Saturday, November 10, 2012

Timeline of Major Provisions in the Obamacare Package

Taken from the Ways and Means Committee


 •2‐year tax credit (total cap of $1B) for new chronic disease therapy investments
•Medicare cuts to hospitals begin (long‐term care (7/1/09) and inpatient and
2009 rehabilitation facilities (FY10))


•States and Federal officials review premium increases
•FDA authorized to approve "follow‐on" biologics
•Increase brand name pharmaceutical Medicaid rebate (from 15.1% to 23.1%)
•Medicare payments to physicians in  primarily rural areas increase (2 years)
•Deny "black liquor" eligibility for cellulosic biofuel producers credit
•Tax credits provided to certain small employers  for health care‐related expenses
•Increase adoption tax incentives for 2 years
•Codify economic substance doctrine and impose penalties for underpayments
(transactions on/after 3/23/10)
•Provide income exclusion for specified Indian tribe health benefits provided after
•Temporary high‐risk pool and high‐cost union retiree reinsurance ($5 B each for 3.5
years) (6/23/10)
•Impose 10% tax on indoor UV tanning (7/1/10)
•Medicare cuts to inpatient psych hospitals (7/1/10)
•Prohibits lifetime and annual benefit spending limits (plan years beginning 9/23/10)
•Prohibits non‐group plans from canceling coverage (rescissions) (plan years
beginning 9/23/10)
•Requires plans to cover, at no charge, most preventive care (plan years beginning
•Allows dependents to stay on parents’ policies through age 26 (plan years
beginning 9/23/10)
•Provides limited protections to children with pre‐existing conditions (plan years
beginning 9/23/10)
•Hospitals  in "Frontier States" (ND, MT, WY, SD, UT ) receive higher Medicare
payments (FY11)
•Hospitals in “low‐cost” areas receive higher Medicare payments for 2 yrs ($400
million, FY11)


•Medicare Advantage cuts begin
•No longer allowed to use FSA, HSA, HRA, Archer MSA distributions for over‐the‐
counter medicines
•Medicare cuts to home health begin
•Wealthier seniors  ($85k/$170k) begin paying higher Part D premiums (not indexed
for inflation in Parts B/D)
•Medicare reimbursement cuts when seniors use diagnostic imaging like MRIs, CT
scans, etc.
•Medicare cuts begin to  ambulance services, ASCs, diagnostic labs, and durable
medical equipment
•Impose new annual  tax on brand name pharmaceutical companies
•Americans begin paying premiums for federal long‐term care insurance (CLASS Act)
•Health plans required to spend a minimum of 80% of premiums on medical claims
•Physicians in "Frontier States" (ND, MT, WY, SD, UT ) receive higher Medicare
•Prohibition on Medicare payments to new physician‐owned hospitals
•Penalties for non‐qualified HSA and Archer MSA distributions double (to 20%)
•Seniors prohibited from purchasing power wheelchairs unless they first rent for 13
•Brand name drug companies begin providing 50% discount in the Part D “donut
•10% Medicare bonus payment for primary care and general surgery (5 years)
•Employers required to report value of health benefits on W‐2
•Steps towards health insurance administrative simplification (reduced paperwork,
etc) begins (5 yr process)
•Additional funding for community health centers (5 years)
•Seniors who hit Part D “donut hole "in 2010 receive $250 check (3/15/11)
•New Medicare cuts  to  long‐term care hospitals begin (7/1/11)
•Additional Medicare cuts to hospitals and cuts to nursing homes and inpatient
rehab facilities begin (FY12)
•New tax on all private health insurance policies to pay for comp. eff. research (plan
years  beginning FY12)


•Medicare cuts to dialysis treatment begins
•Require information reporting on payments to corporations
•Medicare to reduce  spending by using an HMO‐like coordinated care  model
(Accountable Care Organizations)
•Medicare Advantage plans with a 4 or 5 star rating receive a quality bonus payment
•New Medicare cuts to inpatient psych hospitals (7/1/12)
•Hospital pay‐for‐quality program begins  (FY13)
•Medicare cuts to hospitals with high readmission rates begin (FY13)
•Medicare cuts to hospice begin (FY13)


•Impose $2,500 annual cap on FSA contributions (indexed to CPI)
•Increase Medicare wage tax by 0.9% and impose a new 3.8% tax on unearned , non‐
active business income for those earning over $200k/$250k (not indexed to inflation)
•Generally increases (7.5% to 10%) threshold at which medical expenses, as a % of
income, can be deductible
•Eliminate deduction for Part D retiree drug subsidy employers receive
•Impose 2.3% excise tax on medical devices
•Medicare cuts to hospitals who treat low‐income seniors begin
•Post‐acute pay for quality reporting begins
•CO‐OP Program: Secretary awards loans and grants for establishing nonprofit health
•$500,000 deduction cap on compensation paid to insurance company employees and
•Part D “donut hole” reduction begins, reaching a 25% reduction by 2020


•Individuals without gov't‐approved coverage are subject to a tax of the greater of
$695 or 2.5% of income
•Employers who fail to offer "affordable" coverage would pay a $3,000 penalty for
every employee that receives a subsidy through the Exchange
•Employers who do not offer insurance must pay a tax penalty of $2,000 for every full‐
time employee
•More Medicare cuts to home health begin
•States must have established Exchanges
•Employers with more than 200 employees can auto‐enroll employees in health
coverage, with opt‐out
•All non‐grandfathered and Exchange health plans required to meet federally‐
mandated levels of coverage
•States must cover parents /childless adults up to 138% of poverty on Medicaid,
receive increased FMAP
•Tax credits available for Exchange‐based coverage, amount varies by income up to
400% of poverty
•Insurers cannot impose any  coverage restrictions on pre‐existing conditions
(guaranteed issue/renewability)
•Modified community rating: individual or family coverage; geography; 3:1 ratio for
age; 1.5 :1 for smoking
•Insurers must offer coverage to anyone wanting a policy and every policy has to be
•Limits out‐of‐pocket cost‐sharing (tied to limits in HSAs, currently $5,950/$11,900
indexed to COLA)
•Insurance plans must include  government‐defined "essential benefits " and coverage
•OPM must offer at least two multi‐state plans in every state
•Employers can offer some employees free choice vouchers for health insurance in the
•Government board (IPAB) begins submitting proposals to cut Medicare
•Impose tax on nearly all private health insurance plans
•Medicare payment cuts for hospital‐acquired infections begin (FY15)

2015 •More Medicare cuts to home health begin

2016 •States can form interstate insurance compacts if the coverage with HHS approval (2016)


•Physician pay‐for‐quality program begins for all physicians
•States may allow large employers and multi‐employer health plans to purchase coverage
in the Exchange.
•States may apply to the Secretary for a limited waiver from certain federal requirements

•Impose "Cadillac tax on “high cost” plans, 40% tax on the benefit value above a certain
threshold: ($10,200 individual coverage, $27,500 family or  self‐only union multi‐
employer coverage)

Monday, November 05, 2012

Let the Wind Production Tax Credit Expire

The Wayne County Taxpayers Association has been asked to join a coalition to support the expiration of the wind production tax credit and our board has decided to participate.

First established by the Energy Policy Act of 1992, the federal production tax credit (PTC) was intended to be a temporary measure to jump start renewable energy. Since its establishment nearly 20 years ago, the PTC has expired three times and been extended on five occasions – most recently in 2009 as part of the American Recovery & Reinvestment Act (ARRA). Most extensions have been for a period of one or two years, and several extensions have amended the list of qualifying facilities. Under current law, the credit will expire on Dec. 31, 2012.

Taxpayers have paid $20 billion so far . . .
In the past 20 years, taxpayers have paid more than $20 billion in tax subsidies to support the wind industry.
Even if Congress allows the wind production tax credit (PTC) to expire this year, American taxpayers remain on the hook to pay nearly $10 billion for existing wind projects.

The PTC’s costs are increasing, but wind jobs are not.
The subsidy cost continues to increase. According to EIA, as recently as FY2007, the PTC cost the government $426 million compared to $1.5 billion in 2010.  In FY 2010 alone, wind producers received $4.9 billion in subsidies from the federal government.  
Even with the PTC and wind generation additions, the wind industry lost 10,000 jobs between 2009 and 2010 – a 12% drop – and employment stagnated between 2010 and 2011. The wind PTC is not creating more jobs, but it is costing taxpayers more money each year. 

American taxpayers will pay billions more if the PTC is extended.
Extending the PTC just one year would cost taxpayers an additional   $12.1 billion. Subsidizing non-market driven wind jobs eliminates jobs elsewhere in the economy.

What does the American taxpayer get for those billions?
In 2010, wind companies received 42% of all government energy subsidies, but provided only 2.3% of the electricity generated.
The PTC rewards wind projects for every kilowatt-hour of electricity they generate, not for providing electricity inexpensively or when needed or devising cheaper ways to operate.
Since 1995, shortly after the PTC was first established, wind power has grown from 0.09% to 2.9% in 2011 of total U.S. electricity production; EIA projects it will only grow to 11% by 2035.

How much does wind really cost?
Electricity from wind by itself is more costly to produce (offshore more so than onshore) than, for
example, electricity from nuclear energy. The additional costs are passed on to households through electricity rates.
The levelized costs of energy for wind, reflecting the absence of the PTC after 2012, are close to competitive with combined-cycle natural gas in areas with good wind resources, and become more competitive by 2014 with only modest improvements

The Production Tax Credit Distorts Markets and Hinders the Operation and Development of Other Forms of Generation.
The maintenance of perpetual subsidies is not a sustainable solution to the new challenges facing the US clean tech industry. In the worst cases, maintaining lucrative, blunt subsidies over prolonged periods can even create a dis-incentive for firms to innovate or can support ‘dead end’ technologies that have no viable path to long-term competitiveness.