Crosshairs on Those Not in the Government Plan

Within the framework of its not-quite-yet single payer plan, government has created taxes and fines to punish all health care providers and all consumers who are not yet covered under a government plan. 

We can start with the treatment of health care providers.   At just 1.5% increase per year, physicians are not the cause of galloping cost increases in health care.  Nevertheless, physicians caring for Medicare patients are likely to face a 27% reimbursement cut starting January 1.  Legislation suppressing the 27% is called a “doc fix,” but Congress is incapable of passing that due to fiscal cliff ill-will.  The need for a “doc fix” is caused by the arrogance of a class-warfare Congress that thought annual across the board 5% cuts in physician pay would be justified.  Rightly, more and more physicians are refusing to add new Medicare patients because with reimbursement already too low, a 27% cut pushes reimbursement down to a level that will impoverish them.

Hospitals account for 36% of medical spending.  However, 60% of admitted patients are under Medicare or Medicaid reimbursement, which is far below cost.  Under law, hospitals must provide unreimbursed care for the 6% of hospital admissions that are indigent.  Aggressive government-related cost shifting by 66% of admissions is forcing the remaining 34% of private-pay admissions to carry an outrageously high share of hospital costs. 

Consumer treatment will worsen starting in 2014.  Consumers who lack either a government health care plan or a private insurance plan will face fines.  The expected family fine is 1% of annual income, rising to 2.5% of family income in 2016 and beyond.   Paying the fine doesn’t obviate the need to pay for medical care needed.  On the flip side, consumers with incomes up to $88,000 are eligible for subsidies (at tax-payer cost) inducing them to join a government health plan.

Government treats employers as a nuisance.  Employers of 50 or more full-time-equivalents can be liable for penalties: either if they don’t offer health benefits to full-time employees and their dependents; or if they offer benefits that are unaffordable or that are below minimum standards.  Those penalties are expected to be $2,000/yr for each employee beyond the first 30. At the other extreme, employers who offer employees comprehensive or “Cadillac” health plans will be taxed $215 billion over the next 10 years.  

Taxed if you do and taxed if you don’t.  Large, financially sane companies such as Wal-Mart have “done the math” and concluded that paying a fine for not providing health care coverage in some cases is the right financial strategy.  It is consistent with Washington’s intention to remove employers from the shining pathway to “single payer.”

Alan Daley is a retired businessman living in Florida and following public policy issues from a consumer’s perspective.

 

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