Posted by: reddiva | September 21, 2009

THERE’S NOTHING LIKE STICKING IT TO THE AMERICAN PEOPLE


[As promised, we’re on page 32 of The Baucus Bill.   The first thing I saw when I opened my copy of this monstrosity was the penalty that a company will pay if they do not provide health care coverage for their employees.  We’ve already seen how they are going to phase out private insurance companies; now, they are going to phase out ALL companies with penalties like this.]

Required Payments for Employees Receiving Premium Credits. All employers with more than 50 employees that do not offer coverage would be required to pay a fee for each employee who receives a tax credit for health insurance through a state exchange. The number of employees shall be accounted from the most recent year using the COBRA definition of employee that applies for purposes of determining if an employer is eligible for the small employer exception from continuation coverage.

For each full time employee (defined as working 30 hours or more each week) enrolled in a state exchange and receiving a tax credit, the employer would be required to pay a flat dollar amount set by the Secretary of HHS and published in a schedule each year. The flat dollar amount would be equal to the average tax credit in the state exchanges. These payments would not be linked to the individual, but would be contributed to a general fund. The assessment is capped for all employers at an amount equal to $400 multiplied by the total number of employees at the firm (regardless of how many are receiving the state exchange credit).

The employer would pay the lesser of the flat dollar amount multiplied by the number of employees receiving a tax credit or a fee of $400 per employee paid on its total number of employees.

For example, Employer A, who does not offer health coverage, has 100 employees, 30 of whom receive a tax credit for enrolling in a state exchange offered plan. If the flat dollar amount set by the Secretary of HHS for that year is $3,000, Employer A should owe $90,000. Since the maximum amount an employer must pay per year is limited to $400 multiplied by the total number of employees (for Employer A, 100), however, Employer A must pay only $40,000 (the lesser of the $40,000 maximum and the $90,000 calculated fee).

[I am so impressed.  This plan will actually save the company who has 100 employees $50,000 because they capped the penalty at $40,000.  As if that isn’t enough, the amount of the penalty this sample employer will pay may be more than the $40,000 because the Secretary of Health and Human Services will determine the dollar amount per employee.

Once again, the penalty will not do anything for Joe Blow Citizen – the penalty goes into a “general fund.”  No doubt, that is to help us pay for those non-citizen mothers we were discussing when we stopped last time.

For this next part, I am going to omit the “Current Law” because I think I have already given you my opinions of co-ops often enough.  Just read this part and tell me, if you can, what keeps this from being a government health care organization not run as a business and certainly not making any money to put into the government treasury.  Sounds like a government operation to me.

I am aware of item number 4, but that is just smoke and mirrors.  What non-profit organization is going to start up a whole new corporation just to provide health care for people using start up funds from the Federal government without being responsible to the Federal government?]

SUBTITLE E—CREATION OF HEALTH CARE COOPERATIVES

Chairman’s Mark

The Chairman‘s Mark authorizes $6 billion in funding the Consumer Operated and Oriented Plan (CO-OP) program to foster the creation of non-profit, member-run health insurance companies that serve individuals in one or more states. CO-OP grantees would compete in the reformed individual and small group insurance markets. Federal funds would be distributed as loans and grants. Loans would be provided to assist with start-up costs, and grants would be provided to meet state solvency requirements.

In order to be eligible for Federal funds under the CO-OP program, an organization must meet the following requirements.

1. It must be organized as a non-profit, member corporation under State law.

2. It must not be an existing organization that provides insurance as of July 16, 2009, and must not be an affiliate or successor of any such organization.

3. Its governing documents incorporate ethics and conflict of interest standards protecting against insurance industry involvement and interference.

4. It must not be sponsored by a State, county, or local government, or any government instrumentality.

5. Substantially all of its activities must consist of the issuance of qualified health benefit plans in the individual and small group markets in each State in which it is licensed to issue such plans.

6. Governance of the organization must be subject to a majority vote of its members (i.e., beneficiaries.)

7. As provided in regulations promulgated by the Secretary of Health and Human Services (HHS), it must be required to operate with a strong consumer focus, including timeliness, responsiveness, and accountability to members.

8. Any profits made would be required to be used to lower premiums, improve benefits, or for other programs intended to improve the quality of health care delivered to members.

SUBTITLE F—TRANSPARENCY AND ACCOUNTABILITY

Ombudsmen Program

Current Law

No provision.

Chairman’s Mark

In 2010, states would be required to establish an ombudsman office to act as a consumer advocate for those with private coverage in the individual and small group markets. Policyholders whose health insurers have rejected claims and who have exhausted internal appeals would be able to access the ombudsman office for assistance.

Health Insurance Consumer Assistance Grants

Current Law

No provision.

Chairman’s Mark

Authorizes $30 million (and such sums as necessary after these dollars are expended) to establish a new competitive grant program to support consumer assistance organizations in each state. Grantee organizations would assist consumers in solving problems and navigating health insurance coverage transitions, as well as collect data on consumer encounters, and report to HHS on types of problems and inquiries

Transparency

Current Law

No provision.

Chairman’s Mark

Beginning in 2010, to ensure transparency and accountability, health plans would be required to report the proportion of premium dollars that are spent on items other than medical care. Also, beginning in 2010, hospitals would be required to list standard charges for all services and Medicare DRGs.

[Medicare DRG is also known as MS-DRG, Medicare Severity Diagnosis-related Group.

I am skipping through many pages of this ridiculous approach to government sponsored health care because it really is just more of the same.  Senator Baucus is telling all the insurance companies, drug manufacturers, hospitals and physicians what they can do and suggesting repercussive action for not doing as they are told.  Medicare is in a bigger mess with this plan that it currently is even though there is, in my opinion, a valid attempt to make it better.  I believe that the success of this plan will spell the end of the Medicare program within 10 years because the treatments will become so limited and the repayments to hospitals, physicians, pharmacies and drug manufacturers will become too irrelevant to maintain.

More “required reporting” to federal agencies and/or the Secretary of Health and Human Services accompanies this proposal and continues the absurdity we found in the other health care bills I discussed here.

I almost got excited when I saw this next part.  But after reading it, I realize that it does not address the issue.  It doesn’t offer physicians any viable alternative to paying enormous costs for mal-practice insurance and doesn’t address attorney fees at all.]

SUBTITLE H—SENSE OF THE SENATE REGARDING MEDICAL MALPRACTICE

Current Law

No provision.

Chairman’s Mark

The Chairman‘s Mark would express the Sense of the Senate that health care reform presents an opportunity to address issues related to medical malpractice and medical liability insurance. The Mark would further express the Sense of the Senate that states should be encouraged to develop and test alternatives to the current civil litigation system as a way of improving patient safety, reducing medical errors, encouraging the efficient resolution of disputes, increasing the availability of prompt and fair resolution of disputes, and improving access to liability insurance, while preserving an individual‘s right to seek redress in court. The Mark would express the Sense of the Senate that Congress should consider establishing a state demonstration program to evaluate alternatives to the current civil litigation system.

[I had to read all the way to page 195 before I finally got into the “don’t worry we won’t raise your taxes” section.  Care to put your own money on how successful they will be at this?]

TITLE VI—REVENUE ITEMS

Excise Tax on High Cost Insurance

[ … ]

Chairman’s Mark

The Chairman‘s Mark imposes an excise tax on insurers if the aggregate value of employer-sponsored health coverage for an employee exceeds a threshold amount. The tax is equal to 35 percent of the aggregate value that exceeds a threshold amount. The threshold amount is $8,000 for individual coverage and $21,000 for family coverage for 2013. The threshold amounts are indexed to the Consumer Price Index for Urban Consumers (CPI-U) as determined by the Department of Labor beginning in 2014. The excise tax is imposed pro rata on the issuers of the insurance. In the case of a self-insured group health plan, a Health FSA, an HRA, the excise tax is paid by the plan administrator. Where the employer acts as plan administrator to a self-insured group health plan, a Health FSA, or an HRA and with respect to employer contributions to an HSA, the excise tax is paid by the employer.

In determining the amount by which the value of employer sponsored health insurance coverage exceeds the threshold amount, the aggregate value of all employer-sponsored health insurance coverage is taken into account, including coverage in the form of reimbursements under a Health FSA or an HRA, employer contributions to an HSA, and coverage for dental, vision, and other supplementary health insurance coverage.

Employer-sponsored health insurance coverage is health coverage offered by an employer to an employee without regard to whether the employer pays for the coverage (and thus the coverage is excludible from the employee‘s gross income) or the employee pays for the coverage with after-tax dollars. In the case of a self-employed individual, employer-sponsored health insurance coverage is coverage for any portion of which the self-employed individual claims a deduction under section 162(l).

Limiting Flexible Spending Arrangements under Cafeteria Plans

Flexible Spending Arrangement Under a Cafeteria Plan. A flexible spending arrangement for medical expenses under a cafeteria plan (Health FSA) is an unfunded arrangement under which employees are given the option to reduce their current cash compensation and instead have the amount of the salary reduction made available for use in reimbursing the employee for his or her medical expenses. The maximum amount of reimbursement from a Health FSA must be available at all times during the period of coverage.  Health FSAs are subject to the general requirements for cafeteria plans, including a requirement that amounts remaining under a Health FSA at the end of a plan year must be forfeited by the employee (referred to as the “use-it-or-lose-it rule”).

Chairman’s Mark

Under the Chairman‘s Mark, salary reductions by an employee for a taxable year for purposes of coverage under a Health FSA under a cafeteria plan are limited to $2,000.  Thus, when an employee is given the option to reduce his or her current cash compensation and instead have the amount of the salary reduction made available for use in reimbursing the employee for his or her medical expenses, the amount of the reduction in cash compensation is limited to $2,000 for a taxable year. The Mark does not limit the exclusion for health coverage offered through an HRA.

Effective Date

The Chairman‘s Mark is effective for taxable year beginning after December 31, 2012.

[While this portion would not be considered a specific “tax hike”, it will result in that by limiting the amount of money the employee can have deducted from their paychecks for deposit into their Flexible Spending Account (FSA).  I suppose the difference is that it is a “payroll tax” as opposed to an “income tax.”]

Annual Fee on Manufacturers and Importers of Branded Drugs

Chairman’s Mark

The Chairman‘s Mark would impose a fee on any person that manufactures or imports prescription drugs for sale in the United States. Fees collected would be credited to the Medicare SMI trust fund. The aggregate fee on the sector would be $2.3 billion payable annually beginning in 2010. Under the Mark, the aggregate fee would be apportioned among the covered entities each year based on each entity‘s relative market share of covered domestic sales for the prior year. The Mark would require that the fee be paid on an annual basis.

A “covered entity” would be defined under the Mark as any manufacturer or importer of certain drugs or biologics offered for sale under prescription in the United States and would include both domestic and foreign manufacturers and importers of such products. For purposes of the Mark, the term covered entity would include a parent, its affiliates, and other related parties.

Under the Chairman‘s Mark, “covered domestic sales” would include sales of branded prescription drugs made to or funded by “specified government programs.” Branded prescription drugs would be defined to include single source or innovator multiple source drugs, but would exclude orphan drugs.

“Specified government programs” are: Medicare, Medicaid, Veterans Administration and TRICARE. The Mark would provide that the Secretaries of the respective agencies responsible for administration of the specified government programs report to the Secretary of the Treasury the covered domestic sales of branded prescription drugs for each covered entity for the prior calendar year. The Secretary of the Treasury would establish individual assessments by determining the relative market share for each covered entity. A covered entity‘s relative market share would be the entity‘s total covered domestic sales from all specified government programs as a percentage of the total covered domestic sales from all specified government programs for all covered entities. In determining each covered entity‘s relative market share, covered domestic sales will be taken into account as follows: 0 percent of sales up to $5 million; ten percent of sales over $5 million and up to $125 million; 40 percent of sales over $125 million and up to $225 million; 75 percent of sales over $225 million and up to $400 million; and 100 percent of sales over $400 million. The fee assessed is determined by the covered entity‘s market share in the preceding calendar year.

The fees assessed under the Chairman‘s Mark would not be deductible for U.S. income tax purposes.

Effective Date

The Chairman‘s Mark would be effective for calendar year 2010 and thereafter, with respect to domestic covered sales in calendar year 2009 and thereafter.

[Regardless of how much less a drug manufactured outside the USA costs for production, the American people are not allowed to benefit.  Why am I not surprised?

And they have no plans to force privately owned health insurance companies out of business?]

Annual Fee on Health Insurance Providers

Current law does not impose an annual sector fee on U.S. health insurance providers.

Chairman’s Mark

Under the Chairman‘s Mark, an annual fee applies to any U.S. health insurance provider with respect to health insurance.

A U.S. health insurance provider includes any company subject to Federal income tax as an insurance company under part I or part II of subchapter L of the Code, as well as any organization exempt from Federal income tax under section 501(a) of the Code that provides insurance. In addition, a U.S. health insurance provider includes (1) any insurer that sells employer-sponsored group health care coverage to employees that are either U.S. citizens or are employed in the United States, and (2) any insurer that sells health care insurance to individuals or groups of individuals (whether or not U.S. citizens) in the United States. A Federal, state, or other governmental entity is not a U.S. health insurance provider. However, a company or organization that underwrites policies for government-funded insurance is a U.S. health insurance provider for purposes of the Mark. An employer that self-insures its employees‘ health risks is not considered a U.S. health insurance provider for purposes of the Mark.

The aggregate annual fee for all U.S. health insurance providers is $6 billion. Under the Chairman‘s Mark, the aggregate fee is apportioned among the providers based on relative market share.

[…]

The fees assessed under the Chairman‘s Mark would not be deductible for U.S. income tax purposes.

Effective Date

The Chairman‘s Mark is effective for calendar year 2010 and thereafter, with respect to health insurance premiums written in 2009 and thereafter.

Annual Fee on Clinical Laboratories

Current Law

Under current law, clinical laboratories are subject to Federal income and employment taxes. Current law does not impose an annual sector fee on clinical laboratories operating in the United States.

Annual Fee on Clinical Laboratories

Current Law

Under current law, clinical laboratories are subject to Federal income and employment taxes. Current law does not impose an annual sector fee on clinical laboratories operating in the United States.

[…]

Effective Date

The Chairman‘s Mark would be effective for calendar year 2010 and thereafter, with respect to covered domestic laboratory service revenue in 2009 and thereafter.

Repeal Business Deduction for Federal Subsidies for Certain Retiree Prescription Drug Plans

Current Law

In General. Sponsors of qualified retiree prescription drug plans are eligible for subsidy payments from the Secretary of Health and Human Services with respect to a portion of each qualified covered retiree‘s gross covered prescription drug costs (“qualified retiree prescription drug plan subsidy”).

[…]

Chairman’s Mark

The Chairman‘s Mark eliminates the rule that the exclusion for subsidy payments is not taken into account for purposes of determining whether a deduction is allowable with respect to retiree prescription drug expenses. Thus, under the Mark, the amount otherwise allowable as a deduction for retiree prescription drug expenses is reduced by the amount of the excludible subsidy payments received.

Effective Date

The Chairman‘s Mark is effective for taxable years beginning after December 31, 2010.

[All these fees being imposed on these mentioned organizations will not actually raise my taxes but could someone please explain to me how being required to pay these mandatory non-deductible fees is going to keep the cost from being passed on to the consumer?

That’s it.  That’s the Baucus Plan.  Pretty bad, isn’t it?  Keep those cards and letters to your Senators and Congressmen going.]

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  1. […] is bad news in that it keeps feet under Senator Baucus’ own plan to rule our health care system with penalties and no tort reform.  Doctors will be hit […]


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