Increasing Taxes are the New Fad

It No Longer Pays to Have Money

Who would ever think there would come a time when people don’t want to have a lot of money? Well, that time is coming soon. The new Patient Protection and Affordable Care Act (PPACA), passed earlier this year, notably increases access to health care coverage for many Americans. High-risk state insurance pools are being rolled-out; children under 19 – and even all adults come 2014 – cannot be denied health care coverage due to pre-existing conditions; and tax credits will be given to small businesses offering health insurance to their employees.


On top of that, the large post-World War II generation called the baby boomers is just entering retirement. This means that the largest generation of Americans in history is starting to collect social security and enroll into the Medicare program. Where is the money going to come from for all this?

If you guessed taxes, you’re right! Taxes are being raised, particularly for “rich” people. This does not mean that Bill Gates and his elite friends are going to give the government billions extra; rather, in a society where the average income of a four-person family is only $59,894, the “rich” are considered to be individuals with income over $200,000 or couples with joint income over $250,000. For these rich people, the Medicare payroll tax will increase by .9% beginning in 2013. Also, a new 3.8% tax is to be imposed on unearned income from interest, dividends, annuities, royalties and rents. And many states are increasing tax rates too.

The rates are rising for state income taxes.

Yet what does this mean for insurance costs? Medicare Part B premiums are steadily increasing, more so for those with higher incomes. There are levels through which premium payments are determined, dependent upon income. Only if the prior year individual income was less than $85,000 (or less than $170,000 if filing a joint return) will there be no income-related addition to the monthly Part B premium paid.

Under PPACA, businesses also will shoulder the burden of increasing health care costs. Small businesses received some benefit with potential tax credits, but larger businesses are coerced to provide coverage or pay a penalty. As of 2014, businesses of at least 50 full-time-equivalent employees will have to pay the government $2,000 per employee (excluding the first 30 employees) if it does not offer health insurance. If the business DOES offer health coverage, and employees decide to purchase insurance through an exchange and receive a subsidy, the business must pay the government $3,000 per employee. Many businesses may elect to pay these fines in lieu of offering group health plans, which generally are pricey and will only become more expensive as a consequence of all of the mandates in PPACA.

What advice could we possibly provide to you? It’s very simple, be more careful than ever with your expenditures. Since there’s not much any of us can do individually to hold the line on insurance premiums or taxes, budget wisely as the going is getting tough. And if you still want to have a lot of money in the future that’s OK, but be prepared to share.



Until next time,

AH Insurance Services

Government Internet Portal

The Government Internet Portal
The new Internet portal (created under the Patient Protection and Affordable Care Act) is up and running! What does it do? Go check it out for yourself at HealthCare.gov. You can find and compare health care options in your area to meet your needs. It shows what government and private programs will be right for you under the terms of the Patient Protection and Affordable Care Act.

It's always a wise idea to consult with a licensed health insurance agent before choosing your health care plan. Follow this link to find a health insurance expert: http://www.ahinsuranceservices.com/



Check back soon for more insurance information.

High-Risk Insurance Pools: What are they?

Want to Know What High-Risk Insurance Pools Are?
One of the many parts of the new Patient Protection and Affordable Care Act (PPACA) is the creation of high-risk insurance pools, starting on July 1, 2010. Well, you probably have a few questions on high-risk insurance pools. What are they? Do they benefit you? Will these insurance pools cause an increase in your tax rate?


High-risk insurance pools are pools of money allocated to help provide health insurance for people with pre-existing medical conditions. The majority of individuals in the United States of America are covered with group health insurance plans provided by employers, and many more are capable of buying individual health insurance plans from companies such as Aetna and Humana. Even low-income families can obtain health insurance from state programs. However, someone with a pre-existing condition like, for an example, diabetes can be denied health insurance from private companies.

According to the PPACA, nobody can be denied health insurance based on pre-existing conditions starting January 1, 2014. Yet what can one do for the three and a half years until then? This is where high-risk pools come into the picture. The federal government has allocated five billion dollars to provide health insurance for those with pre-existing conditions that are unable to get coverage from private companies until January 1, 2014. The dispersal of these funds is not uniform among all fifty states; it is based on estimates of how many people will use it in each state.



Distribution of funds among the fifty states



One can only apply to receive benefits from the high-risk insurance pool if one has been denied coverage and has not had health insurance for at least six months. Nonetheless, it is not a free governmental program; insurance premiums must be paid in order to obtain coverage. In general, the premiums will be on par with those of plans offered by private corporations within the state that provide similar coverage. The good thing about this for most people in the United States is that it ensures that the high-risk insurance pool is self-sustaining: the program will not be an extra burden on taxpayers.

Yet will five billion dollars be enough? Estimates of the number of individuals that will take advantage of the high-risk insurance pool range from 200,000 to 700,000 Americans. It is apparent that some states are worried about adequate funding throughout the duration of the program. Only 28 states (and the District of Columbia) have set up their own high-risk insurance pools by federal guidelines; the other 22 have rescinded their responsibility of administering their high-risk pools to the federal government. In the case of financial failure of the program in these states, the unpaid bills will be transferred back to the federal government rather than the individual state governments. These states may just be watching their backs, but perhaps they are not confident in the feasibility of the high-risk pools.



See if your state's high risk pool is state-run or federally-run.




Until next time!

First Year Changes Under Obama's Health Care Reform Bill

Welcome back to my Blog on 2010 Health Care Reform Legislation! After making my first post with a video from last fall of President Obama promoting his health care reform bill -- and promising to post another video -- I was informed that watching the President pitch his health care reform package isn't much of a draw! Therefore, I'll simply provide a summary of the first-year health care changes he mentioned in his March 6, 2010 address and mention to his loyal fans that the video can be found at the White House Blog.

Quoting the President on first-year health care changes:

• "Small business owners will receive tax credits to purchase health insurance."
• "Thousands of uninsured Americans with pre-existing conditions will finally be able to purchase coverage."
• "Insurance companies will no longer be allowed to deny coverage to children with pre-existing conditions."
• "They will no longer be allowed to drop your coverage when you get sick."
• "This year, all new insurance plans will be required to offer free preventive care to their customers."
• "There will no longer be lifetime limits or restrictive annual limits on the amount of care you receive."
• "Young adults will be able to stay on their parents' insurance policy until they're 26 years old."
• "There will be a new, independent appeals process for anyone who feels they were unfairly denied a claim by their insurance company."
• "Finally, seniors who fall into the gap in coverage known as the donut hole will receive $250 to help them pay for their prescriptions."

To learn more about how 2010 health care reform legislation impacts you, please visit:

http://www.ahinsuranceservices.com/healthcarereform.html

In my next post, I'll review the impact of health care reform on the Medicare program. Stay tuned!

Until next time,

Andrew Herman

How Will 2010 Health Care Reform Legislation Impact You?

Welcome to my Blog on 2010 Health Care Reform Legislation that became law in March of this year!

Like it or not, health care reform is here to stay. My blog will pay special attention to the impact of the health care reform bill on Medicare, since that program is near and dear to so many here in the Sunshine State.

One of the features I plan to offer regularly is "What's New This Week." In these posts I'll share something noteworthy for the upcoming week or provide an update on an important topic discussed in a prior post

So, What's New This Week? On June 10, a $250 rebate check might be coming in the mail! That's if you have a Medicare Part D drug plan and you've already entered the dreaded coverage gap, or donut hole, this year.

According to Kathleen Sebelius, Secretary of the Department of Health and Human Services (HHS), Medicare beneficiaries need not take any action to receive their rebate since its issuance is based on Medicare billing data.

The $250 rebate checks to be mailed throughout the remainder of 2010 mark the first milestone of a 10-year timeline over which the Medicare Part D coverage gap will be eliminated. Next year, a 50% discount will apply to brand name drugs for those who are in the coverage gap.

To learn more about the Medicare Part D program, including how the coverage gap works, please visit our Medicare Prescription Drug Coverage page.

For the record, I'm posting a video of President Obama speaking about the health care bill back in September:

In this address, the President mentioned a number of key elements of his package including:

• No more denial of coverage for pre-existing conditions
• No dropped coverage when you get sick
• Elimination of yearly and lifetime caps on coverage
• Cap on out-of-pocket expenses
• Required coverage for preventive care
• New Insurance Marketplace (Exchange)

Most of the proposed elements of President Obama's plan became law with the passage of the Patient Protection and Affordable Care Act (PPACA), revised by the Health Care and Education Reconciliation Act of 2010 and signed into law on March 30, 2010; however many of the important plan provisions don't go into effect until 2014 or later.

Look for another post this week, this one featuring a more recent video of the President speaking about health care reform changes that are effective in the first year following passage of this historic bill.

Until next time,


Andrew Herman