the mandate, who cannot demonstrate on a tax form that they have health insurance, will be required to pay a penalty equal to the greater of

  • $95 or 1% of taxable income in 2014,
  • $325 or 2% of taxable income in 2015,
  • $695 or 2.5% of taxable income in 2016
  • Up to a cap of the national average bronze plan premium.

Families will pay a penalty of half the amount for children up to a cap of $2,085 per family.

Conclusions

Women who face losing the health insurance coverage provided through a spouse’s employer due to divorce or due to the loss of work and other economic hardships now have options for themselves and their children. The ACA will mitigate the barriers to coverage that people now face due to loss of employment, preexisting medical conditions and economic difficulty.

The benefits of President Obama’s health care reform program, the Affordable Care Act, include:

What Will It Cost?

But nothing is free, so many wonder what it will cost and who will pay for it. Those who oppose it say that it will add to the national deficit,  and create tax increases for the middle class and small businesses. These assertions are untrue. To better understand the costs, it is helpful to bear in mind that much of the assertions about the ACA has been less than honest partisan political rhetoric. Now that the campaign season is over, let’s take a closer look at how and by whom the ACA is paid for.

Taxes and Credits

The Kaiser Family Foundation and www.irs.gov provide detailed lists of the tax credits and provisions of the Affordable Care Act. Most of the cost burden will be paid by:

  • The health care industry.
  • Employers that provide workers with insurance.
  • Wealthier individuals.

Mandi Woodruff of Business Insider provides a summary of some of the key taxes and credits:The Tan TaxTanning bed users have paid a 10% tax hike since 2o1o. It doesn’t apply to doctor-prescribed phototherapy services, some gym tanning services, or spray tans, but tanning salons, according to the Indoor Tanning Services Tax Center.Medicare surtaxesStarting Jan. 1, 2013, a 3.8 percent surtax will be payable against surplus investments reported by the following wealthier individuals:

  • Single filers reporting $200,000;
  • Married couples reporting $250,000;
  • Married couples filing separately reporting $125,000.

Also starting Jan. 1, 2013, the Medicare tax burden of wealthier individuals will increase by 0.9% on their earned income, according to the Kaiser Family Foundation.  This tax that will apply to:

  • Individuals earning more than $200,000;
  • Married couples filing jointly who make more than $250,000.

Consumer Penalties

As the law mandates coverage for all Americans, those who choose not to participate will be charged tiered penalties that will begin in 2014 and rise over a three-year period, according to the  National Center for Policy Analysis. The penalties (which have been called a “tax” by the Supreme Court) are as follows:

  • 2014: Families––$285 or 1% of total household income, whichever is greater. Individual adults––$95.
  • 2015: Families––$975 or 2% of income, whichever is greater. Individual adults––$325.
  • 2016: Families––$2,085 or 2.5% of income, whichever is greater. Individual adults––$695.

If you’re not covered by your employer, you’ll be able to choose from a list of government-mandated health insurance packages called “exchanges”at the state level. Exceptions apply to some, including low-income families who can prove financial hardship.

Flex Spending Account Limits

Flexible spending accounts will be capped at $2,500 in 2013, and new rules will limit what you can buy with flex accounts. They apply to non prescription medications, except insulin, or expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles, according to the IRS.

Employee Health Coverage

The Affordable Care Act’s aims to ensure that businesses choose low-cost plans, funded by an excise tax on “Cadillac plans” that cost more than $10,200 per individual or $27,500 per family, starting Jan. 1, 2018. However, these threshold amounts may be raised if health care costs rise more than expected before this provision is implemented in 2018, and for firms that may have higher health care costs because of the age or gender of their workers.The Pharmaceutical industryPharmaceutical manufacturers pay higher fees, phasing in on a tiered schedule beginning in 2012:

  • $2.8 billion in 2012-2013;
  • $3.0 billion in 2014-2016;
  • $4.0 billion in 2017;
  • $4.1 billion in 2018; and
  • $2.8 billion in 2019 and later.

Health Care Insurers

Insurers will also pay higher fees, to be phased in as follows:

  • $8 billion in 2014;
  • $11.3 billion in 2015-2016;
  • $13.9 billion in 2017;
  • $14.3 billion in 2018

Subsidies for Small Business Owners

Businesses will receive a tax credit to help subsidize the cost of health plan enrollment. The credit will be:

  • 35% of the employer’s insurance costs through 2013 for companies with fewer than 25 workers and an annual payroll of less than $50,000.
  • Full credit to employers with less than 10 employers with annual wages of less than $25,000.
  • Beyond 2014, the tax credit will extend to 50% if the businesses choose a plan under the health care exchanges.

Is It Affordable?

The political claim has been “We must rein in the skyrocketing cost of health care by repealing and replacing Obamacare.” However, according to Bloomberg,
Connecting current inflation in health care to the new law, which doesn’t take full effect until 2014, is a stretch. Health-care costs have been rising faster than prices in general for many years, though the pace has been slowing recently, in part because of the recession. Health costs rose 3.4% in 2010 from 2009, according to the Bureau of Labor Statistics, while the U.S. inflation rate was 1.6%.
Obama’s health-care law cuts future Medicare costs by more than $700 billion over 10 years, in part by reducing payments to hospitals and insurance companies, including [subsidies to them for] costlier Medicare Advantage plans. Romney says he would restore that money. The Congressional Budget Office has estimated that repeal of the law would increase the federal deficit by $100 billion over 10 years.

The CBO estimated that repealing health reform would:

  • Increase the federal deficit by $109 billion over the 2013-2022 period and
  • Cause 30 million people to lose health insurance coverage.

So the ACA is not only affordable, but an important reform that the economy probably can’t afford to do without.

While Republicans who oppose the ACA have not given full details of how they would replace the health-care law, they have discussed measures to limit compensation for patients injured by medical malpractice. According to a 2009 Congressional Budget Office report, a $250,000 cap on damages would reduce health costs by $54 billion over 10 years, but this is only 0.5% of annual health-care spending.

The ACA goes far beyond this in tackling health care spending, but not far enough. It’s only  a good first step. Independent conservative author Andrew Sullivan has recognized this, saying that he’d like to see conservatives make the ACA better instead of trying to turn back the clock on health care reform.

After all, the ACA began as a conservative proposal by the conservative Heritage Foundation, and it was only after President Obama and the Democrats adopted this Heritage Foundation model that it suddenly became problematic for Republicans pretending to be fiscal conservatives.

The good news is that this is much more likely to happen now that the contentious election is over. The 2012 election is widely assessed as a clear repudiation of partisan extremes, including the Tea Party and Senate Minority Leader Mitch McConnell, who have led an obstructionist and disruptive political agenda. President Obama’s decisive reelection, along with Speaker of the House John Boehner‘s more conciliatory posture bode well for nonpartisan cooperation and compromise on budgetary issues. The ACA will stand, and meaningful measures to discuss cost reduction will be more possible going forward.

The takeaway: Where there’s a will, there’s a way. There are ways to tackle the rising cost health care costs, which is the largest driver of the budget. The political will to get it done will follow, as the severity of the problem is increasingly understood.

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