As the Obama administration continues to implement the health care overhaul law, some myths – including a requirement that workers must pay taxes on their health insurance next year – have begun to circulate.
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JACKIE JUDD: Good day. I am Jackie Judd and this is Health on the Hill. Congress is still in recess and no doubt lawmakers are at home fielding many questions from constituents and voters about the health care reform law. At about 2,100 pages, it is a challenge to fully understand, so today we are going to talk about some of the myths that have emerged about the law.
I am joined by Mary Agnes Carey, senior correspondent of Kaiser Health News, and Julie Rovner of National Public Radio. Welcome to you both and welcome to our new set.
Julie, you reported a story on some of the myths that abound about the health care reform law, the first one having to do with the implantation of a microchip. What was that about?
JULIE ROVNER: That’s right. There are some people who still think that in order to be part of this new law you will have to have a microchip implanted into you and that is definitely not the case.
JACKIE JUDD: So the government can follow you?
JULIE ROVNER: Yes, that was definitely going to be the idea. This is sort of the classic case of people adding two and two and getting 836. And what this came from originally was when the House passed its version of the health bill last year, there was included in that bill a requirement for the Food and Drug Administration to develop a registry of implantable medical devices. Now, these are things like heart pacemakers and artificial hips and artificial knees. And the idea behind it was that if these devices were to be recalled, and this has happened in the past. There have been artificial hips have been recalled for various reasons that either the FDA or the company that makes them would be able to locate the patient in whom these devices are implanted. So, that was the idea.
Now, also floating around on the web are videos about the first implantable microchip that can have your medical records put on it. These are microchips similar to the microchip you can put in your pets with your name and address, so that if your pet gets lost they can read the microchip and return your pet to you. Obviously, these microchips for humans are voluntary, but they are now approved by the FDA.
So people saw these microchips for humans and they saw this FDA implantable device registry, and they —
JACKIE JUDD: Put two and two together.
JULIE ROVNER: Yes, they conflated the two and immediately jumped to the conclusion that in order to be part of the public option to get insurance through the government you are going to have to have one of these microchips. Well, in the end, there was no public option in the bill and, in fact, the FDA implantable device registry didn’t make it into the final bill either, so none of these things came to pass.
So, why this myth is still circulating is a really interesting thing, since none of it is in the final law.
JACKIE JUDD: And there’s another myth you reported on which, to me, seems more like a potential misunderstanding and that has to do with whether people need to pay taxes for their health insurance beginning next year.
JULIE ROVNER: That is right, and this really is a misunderstanding and of course there is this Cadillac Tax that is floating around that will potentially take effect in later years, but those will not be people having to pay taxes. That is a tax that is levied on the insurance company.
What does happen next year though, and people will start seeing on their W2 form, that’s the form they get at the end of the year, with which they pay their taxes, there will be a line that shows how much their employer spent for their health insurance, but they will not be asked to pay taxes on this. This is an informational line, so that they can actually start to see that wow, my employer paid $10,000 or whatever on my health insurance and this is to start to give people an idea of how much employers are paying.
In later years, this may come into play as this Cadillac Tax does or doesn’t take effect, but for right now there is no change in the tax treatment of health insurance. The amount that your employer pays for your health insurance is still exempt from taxes.
JACKIE JUDD: The myths that you reported on largely originate with opponents of the health care reform law. Mary Agnes, you have done some investigating about some myths or again misunderstandings that have come from people who support the law.
MARY AGNES CAREY: One thing we heard a lot during health care reform is if you like your health plan, you can keep it. As part of health reform, well maybe, maybe not. Employers are making all sorts of decisions separate from the health law on the plans they offer, how much they cost, how much they want their employees to pay, and as they look at those costs and analyze them, they may change your current health care coverage.
As an employee you may look at if your co-pays and your deductibles and your premiums increase, you may want to change your coverage because the rules of the game, if you will, are changing, health care costs are growing. We found that out through a Kaiser Family Foundation poll released last week, employees are being asked to share a greater part of the burden. So, there are a lot of factors that could change, keeping that health care insurance whether you do it or not.
JACKIE JUDD: And you also found myth or misunderstanding regarding Medicare, Medicare benefits.
MARY AGNES CAREY: Well, there’s been a lot of conversation, and this is more from opponents of the bill, that Medicare Advantage, that your benefits are going to be cut. Now we know that in the bill, of course Medicare Advantage companies are being paid less, that was a decision made in the bill, but it is clear that the law says that your basic benefits cannot be touched as part of Medicare Advantage.
What could change there is Medicare Advantage providers, again these are these private plans in the Medicare program, they could just say well, if our reimbursement is lowered from the government, we are not going to have as many extra benefits, maybe not the eyeglasses, maybe not the gym memberships. Those things could go away but the basic standard package is not supposed to be changed as part of this.
JACKIE JUDD: You know, it is easy in one way to make light of some of these myths, the microchip for example, but there probably are some serious consequences with having these myths out there, some people believing them. What do you worry about when you report a story like this?
JULIE ROVNER: I think one of the big elements of confusion, too, is that a lot of the things that are happening now don’t have anything to do with the new law. Remember, most of the new law hasn’t taken effect yet, and won’t for another four years.
So, some of the things you see, like costs going up for, you know, the survey that came out last week, costs going up for health insurance, and everyone says wow, look, the new law is driving up the cost of health insurance. No, that had nothing to do with the new law. That has to do with costs going up in general.
So, I think that is almost, it’s a misunderstanding, it’s a myth, it’s sort of things that are being blamed on the new law that have nothing to do with it, and I think that’s one of the big problems and I think one of the reasons that Republicans said early on that they were going to sort of sit out this health law, is that they knew that it meant that Democrats were going to own the health care system for the next four years no matter what.
That was the idea, that everything could be blamed on the new law, whether or not it had anything to do with it, I think, and the Democrats’ problem from a PR point of view is the things that the new law has done that might be perceived as good, the $250 checks that are going out to seniors who fall into the Medicare donut, the drug donut hole. I think a lot of seniors who have gotten those checks; they have no idea what they are. They get a $250 check and think what’s this?
JACKIE JUDD: And they don’t know that it was part and parcel of the new law?
JULIE ROVNER: That’s right. The things that have happened with the new law, these high risk pools, basically all the people have heard is that a lot of people won’t be able to get into them or some governors haven’t, you know, they’ve only heard controversy. So, I think it hasn’t had the bounce for Democrats they have hoped they had, Republicans have really managed to make it very controversial.
So, I think there’s really been a lot of, it’s been a very mixed bag and there’s been a lot of controversy, a lot of it obviously hasn’t taken effect yet, and I think a lot of the bad news about health care has been pinned on the law, whether or not it’s been the law’s fault.
JACKIE JUDD: And what does this do for the federal policy makers or the implementers, I should say, the people responsible for implementing this over the next four years - how much more difficult does it make their job to get this done?
MARY AGNES CAREY: I think it makes it incredibly difficult, because the law is sweeping, it is complex, and they have got to explain. Let’s think about, Julie just talked about some of these high risk pools, for example. How are those working? They could be different. A state could ask the Federal Government to implement it. The state itself might implement it. There are going to be provisions that will go into effect next month that may or may not benefit individuals. Those all have to be explained.
Then you’ve got the longer range game of many provisions going into effect down the road. You have to write the regulations. You have got the players, if you will, the insurers, the hospitals, the doctors, all the health care providers that are affected. You have got to deal with them, and you’ve got to explain it clearly to the public. This is going to be a very difficult thing to do. They are doing their best. Certainly they have got websites and all sorts of information to help people, but it’s going to be complicated.
JACKIE JUDD: And a very, very long process for consumers to get comfortable with it, if ever.
JULIE ROVNER: That’s right and of course you’ve got Republicans running sort of nationwide on the let’s repeal it, or let’s repeal it and replace it. Replace it with what? So, you’ve got complexity.
JACKIE JUDD: Or let’s not fund it.
JULIE ROVNER: Right, complexity is never the friend of the political process, and I think we are seeing that in spades this year.
JACKIE JUDD: Okay, well thank you both very much for joining me for Health on the Hill, Mary Agnes Carey of Kaiser Health News, and Julie Rovner of National Public Radio. Thanks.