Now that it’s 2011, parts of the Health Care Reform Bill kick in. The linked article summarizes changes in Medicare, giving seniors cheaper prescription drugs and giving them some free preventative tests. Also a $2.5 billion tax on the pharmaceutical industry, which can only mean higher prices and less money to invest in new miracle drugs. Here are some of the changes that will affect everyone:
For those insured outside Medicare, 2011 starts a new requirement that insurers must spend 80% of revenue for small-group plans and 85% of revenue for large-group plans on medical care. The requirement is designed to rein in industry profit and administrative costs. Carriers that don’t meet the requirement will have to issue rebates to consumers, though those won’t go out until 2012.
Consumers will no longer be able to use their flexible spending accounts—tax-free funds set aside for medical costs—to pay for most over-the-counter items unless they are purchased with a prescription.
For many consumers, Jan. 1 will mark the first opportunity to tap into a slate of benefits that began taking effect Sept. 23. That’s when the law called for insurers to allow parents to keep a child on their policy until their 26th birthday, among other things. Employers didn’t need to make that batch of changes until they started a new plan year.
Nurse midwives also will see change in the new year. Until now, certified nurse midwives were paid 65% the rate of physicians for performing the same services by Medicare. Now they will be paid at the same rate.
I don’t understand. First of all, 80% of revenue for one thing plus 85% percent of revenue for something else adds up to 165%. That must be a misprint. But it seems wrong for the government to “rein in profits and administrative costs.” How does the government know how much administrative costs will be, much less how much profit a business should be allowed to make?
And why limit flexible spending plans? How will that help consumers? And how will paying midwives as much as doctors hold down health care costs?
How is any of this a good thing?