What you might not know about the Affordable Care Act but need to learn (Updated)

Updated

What you might not know about the Affordable Care Act but need to learn

The so-called Affordable Care Act (commonly referred to as Obamacare) created several new taxes, penalties and bureaucracies. Below are just a few.

 

Some of the new BUREAUCRACIES and programs:

 

1. National Prevention Council—The council “comprises 17 Federal departments, agencies and offices and is chaired by the Surgeon General.”  It has released a “National Prevention Strategy” and a “National Prevention Council Action Plan” that “highlights important opportunities that the National Prevention Council and its diverse member departments—representing sectors such as housing, transportation, education, environment, and defense—are creating to ensure the health, well-being, and resilience of the American people.” U.S. Department of Health & Human Services, http://www.surgeongeneral.gov/initiatives/prevention/about/index.html.  42 USCS § 300u-10.

 

2. National Center for Health Care Workforce Analysis—The Center is in addition to the existing National Health Care Workforce Commission. 42 USCS § 394n. 

 

3. Shared Decisionmaking Resource Centers— including grants to fund Shared Decisionmaking Resource Centers.—According to the federal statute, the purpose of the Program is “to facilitate collaborative processes between patients, caregivers or authorized representatives, and clinicians that engages the patient, caregiver or authorized representative in decisionmaking, provides patients, caregivers or authorized representatives with information about trade-offs among treatment options, and facilitates the incorporation of patient preferences and values into the medical plan.” 42 USCS § 299b-36(e)(2).

 

4. Center for Medicaid & Medicare Innovation—According to the federal statute, “There is created within the Centers for Medicare & Medicaid Services a Center for Medicare and Medicaid Innovation (in this section referred to as the ‘CMI’) to carry out the duties described in this section. The purpose of the CMI is to test innovative payment and service delivery models to reduce program expenditures under the applicable titles while preserving or enhancing the quality of care furnished to individuals under such titles.” 42 USCS § 1315a(a).

 

5. Elder Justice Coordinating Council—This council will make recommendations to the Secretary of Health and Human services relating to crimes against the elderly. 42 USCS § 1397k.

 

6. Oral Healthcare Prevention Education Campaign—This program will remind people about the importance of oral health care, including teeth brushing. 42 USCS § 280k.

 

7. Interagency Working Group on Health Care Quality—The President will appoint members of this Group. The Group will include senior level representatives from at least 23 federal departments or agencies including the Coast Guard. 42 USCS § 280j.

 

8. Federal Coordinated Health Care Office—According to the federal law, “The purpose of the Federal Coordinated Health Care Office is to bring together officers and employees of the Medicare and Medicaid programs at the Centers for Medicare & Medicaid Services.” 42 USCS § 1315b.

 

9. Medicaid and CHIP Payment and Access Commission (a.k.a. “MACPAC”)—This group was originally created in the CHIP program but was expanded and funded by the Affordable Care Act. MACPAC is tasked with reviewing state and federal Medicaid and CHIP access and payment policies, 42 USCS § 1396(a).

 

10. Independent offices of health insurance consumer assistance (various offices to be set up by the states but funded by the federal government)—Funding for the first fiscal year was $30,000,000. 42 USCS § 300gg-93(b)(1).

 

11. Independent Medicare Advisory Board (a.k.a. Independent Payment Advisory Board)—This Board is supposed to develop recommendations to reduce Medicare spending. Proposals will be given first to the President who will then have only 2 days to consider the recommendations before he must submit the Board’s proposals to Congress. The federal law also limits debate in Congress when the proposal gets there. 42 USCS § 1395kkk(a).

 

12. Personal Responsibility Education Programs—These programs will teach adolescents about abstinence and contraception. The programs will also teach subjects on “adulthood preparation” including: “financial literacy,” “stress management,” “job-seeking” skills, and “interpersonal skills.” The federal law appropriates $75,000,000 to fund these programs for each of fiscal years 2010 through 2014. 42 USCS § 713.

 

Some of the new TAXES and PENALTIES:

 

1. Tax on Charitable Hospitals—$50,000 per hospital tax for any hospital failing to meet new community health needs assessment and financial assistance rules. 26 USCS §4959.

 

2. Medicare payroll tax hike—Currently, the Medicare payroll tax is 2.9% on all wages -- with the worker and his employer each paying 1.45%.  Under the new law, starting in 2013, high-income individuals will pay another 0.9 percentage points on earned income over $200,000 ($250,000 if married). 26 USCS § 3101(b).

 

3. New Medicare payroll tax on investment income—The same people subject to the Medicare payroll tax hike are now subject to a totally new Medicare payroll tax. The federal law imposes a 3.8% Medicare payroll tax on investment income like capital gains and dividends. This is the first time a payroll tax has been imposed on investment income. 26 USCS § 1411.

 

4. 40% excise tax on insurance plans costing more than $10,000 a year for individuals or $27,000 a year for a family. These are often called “Cadillac” insurance plans.  26 USCS § 4980I.

 

5. Medicine Cabinet Tax—Health Savings Accounts (HSAs), Flexible Savings Accounts (FSAs), and Health Reimbursement accounts (HRAs) can no longer be used for over-the-counter, nonprescription medicine (except for insulin). HSAs 26 USCS § 223(d)(2); FSAs/HRAs 26 USCS § 106.

 

6. Health Savings Account withdrawal tax has DOUBLED from 10% to 20% for non-medical withdrawal. Tax rates for early withdrawal of other accounts like IRAs remains at 10%. 26 USCS § 9004.

 

8. 10% tax on indoor tanning. 26 USCS § 5000B.

 

9. Medical device tax of 2.3% on each medical device sold in the U.S. except those costing less than $100. 26 USCS § 4191.

 

10. Employer mandate--The employer mandate, which is scheduled to take effect in 2014, will apply to employers with 50 or more employees. If an employer fails to provide "qualifying health insurance" the employer will have to pay a per-employee excise tax of $2000 per employee ($3000 if an employee receives coverage through an exchange). If the employer has a waiting period to get into the plan, there is an additional tax of $400-$600. 26 USCS § 4980H(a) and (c)(1)-(2). 

 

11. Individual mandate—Starting in 2014, individuals who choose not to purchase a “qualifying” health insurance plan will have to pay a tax equal to 2.5% of their adjusted gross income. 26 USCS § 5000A(b)(3)-(c).