I think it’s truly laughable that health care reform in this country has been called the Affordable Health Care Act, especially since this small business owner has barely been able to afford the escalating health care costs in the past three years. Some big changes will go into effect come January 1, 2011 for those with health savings accounts (HSA), flexible spending accounts (FSA) or health reimbursement accounts (HRA).
Congress has taken away many of the items which were eligible for coverage. Over-the-counter meds will no longer be covered under FSA and HRAs unless you have a prescription, except for insulin, which will still be covered. For those with HSAs, you must have a prescription for all over-the-counter meds, even insulin. These changes DO NOT apply to over-the-counter medical supplies and devices such as crutches, bandages and test kits. The IRS website spells out the changes in detail.
Small business owners and sole proprietors, who face exorbitantly high health care premiums, often use the HSA/HRA to supplement the catastrophic coverage they purchase as insurance by making contributions which can then be used tax free. That won’t change but the penalty will jump from 10 to 20% if you make a withdrawal for a non-covered medical expense.
But let’s see how this Affordable Health Care plan really pans out in cold hard numbers. (Please keep in mind that I am blessed with great health. ) In 2008, as a sole proprietor, I paid $5,400 in health care premiums and had a $1,000 deductible. By 2009 my premiums jumped to $6,200, an astonishing 15%. In 2010, I could no longer afford the “good” plan at cost of $9,600 (that’s a 55% jump from the previous year) and opted for the “catastrophic” coverage at $5,640, assuming I would contribute to an HSA to make up the difference. I have yet to open an HSA and have curtailed routine preventive medical care because the deductible is now $3,000 in network and another $3,000 out of network. Can someone in Congress please tell me how this is affordable health care?
By the way, as a professional sole proprietor and small business owner, I also have to pay malpractice insurance and general liability insurance premiums, which means that my insurance costs for running a small business run between $10,000 and $15,00 per year.
By the way, the insurance company just emailed me that my catastrophic rates are going up another 20% in 2011. I need oxygen – STAT!