Here are some handy facts that my insurance company sent me the other day.
- Limit on flexible spending account (FSA) contributions. Today, employers set their own caps on how much employees can contribute to these plans that let them use pretax money to pay for health care expenses. For 2013, the government will enforce a $2,500 limit per employee. [Because government Knows Better than you or your employer.]
- A new Medicare surtax on investment income. Until now, Medicare taxes have only applied to earned income. For 2013, taxpayers filing individually with wages and self-employment income above $200,000 ($250,000 for married couples filing jointly) will pay a 3.8% surtax on the lower of:
- Their net investment income—which includes interest, dividends, capital gains and other amounts.
- The amount of their modified adjusted gross income that is greater than $200,000 ($250,000 for married couples filing jointly)
- An additional Medicare tax on wages and self-employment income for some. The existing Medicare payroll tax of 2.9% (of which 1.45% is paid by a taxpayer through payroll deductions) will be increased by 0.9% on wages or self-employment income that exceeds $200,000 for single and qualifying head of household and widow(er) filers ($250,000 for married couples filing jointly).
- Higher hurdle for deducting medical expenses. Currently, out-of-pocket medical costs only are deductible to the extent they exceed 7.5% of your adjusted gross income. For 2013, that hurdle will rise to 10%. But if you’re 65 or older, that threshold remains frozen at 7.5% through 2016. [Then it rises—with 2013’s 65-year-old then 68.]
And what do we get for our money?
- Reduced access to medical care for seniors from reduced payments to doctors and hospitals by Medicare.
- Reduced access to medical care for the rest of us from a shrinking doctor population.
- Elevated health insurance premiums to pay for the tens of millions of Americans now covered by fiat.
- Elevated health insurance premiums to pay for those who still don’t buy insurance until they’re already at the ER.
- Elevated health insurance premiums to pay for pre-existing conditions which companies are required to cover at “no additional cost.”
- Elevated insurance premiums to pay for coverage for grown adults on their parents’ policies until these adults are 26.
- An insurance board that will tell your doctor and hospital what illnesses, injuries, and procedures for which they will reimbursed for treating you.
It’s a brave new world.