Just wanted to give people a heads up that the Senate Finance Committee released its report on how to pay for healthcare reform today. Here's the link:
http://finance.senate.gov/...
Among the options proposed, the Senate Finance Committee suggests reducing Medicare benefits, taxing employee health care benefits, eliminating flexible spending accounts and taxing soda etc.
First things first, pages 7-15 discuss adjusting payment of Medicare/Medicaid providers and medical device suppliers. There's a lot of jargon which I don't understand. If you can understand it, go for it and explain it in this diary. That will be helpful. Thanks.
Second, on page 16-19, the Committee discusses modifying beneficiary contributions to Medicare. Note these "modifications" are Medicare cuts to beneficiaries. Here's the option for making Medicare patients with supplemental insurance more cognizant of the costs of Medicare on page 17:
- Introduce an out-of-pocket maximum on beneficiary cost sharing for all Part A and B services;
- Replace the current complicated mix of cost-sharing provisions with consistent cost sharing and a combined annual deductible covering all Part A and B services;
- Modify Medigap to require some cost sharing for services along with catastrophic protection (e.g., prohibit Medigap policies from paying for the first $100 of a beneficiary’s cost-sharing liabilities (first-dollar coverage) and limit coverage to 95% of the next $5,000 in Medicare cost sharing);
- Impose nominal cost sharing in Medigap, e.g., $5-10 copayments for primary care visits and $20-$25 copayments for specialists; and
- Index all cost sharing to the growth rate in average Medicare costs.
I'm sure that Medicare recipients (with medigap insurance) will understand the differences but I know that my dad who has medigap doesn't pay anything for doctor visits so this "cost-sharing" bit might hit someone like him.
The Committee also talks about means-testing Medicare Part D prescription drug program on page 18. Beneficiaries with higher incomes would have higher premiums for the Part D program.
Third, starting on page 20, the Senate Finance Committee begins discussing ways to impose income taxes on employer-provided healthcare benefits:
A number of options could be considered that would limit the value of employer-provided health coverage that is excludible from gross income. The limit could be based on the value of the plan or the income of the insured, or the limit could be a combination of both. Alternatively, the limit could be tied to a percentage of the value of the employer-provided health coverage.
On page 21, the Committee talks about the practical effects of how the imposition of the tax would work:
In order to change the exclusion for employer-provided health coverage under any of these options, the value of employer-provided health insurance coverage for an employee's taxable year would need to be determined; then depending on the option and how it applied to an
employee, any amount of the value above a limit (or the full amount for any taxpayer to whom the exclusion no longer applies, if any) would be includable in the employee's gross income as wages. The value of employer-provided health insurance coverage could be determined as the
employer-provided portion of the applicable premiums currently excludible for the taxable year for the employee determined under the rules for COBRA continuation coverage. For example, if the exclusion were limited to an amount equal to a percentage of the premium for health
coverage obtained through the employer, the premium also would be the applicable premium determined under the rules for COBRA continuation coverage for the employee, including any portion paid for by the employee.
Warning if you're on the bubble in terms of the marginal rate, then you could be kicked up to the next marginal rate on your income taxes. Just saying...
Plus, I still can't tell from this statement whether FICA taxes would apply or not.
Next, on page 21, the Committee discusses whether to reduce or repeal the 7.5% itemized deduction for medical expenses.
On page 24, the Senate Finance Committee discusses limitations on how much money an individual can deduct under a health savings account.
On page 25, the Committee talks about either reducing or eliminating the amount of money set aside in a flexible spending account.
Also on page 26, they propose excluding nonprescription drugs from being excluded from income under health savings accounts and flexible spending accounts.
From page 26-32, the Committee talks about modifying the student exemption for FICA taxes. I don't understand what they're talking about. If someone can explain it in the comments, that'll be great.
Next, the Finance Committee would impose Medicare taxes on state and local employees. See page 33.
In addition, they are considering reducing or eliminating tax subsidies to charity hospitals. See page 35-36.
In section 4 of the report, the Senate Committee discusses the imposition of "lifestyle related revenue raisers."
First up, the Finance committee considers an alcohol excise tax on page 37-38. By the way excise=sales tax.
Second, the Committee discusses the imposition of an excise tax on sugar-sweetened beverages on page 38.
Section 5 provides a cursory glance of the White House's proposals for raising revenue which include reducing the charity and mortgage deductions for couples making over $250,000; closing tax loopholes etc.
Hope this brief overview of the Senate Finance Report was helpful....