The Affordable Care Act aka Obamacare Rollout

Well, the Affordable Care Act aka. Obamacare, is the law of the land and set to start really impacting all Americans beginning on January 1st 2014. I thought that this would be a good time to highlight the major provisions and talk about how this new law is going to affect each and everyone of you. Many people are confused and uninformed about Obamacares provisions; its a very complicated law, hence the length of this paper.

Major Provisions of Obamacare 2010 to 2014

The Law The law as passed is approximately 2,700 pages in length and as of this writing the pages of regulations, released by Health and Human Services, exceeds 20,000 pages and is growing daily. For example a recently released rule defining a full time employee took 18 pages. Also, Obamacare created over 150 new federal agencies and regulatory committees. Individual Mandate: almost every US citizen must have acceptable health insurance coverage starting in 2014 or face tax penalties.

Employer Mandate: every company with over 50 employees must provide medical insurance to all full time employees or face tax penalties. Full time has been defined in Obamacare as 30 hours per week. The Obama administration has said that they will ignore this part of the law and defer implementation of the Employer Mandate until 2015. It remains to be seen if the courts will support this decision by the administration. Creation of Federally Mandated Health Insurance Exchanges to provide insurance coverage. States may opt out of creating a state exchange and elect to use the federal exchanges. Allows States to create Basic Health Plans for some uninsured individuals. Application for coverage in the Insurance Exchanges is scheduled to begin this October 1st. Federal Insurance Provisions Prohibits lifetime limits on coverage. Prohibits exclusions for preexisting conditions. Restricts cancellation of policies. Requires first dollar coverage for preventive care for all new coverage in new insurance exchanges. Rebates from Insurers to Insured when Medical Loss Ratio falls below 85% Essential Health Benefits must be included in all insurance plans. Children under the age of 26 can stay on their parents insurance plan. Mandates Insurers and Medical Providers to convert to electronic recordkeeping. Establishes Insurance Exchanges to provide medical insurance coverage for those not covered by employers. Provides for Insurance Premium Subsidies for low-income individuals and families.

New Taxes and Tax Credits Tax credit for Small Businesses (less than 50 employees) up to 35% of premiums paid for their employees (Phases out over a couple of years). Imposes 10% tax on indoor tanning. Implements change to the Adoption Tax Credit and increases adoption assistance by $1,000. Imposes a pharmaceutical industry fee on sales of brand name pharmaceuticals. Increases the additional tax for Health Savings Accounts from 10% to 20%. Excise Tax on Charitable Hospitals and Loss of Tax Exempt Status if they fail to meet new Community Health Assessment Needs, Financial Assistance and Billing and Collection rules set by Health and Human Services. One of these rules penalizes these hospitals for providing free medical care for uninsured Americans, presumably to discourage people from not signing up for Obamacare. Currently about 60% of hospitals fall within this classification Allows the IRS to disallow completely legal tax deductions and other legal taxminimizing plans just because the IRS deems that action lacks substance and is intended to reduce taxes owed. Tax increases on Bio Fuel. Increase of $0.4 billion on Blue Cross/Blue Shield Companies. Adds a $2.3 billion annual tax on the drug companies, to be imposed based on their relative share of annual shares for each year. Elimination of the use of Health Savings Accounts, Flexible Savings Accounts and Health Reimbursement Accounts for non prescription and over the counter medications (except insulin). Implements a new 3.8% surtax on some investment income.

Medicare Payroll Tax Hike. Imposes a new 2.3% excise tax on Medical Devices (i.e. pacemakers, artificial joints, MRI machines etc.) Reduces the amount of medical expenses that can be deducted on Individual Income Tax Returns by 3% creating a threshold of 10% of Adjusted Gross Income. Elimination of the deduction for the employer provided drug coverage for all retirees. Imposition of a cap on Flexible Spending Accounts aka Special Needs Kids of $2,500 from an unlimited cap under current law. This increases income taxes on medical expenses for everyone who was paying for medical expenses with pre tax contributions and will especially hit parents of Special Needs Children very hard. Imposition of a 20% tax on the amount of purchases of prohibited items in Health Savings Accounts. Individual Mandate Excise Tax of $95 to $285 or 1% of your Adjusted Gross Income, whichever is greater for 2014 these amounts increase to $325 to $975 for 2015 and $695 and $2,085 in 2016 (you are exempt from this tax if you make less than $9500 per year). Employer Mandate Tax of from $2,000 to $4,000 per employee for not offering medical insurance coverage if so required. As of this writing the Obama administration has decided to Ignore this part of Obamacare until 2015 $60.1 billion Excise Tax on Comprehensive Health Insurance Plans relative to health insurance premiums collected each year. Imposes a 40% Excise Tax on Comprehensive Health Insurance Plans ie Cadillac health insurance plans where premiums exceed $10,000 for single coverage to $27,500 for families. This particular provision is expected to drastically hit unionized employees. All taxpayers will be required to provide some type of documentation on their federal income tax returns to avoid the penalties under Obamacare.

Medicare Provides $250 rebate for Medicare Part D enrollees under some circumstances. Pharmaceutical manufactures must provide a 50% discount on brand name medicines for Medicare Part D enrollees under some circumstances. Freezes Medicare Advantage payments. Provides a 10% Medicare bonus payment for primary care physicians and general surgeons. Payments from the government to Medicare Advantage plans will be reduced. Further payment changes will be phased in over several years. Currently an estimated 20% of seniors are on Medicare Advantage plans. Reduces federal payments to the Disproportionate Share Hospital program. Medicaid Provides 100% federal taxpayer funding in 2013 and 2014, for the incremental costs for Medicaid to States that so qualify. Federal Medicaid matching payments to states for increased costs of Medicaid due to the expansion of populations to be phased out by 2018. Allows states to offer home and community based services to disabled individuals through Medicaid. Other Provisions Physicians are prohibited from referring patients to hospitals in which they have an ownership interest. Increases federal funding for community health centers to $11 billion over 5 years. Require businesses to report more information on their business activities.

A limit on the amount that health insurance companies can deduct from their taxes to $500,000 of compensation paid to officers, employees, directors and service providers. States may allow companies with over 100 employees to purchase medical insurance in the State Exchanges. Obamacare provides for the hiring of Navigators to help assist taxpayers in complying with the law and signing up for insurance. However, these Navigators will have minimal training before the October 1st rollout. The law sets no requirements for the education or training of Navigators who are not even required to have a High School Diploma or GED. They are not even required to be a legal U.S. citizen. The most disturbing part of the hiring of new Navigators is that the administration has decided to ignore the requirement that Navigators have a background check. This means that anyone, including felons, child molesters and identity thiefs etc. will have access to all your private information. This includes your income, social security numbers, names and ages of your children and address, for example. The projected hourly wage for Navigators is $25 to $40 per hour.

Practical Impact of Obamacare Implementation

As the government is still releasing new regulations each day, businesses and individuals are in a quandary as to how to proceed with making any intelligent decisions regarding their business and personal affairs as they relate to the impact of Obamacare. Nancy Pelosi famously said, We have to pass Obamacare so you can find out whats in it. Well, as more information comes to light and we find out just whats in it, the vast majority of Americans dont like what they see. According to a recently released survey by Rasmussen, a plurality of Americans, 48%, want to see Obamacare repealed. This same survey showed fully 61% of Americans expect healthcare to worsen in the next two years. The percentage of Americans expecting the quality of healthcare to worsen has steadily increased each month and they have yet to feel the real impacts from the law

And, "After passage of this major legislation, those who have networks on Capitol Hill are taking exceedingly lucrative jobs with the same industries subject to the legislation, Public Citizen lobbyist Craig Holman told The Hill. It raises questions about the [bill's] integrity. Former lawmakers and White House officials have signed on with lucrative lobbying firms who benefit from Obamacare's complexity and long implementation timeline. Over 30 former staffers, members of Congress, and White House officials with Obamacare experience are now working on K Street, reports The Hill. The Economy A recent report by the GAO and the Senate Budget Committee estimates that Obamacare will add $18 Billion over the next decade and will increase the long-term Federal Deficit by $6.2 Trillion. This in spite of the fact that President Obama promised on many occasions that Obamacare would not add a single dime to the Federal Deficit. Many analysts outside of the government predict much higher deficit increases due to Obamacare. President Obama also has repeatedly said that all Americans should have health insurance coverage, but the fact is that according to a recent report from the Congressional Budget Office, Obamacare will only cover an estimated 23 Million of the estimated 53 Million legal residents currently without healthcare insurance, leaving 30 Million uninsured Currently the law doesnt cover the estimated 11 Million unauthorized immigrants who live in the United States either, but there is pressure on many fronts to change this. Speaking Thursday at an event in Philadelphia, hosted by a Latino community service group, Secretary of Health and Human Services (HHS) Kathleen Sebelius revealed that the success of ObamaCare is dependent upon the passage of comprehensive immigration reform and amnesty for illegal immigrants. The Heritage Foundation compiled several research papers, one of which shows that Obamacare imposes 18 new taxes and penalties which are estimated to cost Americans over $836 Billion between 2013 and 2022.

Doctors If you like your doctor, you will be able to keep your doctor, period. Another oft stated President Obama promise put to the lie. With record numbers of doctors quitting early due to the burdensome Obamacare regulations, many taxpayers will be without a primary care physician. Additionally, many doctors are moving to a cash only practice and will no longer be accepting any medical insurance, Medicare or Medicaid whatsoever. And the vast majority of doctors left in private practice are being forced into large medical groups and hospitals. The 2013 Deloitte Survey of U.S. Physicians reported; 62% of physicians said it is likely many of their colleagues will retire earlier than planned in the next one to three years. Many other surveys by Athena, Sermo, Doctors Company Survey, the Physicians Foundation, IBD/TIPP and the Doctor Patient Medical Association Foundation have reported similar results. Medical School admissions are currently down by 6% and many of the brightest are opting for other careers. The American Medical College predicts a shortage of 160,000 doctors by 2025 On a personal note I can say that Obamacare could impact a couple of my current physicians. One of them told me that he doesnt know what he is going to do when the new rules requiring computerization of his patients records kicks in on January 1st. He told me that he cant afford to computerize his records, nor does he want to. He may retire or have to join a large medical group. Another of my doctors told me that he is being approached by several Concierge (Cash Only/Monthly Fee) medical practices to join their group. He told me that he really doesnt want to leave his patients, but who knows how the economics of his current practice will affect his future decisions. There are an abundance of stories on the Internet of physicians who have switched to Concierge practices and eliminated almost their entire staffs (more full time job losses) and drastically lowered what they charge patients for care. No longer burdened with all the insurance rules and regulations, they can spend as much time as they want with their patients, even giving consultations over the

phone and Internet. Some are again making house calls. All at significantly lower cost to patients and the doctors are making more money to boot. Doctors joining large hospital groups are becoming salaried employees and have no incentive to work the long hours that they worked in private practice. This trend will further affect the availability of your access to medical care. And according the prepared remarks of President Obama at a meeting of the American Medical Association, he promised doctors we can build a health care system that allows you to be physicians instead of administrators and accountants. Just how is this to be accomplished with the over 20,000 pages of rules and regulations released so far and over 150 new federal agencies and committees to deal with. Medicaid pays only an average of 56% and Medicare 81% of what private insurers pay to doctors. With baby boomers increasingly relying on these programs to pay for medical costs, the availability of doctors willing to accept these patients will significantly decline. None of this factors in the increased demand for doctors from the estimated new 23 Million new insured from Obamacare. Keep your doctor. You will be lucky to find one. Note: If you dont currently have a primary care physician you need to get one prior to January 1st or risk not getting one. When all the new insured come into the market and with doctors cutting hours and retiring, the medical practices accepting new patients will significantly decline. So, what is the governments plan for dealing with this shortage? Well the plan is to push medical care down from your doctor to other medical professionals like Nurse Practitioners, Pharmacists etc. Even Optometrists, who have minimal medical training, are being considered by some states to provide some medical care previously provided by your doctor. This does not bode well for the quality of medical care most Americans are used to.

Spouse and Retiree Benefits In a recent survey conducted by the National Business Group on Health, a membership group that advises large employers about health benefits, and the consulting firm Towers Watson, 20 percent of respondents said they now levy a surcharge of roughly $100 per month on wives who decide not to take advantage of their own employers insurance and instead opt for coverage through their husbands policy. An additional 13% said they plan to do so in 2014. These types of surcharges typically range from $500 a year to $3,000. Many companies, UPS being the most recent, are now reporting that they will be eliminating spousal coverage entirely. Your retiree health plans may also be dropped: "This is one of the most critical findings of our survey," said Julie Stone, senior consultant with Towers Watson. The report showed that more than a quarter of companies polled plan to drop retiree health plans in 2012 and in the future for some employees, such as new hires. Death Panels During the debates over Obamacare, one of the major topics discussed was a provision in the law for what was referred to as Death Panels which would decide when medical treatments would be denied to patients for some medical conditions. While the administration has consistently denied the existence of Death Panels in the law, recently Physician and former Democratic National Committee Chairman Howard Dean, admitted that the Independent Payment Advisory Board, or IPAB is essentially a health-care rationing body that will be able to stop certain treatments its members do not favor by simply setting rates to levels where no doctor or hospital will perform them. The rationing board will decide whether or not some patients get potentially life-saving treatments. Any group who has the power to, in effect, deny medical care in an arbitrary fashion is a Death Panel by any reasonable interpretation.

Taxpayers According to CNBC, a survey released by InsuranceQuotes.com and conducted by Princeton Survey Research Associates reported that nearly two thirds of Americans who currently lack health insurance dont know yet if they will purchase that coverage by the January 1 deadline set by Obamacare. According to the same survey a whopping 68 percent of low income Americans arent sure they qualify for tax credits that would subsidize their purchase of health insurance, despite the fact they almost invariably will qualify. The eventual impact will most certainly increase medical insurance premiums significantly higher than expected due to the fact that not enough healthy people will participate to offset benefits payouts. The survey also found that more than 60 percent of Americans said they fear Obamacare will lead to increased health care costs and that 61 percent said they dont currently have healthcare insurance because they cant afford it. The Looming Premium Rate Shock The U.S. House of Representatives Committee on Energy and Commerce recently released a report detailing the impact of Obamacare on medical insurance premiums. Despite promises that medical insurance premiums would go down under Obamacare, overall just the opposite is happening. In fact during the battle over passage of Obamacare President Obama promised to cut the cost of a typical familys premium by up to $2,500 a year. The Congressional Report showed that, nationally, for those getting a new plan under Obamacare, on average premiums were expected to go up 96%. For those keeping their current insurance the increase is 73% and an increase of as much as 413% based on age. The reports coming from various states by and large support these predictions with very few exceptions like California, for example, which is showing basically flat or slightly higher premiums. However, most all of the major insurers have now pulled out of the California market as they cant make any money at the premiums allowed by the state; leaving few choices for California taxpayers.

Some of the major insurers who have pulled out of some state exchanges or just decided not to even apply are: Blue Cross, Aetna, United and Humana. Combined these insurers currently insure the vast majority of Americans. Remember all the times President Obama said, If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. Sadly, this is just not the case for most Americans as there will be major changes in your choice of available plans and providers. In some states this choice will be no choice as there will be only one major insurer to choose from. Also the government explains: Most health insurance plans offered in the Marketplace have networks of hospitals, doctors, specialists, pharmacies, and other health care providers. Networks include health care providers that the plan contracts with to take care of the plans members. Depending on the type of policy you buy, care may be covered only when you get it from a network provider. Looking closer to home, premiums in Washington State are projected to rise an average of 39% with significant increases imposed on younger taxpayers and slightly lower premiums for older adults. And while some of the increases in premiums will be covered by federal subsidies, the money to pay for these subsidies has to come from somewhere. Meaning other taxpayers will be eventually footing the bill. The Congressional Budget Office estimates the 10-year cost to the government will be over $1.2 Trillion Dollars. In only 5 states are premiums expected to decrease. This whole rate structure assumes that young people will sign up for Obamacare instead of paying a penalty for not enrolling. However, many insurers are wary of this happening as young taxpayers are those least able to pay the exorbitant premiums and will opt to pay the small penalty instead. This is particularly true given that due to the no preexisting condition rules in Obamacare, they can opt out of insurance then later sign up after they get sick. Impact on Taxpayers whos Income is a Dollar over Subsidy Threshold Due to some of the less thought out provisions of Obamacare, some families are going to be faced with having to monitor their income during the year to avoid the pitfalls created by income limits for tax subsidies. For example, it is possible that a middle aged couple with three children could see their annual health insurance premium cost increase by $9,355 for going over the income limitation by $1.

It is really important for all taxpayers especially the self employed to be aware of this pitfall as, in some cases, you will be better off taking time off work than continuing to work. Unfortunately, there were almost zero provisions in Obamacare that will reduce the costs of providing medical care. You can expect your annual medical insurance premiums to continue to rise each year. Delay of Employer Mandate and Small Business Program President Obama, ignoring his own signature law, has administratively decided to delay the employer mandate, under Obamacare, for companies to provide medical insurance coverage to their employees by January 1st 2014 until 2015. This decision was widely viewed as a political one. It was meant to delay the negative impacts that will result from the implementation of this mandate and the concomitant negative impacts for the Democrat Party until after the mid-term congressional elections. Due to this delay many Americans will be dropped from their company provided insurance coverage but, due to rules relating to coverage by employers, they will not be eligible to get insurance coverage from the exchanges. In other words they will have no medical insurance for 2014. Additionally, The administration yet again decided to ignore another program designed to provide affordable health insurance to small businesses scheduled to begin in 2014, a program the New York Times called a major selling point for the health-care legislation. Delay of the Caps on Out Of Pocket Expenses This provision is the major part of Obamacare that was supposed to make Obamacare affordable. No caps on out-of-pocket expenses means insurance customers will have to pay more for co-payments and deductibles and insurance companies will be required to pay less.

Recent Exclusion of Congress from some Obamacare Provisions President Obama recently decided to ignore another provision of the law to give Congress and their staff relief from some unintended costs associated with Obamacare. And while I understand that there were some unintended consequences negatively impacting the costs borne by Congress and their staff, this is yet another instance where the President has chosen to again ignore the law when the rest of us are stuck with all the negative provisions of Obamacare. Jobs Recent studies have reported that almost one third of business owners have cited new requirements under Obamacare as either the first or second biggest factor in delaying hiring new employees. Partially, this is due to the uncertainty over the lack of information from the government concerning just how they are supposed to comply with the law. However, new costs (i.e. New taxes and increased medical costs) associated with Obamacare are also a major factor in their decisions to delay hiring and expansion. Many major employers have already publicly reported that they are going to be hiring mostly part time employees and converting full time employees to part time to avoid having to cover them under Obamacare. And this is not only hitting private companies, but also many States and Municipalities are reporting a move to part time jobs due to the costs associated with Obamacare and budget shortfalls. The July Jobs Report, by the Bureau of Labor Statistics, just released, showed that 963,000 jobs were created in the past 6 months and not surprisingly 936,000 of them were part time! In other words, over 97% of new jobs in the past 6 months were part time. Keith Hall the former head of the Bureau of Labor Statistics recently said, This has never happened before. Over the past 4 months the July Jobs Report showed that only 9,000 net new jobs were created. Thats 110 part time jobs created for every one full time job since March. Currently the number of Americans working part time because they cant find full time work, hit an all time high. We are rapidly becoming a nation of part time workers.

Exchanges To date 33 states have opted not to set up state run insurance exchanges, putting the burden of running Obamacare on the federal government run exchange. By all accounts the federal exchange will not be fully up and running by October 1st if at all. In two reports, GAO acknowledged that state and federal officials have made significant progress in developing the regulatory framework and guidance to implement the exchanges. However, the GAO said that state and federal officials still have major work to complete before open enrollment begins Oct. 1, noting that it is unclear if they will meet the deadline. The reports identified several issues facing state and federal officials, including:

Officials creating the small business exchanges still must review plans that will be sold and train and certify consumer aides who will help companies and individuals enroll in plans; and A federal "data hub" designed to help individuals determine their eligibility and enroll in plans offered through the exchanges has only undergone initial testing.

According to the reports, the 17 states running their own exchanges have missed deadlines on an average of 44% of key activities that were scheduled to be completed by the end of March. "While interim deadlines missed thus far may not impact the establishment of exchanges, any additional missed deadlines closer to the start of enrollment could do so," the reports warned. Unions Even the Unions that supported President Obama and Obamacare are unhappy. The leaders of three major U.S. unions, including the highly influential Teamsters, have sent a scathing letter to Democratic leaders in Congress, warning that unless changes are made, President Obamas health care reform plan will destroy the

foundation of the 40 hour work week that is the backbone of the American middle class. Letter to Obama, Senator Harry Reid and Minority Leader Nancy Pelosi, extract: Time is running out: Congress wrote this law; we voted for you. We have a problem; you need to fix it. The unintended consequences of the ACA (Obamacare) are severe. Perverse incentives are already creating nightmare scenarios: First, the law creates an incentive for employers to keep employees work hours below 30 hours a week. Numerous employers have begun to cut workers hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits. Second, millions of Americans are covered by non-profit health insurance plans like the ones in which most of our members participate. These non-profit plans are governed jointly by unions and companies under the Taft-Hartley Act. Our health plans have been built over decades by working men and women. Under the ACA as interpreted by the Administration, our employees will be treated differently and not be eligible for subsidies afforded other citizens. As such, many employees will be relegated to second-class status and shut out of the help the law offers to for-profit insurance plans. And finally, even though non-profit plans like ours wont receive the same subsidies as for-profit plans, theyll be taxed to pay for those subsidies. Taken together, these restrictions will make non-profit plans like ours unsustainable, and will undermine the health-care market of viable alternatives to the big health insurance companies. We continue to stand behind real health care reform, but the law as it stands will hurt millions of Americans including the members of our respective unions. The negative impact of Obamacare on union benefits is much worse than anything Scott Walker implemented in Wisconsin when near riots broke out by public employees. Where are the outrage and the demonstrations now?

Privacy The Internal Revenue Service is going to be responsible for determining your eligibility for Obamacare, imposing penalties and will have full access to your medical records. Enough said. The security of your medical information which will be accessible through the electronic medical records system, Hub, has not yet been certified as being secure from hackers and identity thieves, according to a new report from the Inspector General for the Department of Health and Human Services. This in spite of the fact that; it is federal law that no new systems are allowed to be implemented without this certification. The law also provides for evidence-based inspections of high-risk populations, defined as families on which any of these conditions apply: The mother is under 21; someone is a tobacco user; children have low student achievement, developmental delays or disabilities; individuals who are serving or formerly served in the armed forces. Some critics maintain that even homeschoolers may be subject to intervention in school readiness, and farm families could face intervention to prevent child injuries. Some gun owners may be required to comply with safety inspections. Does this mean that IRS agents will be allowed into your home without a warrant? No one really can answer this question, but it appears that they will. Obamacare Scams CNBC recently reported that Obamacare is a dream come true for rip-off artists. You are starting to see many fake health-care exchanges on the Internet whose sole purpose is to obtain your personal financial information. These scam-artists are also starting to call, fax and email people claiming to be from an Exchange or Medicare or an Obamacare Navigator. They are asking for bank account information and your Social Security Number to verify your personal information and to make sure you get the proper benefits

Do Not Fall For Any Of These Scams!

In Conclusion It is important to remember when you are navigating the new medical landscape caused by Obamacare in years to come that this legislation passed Congress without a single Republican vote. No Republican Senators or Representatives supported this mess. And they have continually tried to delay its implementation, amend it and outright repeal it. They have been fought tooth and nail by the Democratic Party. This law is so badly written and has so many negative issues and unintended consequences that even President Obama has administratively decided to; ignore, without any Congressional approval or amendments whatsoever, his own law. And Finally Senator Harry Reid recently said that Obamacare is just a step towards an eventual single-payer system. Welcome to Socialized Medical Care. The Affordable Care Act is neither affordable nor caring.