Sunday, May 2, 2010

Republican? Be Careful What You Wish For!

It's getting pretty obvious that when the Democrats passed health care reform, it was like a fly landing in the Replican's perceived ointment of success. I commented previously on Rep. Paul Ryan's 'Roadmap for America' which would privatize social security, medicare, and medicaid, as well as repeal the Corporate income tax in favor of a 'consumption tax.' To enact the 'roadmap'... healthcare reform would need to be repealed. That's unlikely given the current majorities in Congress, but then, this is an election year, so be careful what you wish for.

A number of bills have been introduced by Republicans to repeal health care reform. The most recently introduced bill is H.R. 5073. It was introduced by Rep. Paul Broun (R-GA) and is intended to repeal the Patient Protection and Affordable Care Act (enacted Senate version) as well as the Health Care and Education Reconciliation Act of 2010 (original House version), plus, it would enact the "Offering Patients True Individualized Options Act of 2009." At only 106 pages it's a short read, but its brevity is evidence of just how much would be stripped away from what is now the law of the land.

This bill would:
  1. Repeal of the 7.5% percentage floor on medical expense deductions,
  2. Repeal of the prescribed drug limitation on deduction for medical care,
  3. Repeal of the 2% miscellaneous itemized deduction floor for medical expense deduction,
  4. Expand the use of tax-preferred health care accounts (HSAs),
  5. Establish a charity care credit,
  6. Extension of COBRA,
  7. Allowing preferential tax treatment of distributions from HSAs to 'qualified charitable" organizations
  8. Amend the Social Security Act to create a Medicare voucher program,
  9. Reform EMTALA (Emergency Medical Treatment and Active Labor Act) requirements (which allow nurses and EMTs as screeners in Emergency rooms), and
  10. Amend Public Health Service Act to provide for cooperative governing of individual health insurance coverage offered in interstate commerce.
  11. Enact rules governing the establishment of 'association' health plans.
While some of these provisions might receive wide-spread approval (tax exempiont repeals in items 1-3), some of the other provisions are problematic. For example, today, there are defined allowable amounts associated with HSAs in the Internal Revenue Code. Under this act, those defined amounts would be replaced with "the amount in effect for such month...". Similarly, it establishes a charity care credit of up to $8,000 annually for doctors who provide up to 100 hours (annually) of "charity medical care" and NO provisions are included within the bill as to what one must divulge to verify such a claim, whether records of that treatment (including the names, addresses, and medical conditions) might become public record as a result of their physician claiming such a tax exemption.

Expansion of tax-preferred HSAs is achieved by opening the HSA tax provisions to include Medicare-Eligible individuals. It would allow medicare recipients to use HSAs that could be rolled over to Medicare Advantage insurance companies.

The extension of COBRA provision is a quite the misnomer since one of the things it does is strip the "maximum required period" provision in section 4980B(f)(2)(i) from IRS Code. It also strips the extension of coverage for disabilities that occur within the first 60 days of COBRA coverage from section 4980B(f)(2)(v) of the IRS Code. Those same coverage provisions are also stripped from ERISA and PHSA.
(a) UNDER IRC.—Subparagraph (B) of section 4980B(f)(2) of the Internal Revenue Code of 1986 is amended by striking clauses (i) and (v) and by redesignating clauses (ii), (iii), and (iv) as clauses (i), (ii), and (iii), respectively.
(b) UNDER ERISA.—Paragraph (2) of section 602 of the Employee Retirement Income Security Act of 2009 (29 U.S.C. 1162) is amended by striking subparagraphs (A) and (E) and by redesignating subparagraphs (B), (C), and (D) as subparagraphs (A), (B), and (C), respectively.
(c) UNDER PHSA.—Paragraph (2) of section 2202(2) of the Public Health Service Act (42 U.S.C. 300bb–2(2)) is amended by striking subparagraphs (A) and (E) and by redesignating subparagraphs (B), (C), and (D) as subparagraphs (A), (B), and (C), respectively.
The big bombshell in this bill however is item 8, replacement of Medicare Part A entitlements with a "Medicare Reform Voucher" program. So, if you were (and I mean 'were') entitled to Medicare A, you'd get a voucher that you could use to attempt to purchase replacement coverage, AND, not only would you no longer receive coverage under Medicare part A, but you'd also be ineligible for coverage you used to receive under Parts B and C. The amount of your voucher which would be deposited into an MSA would depend on what geographic area in which you live and could be used only for premiums, deductibles, copayments associated with that person's health care costs.

The 'cooperative governance' section of the bill is a bit interesting. It defines primary/secondary state rules and requires that in order for an insurance company to sell in a secondary state, it must meet the "federal floor" but may not have to meet all secondary state requirements. Let's see if I can explain. The insurance company operaties primarily in one particular state, but can sell insurance in a secondary state. The interesting piece here is that the insurance company would be exempt from any covered laws in the secondary state as to health care requirement. Thus, if your state requires insurers to cover mamograms, but you're buying insurance from a company operating in your state under the 'secondary state' rules and where mamogram coverage is not mandated in the state where they primarily operate, they would not have to cover mamograms. But of course, that'll be okay, because they have to list their primary and your secondary state of operation on your policy and renewal notices in 12-point bold type. Any such policy must also contain the following notice:People don't read much of anything today, so I doubt this 'bold' notice will change that trend. But they need would need to explore all implications of that notice as it would be the the primary state, not the secondary state, that would have sole jurisdication in enforcing the policy provisions in both the primary and secondary state.
‘Notice: This policy is issued by and is governed by the laws and Regulations of the State of ____, and it has met all the laws of that State as determined by that State’s Department of Insurance. This policy may be less expensive than others because it is not subject to all of the insurance laws and regulations of the State of ____, including coverage of some services or benefits mandated by the law of the State of ____. Additionally, this policy is not subject to all of the consumer protection laws or restrictions on rate changes of the State of ____. As with all insurance products, before purchasing this policy, you should carefully review the policy and determine what health care services the policy covers and what benefits it provides, including any exclusions, limitations, or conditions for such services or benefits.’
There is only one mention of 'pre-existing conditions' in the bill, and that mention is in the section requiring the GAO to determine the availability and cost of health insurance policies for individuals with pre-existing medical conditions. There are NO provisions in this bill that would accomodate people who now have 'pre-existing conditions' that would allow insurance companies to deny them coverage.

This year as the rhetoric reaches its high pitch of election year blather, listen carefully. Weigh your choices just as carefully and analyze whether it's in not just your, but our nation's best interest.

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