The Torch, Spring/Summer 2010

10 TORCH | Spring–Summer 2010 face fines equal to 2.5 percent of household income or $695, whichever is greater. Small businesses will be hit especially hard by some of the new taxes. For example, large self-insured companies are exempt from the new health insurance tax, so the vast majority of the $60 billion tax will fall on the health plans purchased by small businesses. Also, the higher Medicare payroll taxes will likely hit businesses employing between 20 and 200 workers, or one- quarter of the American workforce. Finally, economists believe the bill’s new 3.8 percent tax on investment income will lead to dramatically higher marginal tax rates and less capital for businesses, which harms job creation. What immediate changes will we notice? The new coverage provisions do not begin until 2014, but a few provisions will take effect immediately. These reforms include a new high- risk pool program to help provide coverage for individuals with pre-existing conditions, a $250 subsidy for seniors with high prescription drug costs, the small-business tax credit, the mandate that insurance companies cover young adults up to age 26 on their parents’ policies, the prohibition of insurance discrimination based on salary or gender, and the elimination of lifetime limits on coverage. In addition to these benefits, many of the new taxes and Medicare program cuts take effect long before the major spending begins in 2014. For example, seniors enrolled in Medicare Advantage (the private plan alternative to traditional Medicare) will start seeing benefit cuts in 2011. Since the final legislation did not include a “fix” to the way the Medicare program reimburses physicians, which would have cost an additional $208 billion, all physicians serving Medicare patients will face a 21 percent reimbursement cut. What changes will occur in the long term? In 2014, all states will be required to expand their Medicaid programs to all individuals making up to 133 percent of the FPL. That same year, the new subsidies will begin for the purchase of private health insurance. In 2018, the new 40 percent tax on “Cadillac” health plans will take effect. And by 2019, the Congressional Budget Office estimates that 94 percent of Americans will have health insurance. Does the legislation protect the moral rights of health care professionals? The final law did not contain comprehensive legislative safeguards to fully protect health care providers who choose not to provide certain procedures on moral grounds. Without these safeguards, a physician who refuses to perform abortions, for example, could be discriminated against. Is additional legislation anticipated? The dire federal budget situation will require action in the years to come. Since the spending on new subsidies does not begin until 2014, it is possible the new spending will be scaled back as part of a broader effort to balance the federal budget. The reality is that the nation simply cannot continue on Washington’s current spending path. The new law also did not address Medicare solvency since the program savings from the $500 billion in cuts were used to create new spending obligations. The program’s impending bankruptcy date of 2016 will require Congressional action in order to secure seniors’ health benefits. Unlike previous reform attempts, what made this one successful? The 2008 presidential election placed a Democrat in the White House and gave Democrats control of both chambers of Congress, including a supermajority in the Senate. Seeking to avoid the 1993–94 fiasco of the Clinton proposal, the Obama White House encouraged Congress to write its own health care bill, though this took more than a year. Agreement among Democrats finally came after deals with special interest groups, such as the pharmaceutical industry, and favors for specific lawmakers, such as the Cornhusker Kickback and the Louisiana Purchase. After the election of Sen. Scott Brown from