Breaking News: Health Care Update

With the Senate’s decision today on reconciliation of the health care reform bill, I want to provide some perspective on the year-long effort.

I believe that one of the most important elements of the reform bill is that the excise tax will not affect you – not today, not tomorrow and not in the future. We stood our ground because we knew we were right. Due in large part to our strong, consistent opposition, the excise tax was modified repeatedly and watered down drastically.

No matter where you stand on the larger reform effort, please know that we worked very hard to insulate you from that unfair tax, and we were successful. Despite what you may have heard, despite the dire warnings and misstatements, fire fighters will keep their current health care and their taxes will not go up.

Here are a few key points: The excise tax:

• Has been scaled back significantly and won’t even take effect until 2018

• Was modified so it will apply only to those with the richest plans – $10,200 for an individual and $27,500 for families

• The tax threshold for health plans that cover fire fighters and others in high-risk professions is even higher – $11,850 for individuals and $30,950 for families

• Will not be applied to dental or vision coverage

While we focused on the excise tax, that is just one element of a broad legislative overhaul, and the truth is there are many changes in the bill that we can support. The major changes ensure that:

• Health care coverage is extended to an additional 32 million Americans

• Ever-rising health care costs will be contained

The reforms also have major implications for the fire service. We all know we can’t afford to continue serving as the primary health care provider for people without insurance, and expanding coverage to the uninsured will help address budget shortfalls at fire department nationwide.

The bill also outlaws some of the worst practices that insurance companies have engaged in. Under the new law:

• Insurance companies can no longer deny coverage because someone has a pre-existing condition

• Insurance companies are required to cover the full cost of preventative care, including annual physicals and children’s immunizations

• Insurance companies are required to cover dependent children until they are 26

Changes to Medicare also are important because we have members who one day may enroll in that program. Those changes ensure that:

• The Medicare drug benefit for senior citizens is expanded, and effective July 1, will provide a 50 percent discount on brand-name drugs for the low-income elderly

• The gap known as the “doughnut hole” in Medicare prescription drug coverage will gradually close and provide the estimated three million senior citizens who fall into that hole a $250 rebate

• Medicare will be overhauled so it delivers health care to senior citizens more efficiently and at a lower price

The reform effort has addressed many of the monumental problems afflicting health care in our country for too long. By substantially watering down the excise tax, extending health care coverage to many of the uninsured, improving Medicare for senior citizens and reining in insurance companies, we corrected some of the worst elements of our health care system.

We also know the bill is not perfect and more needs to be done. But this is a good start to improve the delivery of health care, access to health care and to contain costs.

The health care system had become unsustainable, and allowing this crisis to continue was not a realistic option. A recent report by the Government Accountability Office found that the long-term fiscal outlook for state and local governments is very bleak, entirely due to rising health care costs. Even if the economy makes a strong, sudden recovery, health care costs would force cities to continue making deep cuts in fire department budgets.

These changes will help address that crisis.

Fraternally,

Harold A. Schaitberger
General President