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SK in CV
Participant[quote=meadandale]Another take on the “Medicine Cabinet Tax”:
And this tax change will almost certainly cost the health care system billions more dollars in unnecessary spending both to the government and private insurance plans. The Joint Committee on Taxation estimates that the tax hike will bring in $5 billion in revenues over ten years – itself a drop in the bucket when compared to the bill’s new trillion-dollar entitlement – but that estimate doesn’t take into account behavioral changes as a direct result of this provision.
OTC drugs are much cheaper those available for prescription, but they could now be more expensive to individual consumers given that prescription drugs would still be eligible for favored treatment in the tax plans, and that insurance companies would be mandated to cover many of them. Consequently, any time a consumer has the slightest headache, the financial incentive would often be to see a doctor and get a prescription rather than go to the store and get medicine off the shelf.
This could mean that billions will be wasted on the additional costs for prescription drugs in instances when OTC medicines could be just as safe and effective at treating the illness. A 2005 study in the American Journal of Managed Care found that the Food and Drug Administration’s clearing of antihistamines such as loratadine (Claritin) for over-the-counter sale saves about $4 billion a year in health care costs. Ironically, the liberals and Democrats who normally rail against big pharmaceutical companies are now creating a huge windfall the firms that make expensive prescription drugs by penalizing users of OTC medicines.
[/quote]
You know, I’ve read both the original senate bill and the reconciliation bills, and I don’t know where this claim comes from. Exchange plans must include (in general) the same kind of benefits that group plans currently have. Most group plans currently provide that where generic drugs are available, there will be no coverage for name brand drugs without meeting specific protocol. Same goes for OTC v. prescription drugs. Medicare Part D currently has similar coverage.
The claim that the “change will almost certainly cost the health care system billions more dollars in unnecessary spending both to the government and private insurance plans” is speculative at best. Not surprising, given the origin of the claim.
Participant[quote=meadandale]Another take on the “Medicine Cabinet Tax”:
And this tax change will almost certainly cost the health care system billions more dollars in unnecessary spending both to the government and private insurance plans. The Joint Committee on Taxation estimates that the tax hike will bring in $5 billion in revenues over ten years – itself a drop in the bucket when compared to the bill’s new trillion-dollar entitlement – but that estimate doesn’t take into account behavioral changes as a direct result of this provision.
OTC drugs are much cheaper those available for prescription, but they could now be more expensive to individual consumers given that prescription drugs would still be eligible for favored treatment in the tax plans, and that insurance companies would be mandated to cover many of them. Consequently, any time a consumer has the slightest headache, the financial incentive would often be to see a doctor and get a prescription rather than go to the store and get medicine off the shelf.
This could mean that billions will be wasted on the additional costs for prescription drugs in instances when OTC medicines could be just as safe and effective at treating the illness. A 2005 study in the American Journal of Managed Care found that the Food and Drug Administration’s clearing of antihistamines such as loratadine (Claritin) for over-the-counter sale saves about $4 billion a year in health care costs. Ironically, the liberals and Democrats who normally rail against big pharmaceutical companies are now creating a huge windfall the firms that make expensive prescription drugs by penalizing users of OTC medicines.
[/quote]
You know, I’ve read both the original senate bill and the reconciliation bills, and I don’t know where this claim comes from. Exchange plans must include (in general) the same kind of benefits that group plans currently have. Most group plans currently provide that where generic drugs are available, there will be no coverage for name brand drugs without meeting specific protocol. Same goes for OTC v. prescription drugs. Medicare Part D currently has similar coverage.
The claim that the “change will almost certainly cost the health care system billions more dollars in unnecessary spending both to the government and private insurance plans” is speculative at best. Not surprising, given the origin of the claim.
Participant[quote=meadandale]Another take on the “Medicine Cabinet Tax”:
And this tax change will almost certainly cost the health care system billions more dollars in unnecessary spending both to the government and private insurance plans. The Joint Committee on Taxation estimates that the tax hike will bring in $5 billion in revenues over ten years – itself a drop in the bucket when compared to the bill’s new trillion-dollar entitlement – but that estimate doesn’t take into account behavioral changes as a direct result of this provision.
OTC drugs are much cheaper those available for prescription, but they could now be more expensive to individual consumers given that prescription drugs would still be eligible for favored treatment in the tax plans, and that insurance companies would be mandated to cover many of them. Consequently, any time a consumer has the slightest headache, the financial incentive would often be to see a doctor and get a prescription rather than go to the store and get medicine off the shelf.
This could mean that billions will be wasted on the additional costs for prescription drugs in instances when OTC medicines could be just as safe and effective at treating the illness. A 2005 study in the American Journal of Managed Care found that the Food and Drug Administration’s clearing of antihistamines such as loratadine (Claritin) for over-the-counter sale saves about $4 billion a year in health care costs. Ironically, the liberals and Democrats who normally rail against big pharmaceutical companies are now creating a huge windfall the firms that make expensive prescription drugs by penalizing users of OTC medicines.
[/quote]
You know, I’ve read both the original senate bill and the reconciliation bills, and I don’t know where this claim comes from. Exchange plans must include (in general) the same kind of benefits that group plans currently have. Most group plans currently provide that where generic drugs are available, there will be no coverage for name brand drugs without meeting specific protocol. Same goes for OTC v. prescription drugs. Medicare Part D currently has similar coverage.
The claim that the “change will almost certainly cost the health care system billions more dollars in unnecessary spending both to the government and private insurance plans” is speculative at best. Not surprising, given the origin of the claim.
Participant[quote=captcha]Are the limits auto-adjusted for inflation every year?[/quote]
Yes, they are. And if the CBO’s inflation estimate is below actual, the initial rates will also be adjusted. The excise tax doesn’t kick in until 2018.
Participant[quote=captcha]Are the limits auto-adjusted for inflation every year?[/quote]
Yes, they are. And if the CBO’s inflation estimate is below actual, the initial rates will also be adjusted. The excise tax doesn’t kick in until 2018.
Participant[quote=captcha]Are the limits auto-adjusted for inflation every year?[/quote]
Yes, they are. And if the CBO’s inflation estimate is below actual, the initial rates will also be adjusted. The excise tax doesn’t kick in until 2018.
Participant[quote=captcha]Are the limits auto-adjusted for inflation every year?[/quote]
Yes, they are. And if the CBO’s inflation estimate is below actual, the initial rates will also be adjusted. The excise tax doesn’t kick in until 2018.
Participant[quote=captcha]Are the limits auto-adjusted for inflation every year?[/quote]
Yes, they are. And if the CBO’s inflation estimate is below actual, the initial rates will also be adjusted. The excise tax doesn’t kick in until 2018.
Participant[quote=CONCHO]Thanks for the explanation SK. So this means that if you’re currently paying $11200/year you will pay $11867/year under this new system? Many people with any sort of serious pre-existing condition will get hit by this, $1000/mo premiums are not uncommon at all.
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I suspect the number of people hit by the excise tax will be quite small. I don’t know very much about insurance premiums in other states, but in California, a $1,000 a month policy for a single person is pretty damn expensive. I have a bill here in front of me for a 64 year old man (he turns 65 next month), and the premium, including his 21 year old son is $942 a month. It’s an individual policy, with the largest preferred provider network in the state, a $500 annual deductible and $10 copays for dr. visits. It’s damn good coverage, close to the most expensive that Anthem Blue Cross offers for a PPO.
Aetna’s most expensive small group HMO (with a $10 copay) for 60-64 year olds has annual premiums of $10,872. The $15 copay (which I pay for my staff) is $10,212 for that same age group. The annual premiums would go up by about $8 a year. Only for the oldest age bracket.
Participant[quote=CONCHO]Thanks for the explanation SK. So this means that if you’re currently paying $11200/year you will pay $11867/year under this new system? Many people with any sort of serious pre-existing condition will get hit by this, $1000/mo premiums are not uncommon at all.
[/quote]
I suspect the number of people hit by the excise tax will be quite small. I don’t know very much about insurance premiums in other states, but in California, a $1,000 a month policy for a single person is pretty damn expensive. I have a bill here in front of me for a 64 year old man (he turns 65 next month), and the premium, including his 21 year old son is $942 a month. It’s an individual policy, with the largest preferred provider network in the state, a $500 annual deductible and $10 copays for dr. visits. It’s damn good coverage, close to the most expensive that Anthem Blue Cross offers for a PPO.
Aetna’s most expensive small group HMO (with a $10 copay) for 60-64 year olds has annual premiums of $10,872. The $15 copay (which I pay for my staff) is $10,212 for that same age group. The annual premiums would go up by about $8 a year. Only for the oldest age bracket.
Participant[quote=CONCHO]Thanks for the explanation SK. So this means that if you’re currently paying $11200/year you will pay $11867/year under this new system? Many people with any sort of serious pre-existing condition will get hit by this, $1000/mo premiums are not uncommon at all.
[/quote]
I suspect the number of people hit by the excise tax will be quite small. I don’t know very much about insurance premiums in other states, but in California, a $1,000 a month policy for a single person is pretty damn expensive. I have a bill here in front of me for a 64 year old man (he turns 65 next month), and the premium, including his 21 year old son is $942 a month. It’s an individual policy, with the largest preferred provider network in the state, a $500 annual deductible and $10 copays for dr. visits. It’s damn good coverage, close to the most expensive that Anthem Blue Cross offers for a PPO.
Aetna’s most expensive small group HMO (with a $10 copay) for 60-64 year olds has annual premiums of $10,872. The $15 copay (which I pay for my staff) is $10,212 for that same age group. The annual premiums would go up by about $8 a year. Only for the oldest age bracket.
Participant[quote=CONCHO]Thanks for the explanation SK. So this means that if you’re currently paying $11200/year you will pay $11867/year under this new system? Many people with any sort of serious pre-existing condition will get hit by this, $1000/mo premiums are not uncommon at all.
[/quote]
I suspect the number of people hit by the excise tax will be quite small. I don’t know very much about insurance premiums in other states, but in California, a $1,000 a month policy for a single person is pretty damn expensive. I have a bill here in front of me for a 64 year old man (he turns 65 next month), and the premium, including his 21 year old son is $942 a month. It’s an individual policy, with the largest preferred provider network in the state, a $500 annual deductible and $10 copays for dr. visits. It’s damn good coverage, close to the most expensive that Anthem Blue Cross offers for a PPO.
Aetna’s most expensive small group HMO (with a $10 copay) for 60-64 year olds has annual premiums of $10,872. The $15 copay (which I pay for my staff) is $10,212 for that same age group. The annual premiums would go up by about $8 a year. Only for the oldest age bracket.
Participant[quote=CONCHO]Thanks for the explanation SK. So this means that if you’re currently paying $11200/year you will pay $11867/year under this new system? Many people with any sort of serious pre-existing condition will get hit by this, $1000/mo premiums are not uncommon at all.
[/quote]
I suspect the number of people hit by the excise tax will be quite small. I don’t know very much about insurance premiums in other states, but in California, a $1,000 a month policy for a single person is pretty damn expensive. I have a bill here in front of me for a 64 year old man (he turns 65 next month), and the premium, including his 21 year old son is $942 a month. It’s an individual policy, with the largest preferred provider network in the state, a $500 annual deductible and $10 copays for dr. visits. It’s damn good coverage, close to the most expensive that Anthem Blue Cross offers for a PPO.
Aetna’s most expensive small group HMO (with a $10 copay) for 60-64 year olds has annual premiums of $10,872. The $15 copay (which I pay for my staff) is $10,212 for that same age group. The annual premiums would go up by about $8 a year. Only for the oldest age bracket.
ParticipantSloppy reporting
[quote=CONCHO]The one that really confuses me is this one:
A new 40% excise tax, beginning in 2013, on high-cost health plans, defined as those providing coverage in excess of $8,500 for individuals and $23,000 for families. The House’s package of modifications includes higher threshold amounts and an initial effective date of 2018.
What does that even mean to provide coverage in excess of some amount? Does that mean you are covered for more than $8500/year? Seems pretty low to me.[/quote]
Besides the reporting using only the original Senate bill, and not the reconciliation bill, which will be passed and signed into law later this week, it changes a few words which also changes the entire thrust of the law.
The reconciliation bill changes the amounts to $10,200 and $27,500. The tax has nothing to do with benefits, only premiums. Insurance companies will pay a 40% excise tax on the amount of premiums that exceed those amounts. For an individual, a policy that costs $11,200 a year would be subject to a $400 excise tax, to be paid by the insurance company. Those taxes will be built into the premium cost, so for every premium dollar over the limit, the insurance company will actually raise their rates by roughly 67% to cover the tax. (A policy with annual premiums of $11,200 would be priced at $11,867. 40% excise tax on the amount over $10,200, or $1,667 would be $667. Insurance company ends up with $1,000 more in net premiums.)
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