Health Care Reform from two points of view

The pro­posed Health Care leg­is­la­tion will affect new busi­ness own­ers in two ways. As a small busi­ness owner, we face new require­ments so the first excerpt we offer you sum­ma­rizes these and pro­vides a link to down­load the entire report. The sec­ond impact is how it will affect us as indi­vid­u­als, and that is the last seg­ment below.

How will the new health care bill affect my small business?

from White House Exec­u­tive Summary

• Health care reform as envi­sioned in cur­rent draft leg­is­la­tion would reduce the cur­rent bur­dens on small firms and their workers.
• Small busi­nesses that meet cer­tain cri­te­ria would be able to pur­chase health insur­ance through an “insur­ance exchange” – allowing them to choose among a mul­ti­tude of plans that would pro­vide bet­ter cov­er­age at lower costs than they could find in the cur­rent small group market.
• Many small busi­nesses that pro­vide health insur­ance for their employ­ees would receive a small busi­ness tax credit to alle­vi­ate their dis­pro­por­tion­ately higher costs and encour­age cov­er­age. The tax credit would be tar­geted to those firms with employ­ees whose aver­age wages fall below a cer­tain threshold.
• The cur­rent reform options include finan­cial incen­tives for medium– and large-​sized firms to pro­vide health insur­ance cov­er­age through so-​called “pay-​or-​play” pro­vi­sions. Firms with pay­rolls or employ­ment lev­els below a cer­tain thresh­old, which would include the vast major­ity of small busi­nesses, would be exempt from the pay-​or-​play provisions.
• The cre­ation of an insur­ance exchange would also pro­vide bet­ter and lower-​cost options for work­ers in small busi­nesses that do not offer health insur­ance. Low-​income indi­vid­u­als and fam­i­lies would receive slid­ing scale sub­si­dies to help them pur­chase insur­ance. Addi­tion­ally, health insur­ers would not be allowed to screen poten­tial enrollees for pre-​existing conditions.
• The pro­posed reforms could help spur entre­pre­neur­ial activ­ity by increas­ing the incen­tives for tal­ented Amer­i­cans to launch their own com­pa­nies, and could increase the pool of work­ers will­ing to work at small firms. Fur­ther, suc­cess­ful reform would reduce the phe­nom­e­non of “job lock,” in which work­ers are reluc­tant to leave a job with employer-​sponsored health insur­ance out of fear that they will not be able to find afford­able cov­er­age. Small firms that are unable to pro­vide health insur­ance for their employ­ees bear the great­est cost of this phenomenon.
• Reduc­tions in absen­teeism and improve­ments in worker pro­duc­tiv­ity result­ing from bet­ter health out­comes because of expanded cov­er­age would par­tic­u­larly ben­e­fit small businesses.

To con­tinue read­ing, down­load the full report as a print­able PDF

How will Health-​care reform affect me?

from Newsweek, week of 1-​4-​2010

It’s a long way from law (a con­fer­ence com­mit­tee will work out the dif­fer­ences between the House and the Sen­ate ver­sions), but House nego­tia­tors are expected to largely acqui­esce to the Sen­ate, where Democ­rats can’t afford to lose a sin­gle vote. Here’s what to expect:

• You will be required to buy health insur­ance
  You must file proof of insur­ance with your tax return in 2014 — or pay a $95 penalty to the IRS. The fine jumps to $350 in 2015 and $750 in 2016.
• Exchanges will pro­vide afford­able plans
  Indi­vid­u­als and small busi­nesses can buy insur­ance through government-​regulated health-​insurance exchanges. Insur­ers must pro­vide cov­er­age that in 2010 would cost no more than $5,590 for a family.
• You can­not be denied cov­er­age based on a pre-​existing con­di­tion
  Until this reg­u­la­tion goes into effect in 2014, the gov­ern­ment will spend $5 bil­lion to sub­si­dize a high-​risk pool for those with pre-​existing con­di­tions who have been unin­sured for more than six months.
• Med­ic­aid will serve more peo­ple
  Any­one under 65 who makes less than $14,440 a year will be eli­gi­ble. (Cur­rently, the pro­gram is open only to cer­tain cat­e­gories cat­e­gories of those with low income, like preg­nant women and peo­ple with disabilities.)
• Costs will be capped
  Out-​of-​pocket expenses will be capped based on income. A fam­ily of three earn­ing $73,240 in 2009, for instance, would be required to pay no more than $7,733.
• The gov­ern­ment may help you pay your pre­mi­ums
  Peo­ple earn­ing up to $43,320 (up to $88,200 for a fam­ily of four) will receive cred­its through­out the year to sub­si­dize premiums.
• Medicare drug ben­e­fits will improve
  Drug man­u­fac­tur­ers must dis­count brand-​name drugs by 50 per­cent for those spend­ing between $2,700 and $6,154 annu­ally on pre­scrip­tions (aka, the Medicare cov­er­age gap).
• Your kids can stay on your insur­ance longer
  Insur­ers typ­i­cally cut off depen­dents upon the grad­u­a­tion from high school or col­lege. The age would be extended to 26.
• Cadil­lac plans may be elim­i­nated
  That por­tion of a pre­mium exceed­ing $8,500 for an indi­vid­ual ($23,000 for a fam­ily) will be sub­ject to a 40 per­cent tax paid by the insurer, dis­cour­ag­ing such plans.

Which of these points do you see affect­ing your busi­ness or per­sonal finances in either pos­i­tive or neg­a­tive ways?

Will the new leg­is­la­tion, if passed as cur­rently pro­posed, influ­ence your deci­sion to open a new busi­ness?