Health Reform for 2013 for Health Insurance and Medicare Plans

The New Year bring the addition of several health reform detail that will effect the economy and your money. I will review these and discuss how they might effect you. The biggest effect will be the small business owner who is making income and reporting it on a personal tax return.

1. Medicaid is increasing its payment to Primary Care Physicians. The biggest increases will be in states that have a lot of Medicaid; California, New York, Michigan, and Florida. (100%-200%)…Wow! Georgia will see a 25%-40% increase in Medicaid expansion. Primary Care Providers will be able to provide more free services to these patients. They are receiving a 73% pay raise from the Federal Government. Who pays for this? Initially, it will be added to the deficit and then made up with all of tax increases coming soon.

2. The first new tax is an increase of 0.9% for incomes >$200K or $250K per joint return. There will be a 3.9% tax on investments for people at this income level. The government hopes to raise $210 Billion over 10 years or $21 Billion per year. Medicaid spending today is approximately $450 Billion to $500 Billion per year. The problem with tax increases is that they assume that everything is status quo. These tax payers are usually small businesses. They will need to reduce expenses accordingly to  save the lost of income.

3. Simplify Health Plan explanations in the plan description. I believe this is a great idea as it makes it beneficial to the consumer.

4. Bundled payments for hospitals, doctors, and other healthcare providers for Medicare patients. We know how when you go to a doctor or when you are hospitalized you get many bills from a variety of providers. Medicare will bundle this payment into a fixed amount and distribute it to all providers. Medicare will fix the cost and send out the amount to each provider claiming a stake in the bill instead of getting 10 different providers sending bills. The underlying goal is to reward organizations that are Accountable Care Orginations (ACO) that are agreements between hospitals and providers. We are seeing this with Wellstar and Piedmont who own the Physician practice, own the ancillary provider such as home health, and own the hospital. They will also own a health plan soon and compete with the insurance companies. A one stop shop as you would say for the Medicare patient. The problem with this arrangement is that it takes the choice out of your healthcare and puts it into Wellstar and Piedmont’s hands. What if you want to go to a different place? or a different Physician?

5. The biggest change will start in October when the “Healthcare Exchanges” are set up by the government. This has not been finalized but it appears that you will be able to go online and pick your plan that meets the standards set up by the government and sign up for it. This exchange is set to take full force in 2014 when everybody will be required to have a plan that meets this requirement. We do not have a lot of detail yet so I cannot comment. Georgia will be using the Federal Government model so we will have to wait and see.

Please feel free to comment, email me at bruce@betterbenefitsinsurance.com, or call me at (770) 222-6829 if you would like me to evaluate your current situation and how it will be affected.

Happy New Year! Blessings to all.

Bruce

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