Not too long ago, the Supreme Court ruled that the Patient Protection and Affordable Care Act (PPACA)  was a tax, and therefore constitutional. One one part of the law was deemed unconstitutional and struck down. For consumers, that means that the changes already implemented since the 2010 act was passed will remain in place. Because the PPACA includes milestones, and different provisions take place at different times, new changes will be coming for 2013.
As you prepare for the coming year, and evaluate your health care coverage  going forward, here are some things to think about:
Your Health Care
Many of the provisions of the new health care act have already been in place, some of them since 2010. Additionally, other provisions will be coming online in the next few years. For 2013, the changes to health care coverage include:
- New preventative care coverage: New funding is coming to state Medicaid programs, meant to reduce the cost of preventative care to patients.
- Medicaid payments to primary care doctors: The federal government is providing more money to states so that primary care doctors have the larger Medicare payment rates for primary care services.
- Coordination of patient care and bundled payments: The law creates a pilot program that is meant to help doctors, hospitals, and other health care providers to bundle services and bundle payments. The idea is to coordinate care, and the patient/insurance company only has to worry about making one payment.
- More funding for CHIP: The idea is to provide more funding to states in an effort to expand coverage for children who need health insurance.
These items follow such addressing overpayments to insurance companies, improving access to community care clinics, extending coverage for young adults, getting rid of lifetime caps on coverage, and getting rid of the ability to deny children coverage due to pre-existing conditions, among other provisions.
Taxes and the PPACA
Of course, these changes have to be paid for. There are some tax changes coming in the next few years. Here are the tax changes to expect in 2013 (the individual mandate doesn’t take effect until 2014):
- Change in the health care deduction limit: Up through the end of this year, you can deduct health care expenses that exceed 7.5% of your adjusted gross income. However, starting in tax year 2013, that threshold rises to 10%. For some, that essentially results in a tax increase, since you have to spend more on health care before seeing the deductible. One way to get around this is to use a HSA  so that all of your expenses are basically tax deductible.
- Medicare wage surtax: Starting in 2013, if you make more than $200,000 as a single person, or $250,000 if married filing jointly, you will pay 0.9% of the income above that level.
- Medicare unearned income surtax: Another tax will be applied to Modified AGI (in this case AGI + tax-free income) for those with income levels that are the same as above. There is an additional 3.8% surtax applied to the lesser of your net investment income, or the excess Modified AGI beyond the limits.
- Excise tax on medical devices: There will also be an excise tax of 2.3% on medical devices such as prosthetics and wheelchairs, although items, like hearing aids and eyewear, that are sold in retail settings, aren’t subject to the tax.
There will also be penalties for companies of a certain size who don’t provide coverage to employees.
You need to figure out how you are likely to be affected, and plan accordingly.
(Photo: diekatrin )