REFORM FINANCE

WRITERS: THOMAS RUGGIE, CHFC, CFP

As Americans, we pay more for health care than any other developed country, and still health care costs continue to skyrocket.

Since health care reform (known as The Patient Protection and Affordable Care Act, aka Obamacare) was signed into law in 2010, some elements have gone into effect while others will begin rolling out this year and in 2015. Here are some basics of how these changes may affect you financially.

The biggest change is most Americans and legal residents must purchase health insurance. This provision took effect this year (although some people can be exempted if they can show financial hardship, that health insurance goes against religious beliefs, or that they are American Indian.) Financial penalties for those who don’t purchase insurance start at 1 percent of their income and rise to 2.5 percent of income by 2016. Note: The employer’s mandate to provide coverage for employees was also scheduled to begin this year; however, the requirement will not be enforced until January 2015.

This year Medicaid was expanded to allow more people to qualify, including low-income adults without children. For those who don’t qualify for Medicaid and can’t afford health insurance, state-based insurance exchanges may offer slidingscale subsidies to help pay premiums.

Starting this year:

Insurers can’t reject you for coverage based on your health status. For now, a high-risk insurance pool will be created on a temporary basis to make sure those who have been rejected and uninsured for at least six months can get access to health coverage.

Insurance companies have to cover preexisting conditions in children. This could make it more affordable for some parents to get help for chronic diseases and other problems affecting their children.

Policies sold on insurance exchanges will have to cover visits to the doctor, prescriptions, preventative tests, maternity care, and hospitalizations.

Lifetime limits on coverage are banned, and annual limits on coverage will be disallowed.

Children will be able to remain on their parents’ insurance policy until their 27th birthday, as long as there is no insurance offered through the child’s work.

Those in their 20s will have the option to buy “catastrophic” insurance plans with lower premiums and coverage that kicks in after $6,000 in out-of-pocket expenses.

If you have Medicare, you are probably aware of the “doughnut hole.” In 2010, seniors participating in Medicare

Part D began receiving a $250 rebate to help close this gap in the prescription drug coverage program. In 2011, participants in the program also received a 50 percent discount on name brand drugs. Subsidies and discounts will eliminate the gap over the next 10 years so that by 2020, those seniors now paying 100 percent of their prescription costs will only pay 25 percent of them eventually.

Preventative services through Medicare are now free (no co-payments or deductibles), providing a cost-effective way to receive screening for cancer and other health issues.

In 2011, some began seeing their benefits cut for items such as hearing aids, eyeglasses, and wellness center memberships. The cuts are being phased in over the course of seven years.

As you might imagine, health care reform is going to affect taxes, and even deductions. The Congressional Budget Office (CBO) says health care reform will pay for itself — and reduce the deficit in 10 years. That doesn’t just happen magically. Here are some of the changes to taxes as a result of health care reform:

• Couples earning more than $250,000 a year, and individuals earning more than $200,000 a year, will see an increase from 1.45 percent Medicare tax to 2.35 percent (as of 2013).

• Those with the higher income listed above would also see a 2.8 percent tax on unearned income (interest and dividends).

• Starting in 2018, a 40 percent excise tax will be imposed on the portion of employer-sponsored “Cadillac plans” that exceeds $10,200 a year for individuals and $27,500 for families.

• The threshold for deducting medical expenses (unreimbursed) would be raised to 10 percent of income from 7.5 percent, so many will lose these current tax deductions.

• Those who use indoor tanning facilities will pay a 10 percent tax.

• Your tax-advantaged flexible spending account contributions will be limited to $2,500 for medical expenses.

It’s hard to tell what health care reform will do to your insurance premiums. Whether or not this bill will actually keep a lid on costs is being debated. There are some arguments that unhealthy people will see lower premiums on individual plans, while the healthy see the same or higher premiums. Those who end up receiving subsidies, reports the CBO, will see an 11 percent decrease in their premiums, and those with small group coverage are expected to see their premiums remain the same. Big employers are expected to see premiums stay flat or drop by as much as 3 percent.

It’s time to look over your health insurance and make plans for what the future most likely holds for you, depending on your current situation and the possibilities for health insurance going forward.

The provisions of the new health care law are complex. If you would like to learn more about how your health care coverage may change, visit www.healthcare.gov.

If baggy, swollen, in-turning or out-turning eyelids are impacting your vision and appearance, you may be a candidate for cosmetic blepharoplasty, a safe, effective surgery that removes excess skin and fat from the upper and lower eyelids. Locally, one of the most respected and experienced doctors performing this procedure is Board-certified Comprehensive Ophthalmologist, Shelby Terpstra, DO.

“Every service I provide is designed to help people see and feel better,” says Dr. Terpstra, “but blepharoplasty is unique in that it can actually enhance a person’s appearance to match their improved vision and outlook.”

Board-certified ophthalmologist: SHELBY L. TERPSTRA, DO

The surgery is relatively simple and can correct an array of pathologies, functional problems and cosmetic disfigurations, and is often covered by insurance. Post-op, Dr. Terpstra’s patients report enjoying improved peripheral vision, restoring for many the ability to watch TV, read, drive and so much more.

Additionally, patients look more alert and refreshed. Says Dr. Terpstra, “I’ve done countless blepharoplasties and seeing the boost to patients’ function and self-esteem is rewarding every time.”

If you think blepharoplasty might be right for you, call us today for a consultation. It will be an eye-opener.

“Everything about Dr. T and this procedure exceeded my expectations. There was no pain, no bruising, the healing process was extremely quick. My friends have all commented on how wonderful I look, and requested Dr. T's information so they could get it done as well.”

– Simone Hasker

“My experience with this procedure was excellent. The results have been amazing – so much so, I sent my husband to Dr. Terpstra to have the same procedure. Now both of us are seeing better!”

– Mary Allen

While the majority of patients report a positive result, surgical outcomes may vary.