Now that we have the Senate health care reform bill before us---H.R. 3590, the Patient Protection and Affordable Care Act---I hope you take the opportunity to read it and figure out what this 2,074-page bill will mean for you and your family. The bill will cost two and a half trillion dollars, with lower and middle-income earners paying for much of the burden, but the American people might be surprised to see that the sick and elderly will also end up bearing much of the burden through higher costs and reduced benefits.
This bill contains almost half a trillion dollars in Medicare cuts. While a financially successful and healthy young American might not be directly and immediately affected by these Medicare cuts, seniors on Medicare Advantage will see a reduction in current benefits. The Chief Actuary at the Centers for Medicare and Medicaid Services estimates one-third of current enrollees would lose Medicare Advantage coverage altogether. This bill also cuts Medicare funding to hospitals, nursing homes, hospices and home health services.
The bill also contains a $20 billion tax on the medical device industry, which the nonpartisan Joint Committee on Taxation (JCT) says will be passed on to consumers. That means seniors with heart conditions will pay higher prices for pacemakers, and those with illnesses and disabilities requiring ventilators, powered wheelchairs, dentures, prosthetics or other devices will face higher medical costs.
The bill adds a $22 billion tax on the pharmaceutical industry, which the JCT also says will be passed on to the consumer. Healthy Americans probably won’t be immediately affected by this provision, but the millions of Americans who must take regular medication will see higher costs for their prescription and over-the-counter drugs.
The bill will also raise the current floor for allowable deductions for medical expenses from 7.5 percent of Adjusted Gross Income (AGI) to 10 percent. Those affected by this tax increase are those who already have relatively high medical expenses. This $15.2 billion tax increase will fall directly on the backs of those with chronic or catastrophic health conditions.
It also doubles the tax penalty on nonqualified distributions from Health Savings Accounts (HSA). If, in difficult economic times, a family has a financial emergency, such as a catastrophic illness or job loss, they might have no alternative but to dip into their HSA to cover non-medical expenses.
The many broad-based tax increases in this bill mean that those who are young and healthy will be negatively affected, but the most vulnerable among us will bear most of the financial burden of this bill. It calls to mind the words on the base of the Statue of Liberty. But, instead of calling the tired and the poor to a land of freedom and opportunity, this bill calls the tired, the poor, the elderly and the infirm to pony up billions in higher taxes, higher costs and reduced benefits to pay for a massive expansion of the federal government. For these millions of sick and elderly Americans, this bill could accurately be called the Statute of Misery.
For all Americans, this bill also includes a bit of additional misery. According to the Congressional Budget Office (CBO), the IRS would require $5 to 10 billion in additional funding over the next 10 years to carry out its new responsibilities. Individuals, families and small businesses don’t want higher taxes. We need to start over with step-by-step reforms that will make a difference for all Americans. For more on the health care debate and to read the full bill, please go to http://crapo.senate.gov.
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