Health care law’s tax hikes are coming: Who pays?
Posted Aug. 09, 2012, at 8:33 p.m.
WASHINGTON — For the vast majority of people, the new health care law won’t mean sending more money to the IRS.
But among those who will see increases, the wealthiest 2 percent of Americans will take the biggest hit in taxes, starting next year. The pain will be shared by some who aren’t so well off — people swept up in a hodgepodge of smaller tax changes that will help finance health coverage for millions in need.
Eventually, roughly 20 million people will benefit from tax credits that start in 2014 to help them pay insurance premiums.
The tax increases — plus a mandate that nearly everyone have health coverage — are helping make the law an election-year scorcher. Obama is campaigning on the benefits for the uninsured, women and young adults. His rival, Mitt Romney, and Republican lawmakers are vowing to repeal “Obamacare,” saying some health care reforms are needed but not at this cost.
Lots of the noise is about the financial consequences for people who decline to get coverage and businesses that don’t offer their workers an adequate health plan. Some 4 million individuals without insurance are expected to pay about $55 billion over eight years, according to the Congressional Budget Office’s estimates. Employers could be dinged an estimated $106 billion for failing to meet the mandate, which starts in 2014.
But that mandate money, whether it’s called taxes or penalties, is overwhelmed by other taxes, fees and shrunken tax breaks in the law. These other levies could top $675 billion over the next 10 years, under the CBO’s projections of how much revenue the government would lose if the law were repealed.
The biggest chunk is in new taxes on the nation’s top 2 percent of earners — some $318 billion over a decade.
Other major taxes are aimed at the health care industry, and some of that cost is sure to be passed along to consumers as higher prices.
A rundown of the most significant tax changes — and who pays:
The Bullying Culture of Medical School
By PAULINE W. CHEN, M.D.Powerfully built and with the face of a boxer, he cast a bone-chilling shadow wherever he went in the hospital.
At least that is what my medical school classmates and I thought whenever we passed by a certain resident, or doctor-in-training, just a few years older than we were.
With the wisdom of hindsight, I now see that the young man was a brilliant and promising young doctor who took his patients' conditions to heart but who also possessed a temper so explosive that medical students dreaded working with him. He had called various classmates "stupid" and "useless" and could erupt with little warning in the middle of hospital halls. Like frightened little mice, we endured the treatment as an inevitable part of medical training, fearful that doing otherwise could result in a career-destroying evaluation or grade.
But one day, one of our classmates, having already been on the receiving end of several of this doctor's tirades, shouted back. She questioned one of his conclusions in front of the rest of the medical team, insisted on getting an explanation, then screamed back when he started yelling at her.
The entire episode unnerved us all; and over the next few weeks, we marveled at her courage and fretted over her potentially ruined career prospects. But there was one aspect of the event that disturbed us even more. One classmate who had witnessed the "screaming match" described how our fellow medical student had raised her voice and positioned her body as she threatened the doctor. "It was weird," he recounted. "It was like watching her turn into him."
For 30 years, medical educators have known that becoming a doctor requires more than an endless array of standardized exams, long hours on the wards and years spent in training. For many medical students, verbal and physical harassment and intimidation are part of the exhausting process, too.
The Hidden Costs of Medical Student Debt
By PAULINE W. CHEN, M.D.He was a senior surgeon many of us in training wanted to emulate -- smart, busy and beloved by patients and staff. But we loved him most because he could have been any one of us. He had slogged through the same training program some 15 years earlier, and he had survived.
I caught up with him one afternoon during my internship, hoping to glean some wisdom, but all he could talk about was how he was going to be seeing patients less and focusing on his dream of improving hospital quality and efficiency. "Don't get me wrong," he said. "I love caring for patients." But the stress of keeping a practice afloat was wearing him down.
"Plus the monkey is finally off my back now," he said with an enormous grin. "I paid off my last student loan."
My heart dropped. That the specter of student loan payments would loom over my life for at least another decade and a half was utterly disheartening.
But absolutely true. It wasn't until my early 40s that I paid off my last loan.
For almost three generations, debt has been a nearly inescapable part of becoming a doctor. Over 80 percent of each medical student class will graduate in debt; and while that percentage has remained unchanged for 25 years, the increase in the total amount owed has leapfrogged over all other economic reality checks, like inflation and the consumer price index. According to the Association of American Medical Colleges, which has been trying to address the problem for nearly a decade, young doctors who graduated from medical school last year had an average debt of $158,000, or $2.3 billion for the group as a whole. Almost a third of students owed more than $200,000, a number that will only increase with the addition of interest over payback periods of 25 to 30 years.
Rethinking the Way We Rank Medical Schools
By PAULINE W. CHEN, M.D.
During my internship, the first year after graduating from medical school, I took care of a middle-aged woman who began our first conversation with a question that patients still ask me today.
“So doctor,” she said as I pulled my stethoscope out to listen to her heart, “where did you go to medical school?”
In a social context, I might have considered her question to be polite chatter, a filler during an awkward quiet moment. But on that particular afternoon her words felt more like a dart lobbed at what I had presumed to be a budding and promising patient-doctor relationship.
Trust from this patient, I remember thinking, is not going to depend on my bedside manner or clinical judgment but my medical school.
But even before I had placed my stethoscope bell against my patient’s chest, I realized that I, too, had been culpable of submitting doctors to the same line of questioning. Although I might have satisfied my curiosity more surreptitiously — searching on the Internet, scanning hospital directories, inconspicuously craning my neck to discern Latinized school names on diplomas — I was just as eager as my patient to learn about the medical schools my doctors had attended.
Once I had the information, I would do what my patient did that afternoon: I would mentally find its place within the medical school hierarchy in my mind. Like some existential fast forward button, the right answer to this question could raise the trust in any patient-doctor relationship to a whole new level without a second thought, because by virtue of having graduated from a “good” school, that doctor had the ability to address the most pressing needs of all of his or her patients.
Soaring Ointment Prices Are a Dermatologic Mystery
By KATIE THOMAS
They are the staples of most dermatology practices: generic creams and ointments that treat everything from skin rashes to athlete’s foot to scabies. Many doctors prescribe the drugs without a second thought. But increasingly, some dermatologists say, patients are complaining about a recent, mysterious and rapid rise in price.
Take betamethasone dipropionate, a cream used to relieve itchy skin. In 2008, a tube cost $18.17. The medicine now costs $71.28, according to Red Book, which tracks wholesale drug prices. Permethrin cream, which kills scabies mites, cost $29.25 in 2008 but has jumped to $71.08 today.
The hefty price increases have stumped doctors and their patients. “It seems to me that something is going on, but I don’t have quantitative details,” said Dr. Steven R. Feldman, a professor of dermatology at Wake Forest Baptist Medical Center in Winston-Salem, N.C. “I wouldn’t have thought that these old-timey, generic drugs would be very costly.”
The added revenue from the higher prices has improved the bottom lines of the handful of companies that make such drugs, and has even figured into a contested buyout of one of the companies by an India-based drug maker, Sun Pharmaceuticals.
Medicare overspending on anemia drug
By Peter Whoriskey,
The U.S. health-care system is vastly overspending for a single anemia drug because Medicare overestimates its use by hundreds of millions of dollars a year, according to an analysis of federal data. The overpayment to hospitals and clinics arises because Medicare reimburses them based on estimates rather than the actual use of the drug.
The government for years has tried to rein in spending on the prescription drug, Epogen, which had ranked some years as the most expensive drug to taxpayers through the Medicare system.
Medicare’s current estimates are based on Epogen usage in 2007 for dialysis treatments. But since then, use of the drug has fallen 25 percent or more, partly because of Food and Drug Administration warnings about its perils and partly because Congress removed the financial incentives for clinics and hospitals to prescribe the drug. Because Medicare continues to reimburse health-care providers as if the dosing levels haven’t changed, the significant savings in doses has not translated into savings for the U.S. Treasury.
The amount of the overspending is more than $400 million annually, according to calculations done separately by The Washington Post and experts.
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