[Originally posted March 22 and updated March 24] -- I would love to go into the politics of the health care legislation that the House passed by such a narrow margin and that President Obama subsequently signed into law, but I’ll refrain. Instead, I want to focus on what this new legislation might mean for those in the surveying, mapping and related professions.
First the good news. From 2011 to 2013, a temporary sliding scale tax credit will help small businesses (those with fewer than 25 employees) pay for up to 35 percent of employer costs for employers who cover 50 percent or more of the cost of a health plan for their employees, as long as employee wages average $40,000 or less. Beginning in 2014, the credit will remain available to businesses that purchase insurance through the state health benefit exchanges that are mandated by the legislation.
The bad news is that the full credit will only be available to businesses with 10 or fewer workers whose average wages are less than $20,000, and the credit will only be available to a firm for two years.
More bad news: Firms with more than 50 employees will have to pay a “free rider” tax penalty on any employees who receive a subsidy in the health benefit exchange. Of course, if this penalty costs less than the mandated health care coverage, which is likely based on current estimates, then more employers may decide to opt out of providing health care coverage and simply pay the tax. In either case, higher fees mean more pressure on numerous businesses that are already struggling to make payroll.
For sole proprietors and individuals buying their own coverage, the legislation appears positive at first glance. Within six months of enactment, which is planned for Jan. 1, 2014, all health insurance plans offered on the individual and small group market will be required to cover “essential health benefits” such as emergency services, hospitalization, physician services, outpatient services, maternity and newborn care, pediatric services (including dental and vision), medical/surgical care, prescription drugs, and mental health and substance abuse services. For many individuals, this is likely far more than what their current plan covers. There’s just one catch-it isn’t free. Individuals will be forced into higher-cost health plans that meet the new mandates. Sliding scale subsidies might help make the higher-cost plans more affordable for those who qualify, but many won’t qualify due to the income limits. Of course, these individuals can always opt out and pay the tax penalty.
What’s more, we can expect the cost for prescription drugs, medical devices (even such minor items as toothbrushes), and health insurance to rise immediately under the new legislation. Beginning Jan. 1, 2010, annual fees of $2.2 billion and $2 billion, respectively, will be imposed on manufacturers of prescription drugs and medical devices, and annual fees of $6.7 billion will be levied on health insurance companies. Who do you think will really pay these added fees?
No one is denying that our health care system has serious problems. My family and many others are struggling to afford rising insurance premiums and ever-increasing medical costs. But I’m having a difficult time understanding how the new legislation resolves these problems.
So much for keeping the politics out of it. My bias is clear. But I want to hear what you think. What will the new health care legislation mean for you and your business? Do you believe passage of the health care reform bill is a positive move for those in the surveying and mapping professions? Please share your comments below.