What does health care reform include … REALLY?

March 26, 2010

As we continue to receive news on the new health care legislation, we will update you. The following hopefully adds some clarification to some of the public’s questions.

Confusing doesn’t even begin to describe it. Throughout the very long debate over health care reform, a great deal of misinformation (spurred by presumption or misunderstanding) was circulating. Additionally, many changes and alterations to the proposed law were made along the way. At this point, some of the arguments your friends, neighbors or co-workers continue to debate don’t even factor into the legislation signed by President Obama. So what’s the truth behind the Affordable Health Care for America Act?

Q: Will I be forced to change insurance?
A: No. That’s a MYTH.
If you’re satisfied with your current plan, you can keep it.2

Q: Will illegal immigrants now be covered by our money?
A: No. That’s a MYTH.
In fact, undocumented immigrants are expressly excluded from coverage. Only legal immigrants who pay their share will be covered.3

Q: Will I go to jail or be harassed by the IRS if I don’t have health coverage?
A: No. That’s a MYTH.
In 2014 Americans (except Native Americans, Inmates or those with religious objections) will be required to have health insurance or pay an annual penalty. True. However, the law prevents the IRS from using levies, liens or seizing property. Additionally, the IRS cannot impose criminal penalties (such as time in jail).4

Q: I heard there was going to be a 10% tax increase across the board. Is that true?
A: No. That is a MYTH.
While there will be tax implications, most of the biggest changes apply to medical manufacturers, insurers and pharmaceutical companies. In fact, some Americans may see no changes at all. Tax changes that could affect average individuals include …

·        A 10% sales tax on indoor tanning (yes, really)

·        A 0.9% increase on the Medicare tax rate

·        A 3.8% tax on investment income for individuals earning more than $200,000 and households earning more than $250,000 5

·        Taxes on high-end or “Cadillac” health care plans (this excise tax would not begin until 2018 and only apply to insurers of plans that exceed $10,200 annually for individual coverage, or $27,500 annually for family coverage) 6

Q: Will the government now pay for abortions?
A: No. That’s a MYTH.
The law already in place which prevents using federal money to fund abortions (except in cases of rape, incest, or danger to a woman’s life) is not being altered. 2

Q: Will I have to pay for other people’s abortions?
A: No. That’s a MYTH.
Those opposed to abortion will not be forced to assist in funding them. You can simply select a plan that does not offer them. This applies not only to people who may have objections to abortions on moral grounds, but also to those who simply have no reason to pay an extra premium for that type of coverage (such as women past their child bearing years or single men). 1

Q: Does the “Public Option” mean the government will run health care?
A: No. That’s a MYTH … and a non-factor at this point.
In fact, the “public option” did not make it into the final legislation that President Obama signed. THERE IS NO PUBLIC OPTION. Even before it was dropped from the bill, it was misunderstood to be government-run health care – wherein the government would make your health care decisions. Rather, it would have been government-provided insurance option to compete with private insurance.5

Q: Will my Medicare benefits be cut in order to extend care to others?
A: No. That, too, is a MYTH.
Brooks Jackson, director of FactCheck.org, says that although the reform package includes $500 billion in "cuts", it does NOT include traditional Medicare benefit reductions.8

Q: Does this mean that “death panels” are now a reality?
A: No. And they never were.
This myth was based on misunderstanding of a provision in the original bill that required payment, by Medicare, for health care practitioner-led end-of-life counseling. This is not part of the law.7

For more answers, you can visit www.whitehouse.gov/healthreform

As always, please call our office with any questions. We wish everyone a very Happy Easter!


Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Edward J. Kohlhepp, Jr., CFP®, MBA




These are the views of Peter Montoya Inc., not necessarily those of Kohlhepp Investment Advisors, Ltd. nor Cambridge Investment Research, Inc., and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Past performance is not a guarantee of future results.

.petermontoya.com, www.montoyaregistry.com, www.marketinglibrary.net





1 - cnn.com/2010/POLITICS/03/23/health.care.timeline/index.html?hpt=T1 [3/23/10]

2 - signonsandiego.com/news/2010/mar/23/health-care-myths-realities [3/23/10]

3 - poder360.com/article_detail.php?id_article=3994 [3/24/10]

4 - insurancenewsnet.com/article.aspx?id=174568 [3/24/10]

5 - americasnewsonline.com/healthcare-bill-does-very-little-to-hinder-health-insurance-companies-903/ [3/24/10]

6 - americasnewsonlineboston.com/business/personalfinance/managingyourmoney/archives/2010/03/tax_implication [3/24/10]

7 - theglobeandmail.com/news/world/no-death-panels-but-obamas-reforms-do-bring-change/article1508653 [3/22/10]

8 - timesfreepress.com/news/2010/mar/24/medicare-changes-misrepresented-advocates-say [3/24/10]
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Kohlhepp Investment Advisors, Ltd.
3655 Route 202, Suite 100
Doylestown, PA 18902
Phone: 215-340-5777
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