“Benefits” of New Health Care Plan Start in January

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I do not discuss politics very often. However, when the government does something that effects so many people in a negative way – I have to vent.

Over the past 2 years I have participated in my company’s Flexible Spending Account plan. What is a FSA? It is a plan offered through your employer that allows you to set aside part of your earnings to pay for qualified medical expenses, usually for medical expenses such as doctors visits and prescriptions. Here is the important thing – Money paid into the FSA is not subject to payroll taxes, resulting in a substantial payroll tax savings. Keep this in mind.

Obama's Health Care Plan

Due to President Obama’s Health Care Plan- many of the benefits and tax savings of the FSA will no longer exist as of January 1st. You see, in the infinite wisdom of the Obama Administration along with the Democratic Congress – the Health Care Bill that was recently passed was structured to remove the ability to use FSA funds for non-prescription medical items. In the past several years you have been able to purchase cough medicine, allergy medicine, blood pressure monitors, glucose testing meters, eye drops, insoles, and thermometers. These are example of medical expenses that you could use your FSA funds for.

Now remember – your income which went into your FSA account was not taxed.

Effective January of 2011 – the new rules under the guidance of the Health Care Bill will strip the ability to use FSA funds for many medical expenses UNLESS you have a doctors prescription. Will you get a doctors prescription to purchase cough medicine? Of course not – the cost of the doctors visit would nullify any savings offered making the purchase with FSA funds.

So – what will happen? People will put less money in the FSA due to there being fewer things to spend it on. You see – if you do not use your FSA funds by the end of the year – you lose the money.

This basically amounts to a tax increase on 44 million people as of January. You can thank the people in the picture above.

I seem to remember Obama during the campaign promise he would not raise taxes on the middle class. Hmmmm…… Of course – this is only the beginning.

I am in now way suggesting that the health care system in this country does not need improvement. It absolutely does. But changing it in the direction it is going is not the answer. Thousands of companies are raising insurance premiums on their employee’s due to insurance companies raising their costs in anticipation of the new rules and regulations.

Now – I know what you must be thinking - “What in the world does this have to do with survival & preparedness? I mean – come on Rourke – how about some hand to hand combat stuff already?”

It is simple. People are going to have to pay more for less health care over time. This means they will have less money to spend which certainly does not help the economy. Are you worried about the economy over the next few years? I certainly am and the Health Care Plan will do nothing but effect it in a negative way.

For more info -read this article: http://politics.blogs.foxnews.com/2010/10/27/taxpayers-lose-key-benefit-health-care-law

Ok – I feel better now.

Thanks.

Rourke

Tags: Current Events

Current Events | Rourke November 4, 2010

9 Comments to ““Benefits” of New Health Care Plan Start in January”

By Scott, November 4, 2010 @ 4:26 am

Rourke your so very right some changes are needed but I feel as well that what they did will hurt everyone. I am sure there is a surprise or two still left undiscovered also. Tax and control is all I see.
By jjmurphy, November 4, 2010 @ 11:48 am

You are right to post about this topic. The change in health-care rules have a direct impact on how everyone should prepare.

Preppers have to pay attention to politics and new laws. To think you can prepare properly without knowing what is going on in Washington, D.C. or your state capital is just sticking your head in the sand.

For instance, without paying attention to the political news in California you would not have been able to prepare and get your Berkey Walter Filter before they were banned, or stock up on mail-order ammo before that was banned, too. (Two small news items but of great importance if you live in CA. Thank God, I don’t)

We all need to stay informed.
By JeSter, November 4, 2010 @ 12:48 pm

My company just did open enrollment for 2011. Guess what!?! Our health insurance premiums went up 26%. Thank you Federal Government!

I know your post wasn’t about close quarters combat, but link it all together. No FSA = higher out of pocket expenses. QE2 = 20% reduction in the value of the dollar. Commodity prices rising = higher prices at the grocery store, etc. I think things will get VERY tight for most people over the next couple of years. That will definitely effect preparedness.
By Kevin, November 4, 2010 @ 10:44 pm

I agree that this topic is linked to survival and preparedness. Not only will these actions affect our wallets and available medical care but it makes me think more than ever about our own health. If we ever needed to be concerned about our health and longevity, that concern is growing. In our house we’re closer to retirement (whatever that really means at this point!) than before and I see our medical cost going up and services going down. And if you’re like us and have some health issues, then trying to plan for our health future becomes more scary. I can’t imagine what it would be like if we didn’t have health insurance now and don’t want to think about what it could be like when we lose it. When I talk to my son about the future, one of the things we discuss regurlarly is his health and how he needs to be smarter and avoid the mistakes I made. There’s nothing wrong with working hard. But he (we) need to be smarter as well. Plan now, manage your health now, there’s rarely any profit in playing catch up.

Good discussion and I believe very important. By the way…does anyone feel better after the recent elections regarding reps vs dems with this topic in mind?
By Rourke, November 4, 2010 @ 11:38 pm

Thanks for the comments.

Since the election…..do I feel better? Not yet. I think time will tell if things will really change.

Rourke
By Craig, November 5, 2010 @ 12:13 am

Rourke,

I’m an independent insurance agent and represent lots of insurance companies. We do health insurance and I want everyone to know about another effect this bill is having. All but one of our individual health insurance companies has pulled out of the market for kids policies. So all the nice guarantees that were put into the law so that kids could get good insurance had the effect of making it virtually unavailable. By the way, if your kid’s under 2 years old it’s going to cost you about $400 (yes…that’s no type) a month to get a policy with a $2,500 deductible and generic Rx coverage now.

This bill’s only goal was to drive the insurance companies out of business so our leaders could put in a single payer system.

Keeping my fingers crossed for repeal!
By Apartment Prepper, November 5, 2010 @ 12:43 am

I will using whatever is left in our FSA to stock up on those non prescription medicines like aspirin, allergy medicine before the end of the year; hopefully with the longest expiration dates possible. By 2013, FSAs will be limited to $2500 instead no limit, so will be even less of a tax shelter, and will fall short for higher priced items like braces or Lasik surgery. More “great” changes ahead!
By Ty S, November 5, 2010 @ 6:32 am

Do I feel better since the elections? Honestly, I’m more uncertain now than I was before. I voted Republican with the hope that the balance of power in Congress would be, well, more balanced. (Well, I also wanted to see the dems take a serious thrashing. looks like Reid and Obama still don’t understand why the people are angry). I’ve been reading and listening to what some of the GOP leaders have been saying and I’m wondering if they’ll do anything worthwhile. At least one of my state senators has been invited to a meeting with Obama. He was a guest on a local radio station and said that they’ll agree with the President when he agrees with the people. So good luck there. Here’s hoping the GOP will actually come up with something to replace Obamacare with that enough of the Democrats can agree on to pass. And they’d better not make the same mistake the Dems made and spend most of their time on healthcare instead of the economy!

I have a question of my own. I skimmed through the bill some time ago and I believe there was a part that said something along the lines of “No future Congress may make any changes to this bill.” Uh, really? Is that even legal?

Um, if I’m derailing the topic let me know and I’ll stop. I tend to get carried away.
By Rourke, November 5, 2010 @ 12:57 pm

About the part of not being able to be changed (Health Care Bill) – that does not sound legal. Bill’s are changed all the time. Even the Constitution itself is changed via Amendments.

I hope these newly elected folks as well as ones currently in office hear the people – if not nothing will change.