From the good offices of Vermont’s Sen. Pat Leahy (a few links added):
Fact vs. Fiction
It is disappointing that inaccurate and purposely misleading information regarding health care reform continues to be widely circulated. Throughout the past two years during the lengthy debate on Health Care Reform, Senator Leahy has continued to post updated information regarding the various health care legislative proposals being debated, including the full text of proposals, questions asked by directly by Vermonters, and daily updates on floor proceedings in the Senate in an effort to provide Vermonters with accurate and timely information on the health care reform debate.
Below are some of the most common myths regarding the Affordable Care Act with accurate information dispelling those myths and providing information about where to learn more.
To review some of the most commonly questions by Vermonters please also visit the Frequently Asked Questions page on this website.
To test your knowledge about what is actually included in the health care reform law visit the Kaiser Family Foundation website and take their Affordable Care Act quiz.
Fact vs. Fiction
Fiction
If you don’t buy health insurance, you will be sent to jail.
Fact
Taxpayers who are required to purchase health insurance and do not will receive a notice from the Internal Revenue Service (IRS) with the amount of the penalty they owe. Individuals who fail to pay the penalty are not subject to criminal prosecutions and the government cannot file notice of lien or levy any property for a taxpayer who doesn’t pay the penalty.
The obligation for individuals to purchase health insurance beginning in 2014 was included as part of the Affordable Care Act. The provision requires individuals to maintain minimum essential coverage for themselves and their dependents or pay a penalty of $95 in 2014. Families would pay half the amount for children, and the requirement includes a cap on the total allowable fine per family. If affordable health insurance coverage is not available to an individual, then the penalty would be waived. Along with the individual responsibility requirement, the Affordable Care Act also provides subsidies to some individuals beginning in 2014 to help pay for their health insurance premiums and other costs associated with their health insurance.
Taxpayers who are required to pay a fine but fail to do so will receive a notice from Internal Revenue Service (IRS). If an individual still neglects to pay the fine, the IRS can attempt to collect the funds by reducing the amount of their tax refund in the future. Individuals who fail to pay the penalty, however, will not be subject to criminal prosecution. The government cannot file notice of lien or levy on any property for a taxpayer who does not pay the penalty.
The aim of this provision is to encourage all Americans to obtain health insurance, which will result in lower health care costs for everyone. The Affordable Care Act relies on the shared responsibility of individuals, employers, states and the federal government.
For additional information regarding the individual responsibility requirement please visit the Kaiser Family Foundation website.
Fiction
Members of Congress are exempt from the health care reform law.
Fact
No one has received a special exemption from the Affordable Care Act. In fact, the health care reform law explicitly includes language regarding the health insurance plans for Members of Congress and their staff.
As a United States Senator, Senator Leahy’s health plan options are the same options offered to all federal employees. Included in the Affordable Care Act, was a provision that requires that “the only health plans that the Federal Government may make available to Members of Congress and Congressional staff shall be health plans that are created under this Act or offered through an Exchange established under this Act.” Members of Congress and their staffs can only purchase health insurance coverage from the health insurance exchanges that are made available for uninsured Americans. The full text of this provision is available on pages 80-81 in section 1312 of the Affordable Care Act which you can read here.
Fiction
Health care reform will jeopardize Medicare and will mean cuts in services and benefits for seniors.
Fact
Health care reform will help strengthen Medicare so that seniors can continue to receive quality health coverage for years to come.
The Affordable Care Act explicitly states that no benefits guaranteed under Medicare will be cut as a result of health care reform legislation. Today’s forecasts estimate that Medicare will be insolvent by 2017 because of ever-rising health care costs. The Affordable Care Act takes aim at that unfolding threat by addressing cost inefficiencies now, instead of waiting until later. The Affordable Care Act strengthens the financial stability of Medicare by targeting fraud and ending wasteful overpayments to insurance companies, while maintaining the benefits and services to seniors who use Medicare. The Act also helps Medicare users by offering prescription drug discounts to seniors who are trapped in the “donut hole,” by creating a better pathway for generic drugs to enter the marketplace, by eliminating the cost-share for preventative services, and by promoting coordinated care to prevent avoidable hospital readmissions.
For more information about what the health care reform law means for Medicare beneficiaries read Medicare and the New Health Law -What it Means for You prepared by the Center for Medicare and Medicaid Services.
- Beginning January 1, 2011, Medicare beneficiaries entering the Medicare donut hole will get a 50% discount on brand name prescription drugs. Click here to learn more about this provision.
Fiction
The health care reform law includes a tax on all real estate sales.
Fact
Under the Affordable Care Act, only certain real estate transactions for certain individuals above a particular income level would be subject to a Medicare Tax.
Unfortunately, much of the information widely circulated about a tax on home sales and other real estate transactions inaccurately describes the purpose and the effect of this provision. The 3.8 percent Medicare tax is often misunderstood, and has frequently been described as a 3.8 percent “sales tax” on all real estate transactions, which is inaccurate.
The provision that establishes this tax can be found on page 946, Section 1402 of the Affordable Care Act. This tax is often referred to as the “Medicare tax,” because it was designed to raise funds for Medicare. The Medicare tax goes into effect after December 30, 2012.
The Medicare tax is not a tax on all new home sales; it only applies to the profit that certain high income Americans make from the sale of their home. The groups that may be affected by this provision are individuals with annual incomes over $200,000 and married couples with a joint income of over $250,000. The only home sellers who will be affected by this provision are those who fit the above description, and who sell their home for a profit of more than $250,000. The tax will not apply to the first $250,000 in profits for the individual selling his or her home or to the first $500,000 in profits for a married couple.
While undoubtedly some home sales will see a tax increase under this provision, the tax will affect only a small percentage of home sales. A report released by the Tax Foundation on April 15, 2010 predicts that the new tax on investment income (including real estate) will affect only the top-earning 2 percent of American families.
The full text of the Affordable Care Act is available on the health care reform page of this website.
Fiction
Health care reform will hurt small businesses.
Fact
The Affordable Care Act will help small businesses, many of which are struggling now to even afford health plans for their employees.
Small businesses are a vital engine of Vermont’s economy. Unfortunately, rising health care costs are hitting small businesses especially hard, putting them at an even greater disadvantage against larger corporations. The Affordable Care Act will help level the playing field and give affordable options to small businesses that wish to offer insurance to their workers.
For example, the Affordable Care Act:
- Provides tax credits to small businesses to help them offer health insurance to their employees;
- Requires insurance companies to provide free preventative care so businesses do not suffer productivity costs because of sick employees;
- End the “hidden insurance tax” that has prevented small businesses from being able to afford to offer insurance to their employees. This hidden tax is built in to the premiums for insurance to compensate for the unpaid care given to the uninsured. Health reform will help get Americans health insurance and will end the inflated premium costs. And investments to lower health care costs overall will help spur the economy, enabling more businesses to thrive;
For more information regarding how health care reform efforts will help small businesses please visit the Implementation Center on this website as well as the Small Business Administration website and the Small Business Majority website for additional resources.
Fiction
The Affordable Care Act provides subsidies for illegal immigrants to receive health insurance.
Fact
The Affordable Care Act explicitly defines who is eligible for federal payments, credits or subsidies for health insurance coverage and makes clear that undocumented immigrants are ineligible.
Some have expressed concerned that undocumented immigrants will have the ability to receive subsidies for health insurance under the reform proposals in Congress. Senator Leahy does not support using government funding to subsidize insurance for those who have entered the United States illegally or who are residing in the United States in an undocumented status. The full text of the law clearly defines who is eligible for federal payments, credits or subsidies.
The relevant statutory language is below:
Patient Protection and Affordable Care Act
Subtitle D—Available Coverage Choices for All Americans
PART II–Consumer Choices and Insurance Competition Through Health Benefit Exchanges
- Section 1312 (f)(3) makes clear that undocumented immigrants are ineligible to participate in the health insurance exchanges: “ACCESS LIMITED TO LAWFUL RESIDENTS- If an individual is not, or is not reasonably expected to be for the entire period for which enrollment is sought, a citizen or national of the United States or an alien lawfully present in the United States, the individual shall not be treated as a qualified individual and may not be covered under a qualified health plan in the individual market that is offered through an Exchange.”
Subtitle E—Affordable Coverage Choices for All Americans
PART I—PREMIUM TAX CREDITS AND COST SHARING REDUCTIONS
Subpart B—Eligibility Determinations
- Section 1412(d) unambiguously states “NO FEDERAL PAYMENTS FOR INDIVIDUALS NOT LAWFULLY PRESENT.—Nothing in this subtitle or the amendments made by this subtitle allows Federal payments, credits, or cost-sharing reductions for individuals who are not lawfully present in the United States.”
The Act also establishes a fair process to accurately verify eligibility for participation in the benefits of health insurance reform that does not place unnecessary bureaucratic hurdles for U.S. Citizens nor undue administrative costs on the government.
Patient Protection and Affordable Care Act
Subtitle E—Affordable Coverage Choices for All Americans
PART I—PREMIUM TAX CREDITS AND COST SHARING REDUCTIONS
Subpart B—Eligibility Determinations
- Section 1411(a) required that the Secretary of Health and Human Services “shall establish a program . . . for determining . . . whether an individual who is to be covered in the individual market by a qualified health plan offered through an Exchange, or who is claiming a premium tax credit or reduced cost-sharing [is] a citizen or national of the United States or an alien lawfully present in the United States.”
- Section 1411(b) requires applicants for enrollment in a qualified health plan offered through an Exchange in the individual market to provide “name, address, and date of birth.” For those individuals claiming eligibility based on an attestation of citizenship, they must provide their social security number. For those individuals whose eligibility is based on an attestation of their immigration status, they must provide “the enrollee’s social security number (if applicable) and such identifying information with respect to the enrollee’s immigration status as the Secretary, after consultation with the Secretary of Homeland Security, determines appropriate.”
Senator Leahy has also heard from Vermonters with small businesses who employ seasonal workers and their concern about the requirement that employers purchase health insurance for their employees.
The Act exempts small businesses from the employer mandate to provide health insurance for employees, and employers are not subject to penalties if they employ 50 or fewer employees. Seasonal workers do not count towards the 50 employee threshold. And for those employers subject to the penalty, they are only responsible for providing health insurance for full-time employees.
Patient Protection and Affordable Care Act
Subtitle F—Shared Responsibility for Health Care
PART II—EMPLOYER RESPONSIBILITIES
Section 1513—Shared Responsibility For Employers
- Section 1513(a) states:
(B) EXEMPTION FOR CERTAIN EMPLOYERS-
(i) IN GENERAL- An employer shall not be considered to employ more than 50 full-time employees if—
(I) the employer’s workforce exceeds 50 full-time employees for 120 days or fewer during the calendar year, and
(II) the employees in excess of 50 employed during such 120-day period were seasonal workers.
(ii) DEFINITION OF SEASONAL WORKERS—The term `seasonal worker’ means a worker who performs labor or services on a seasonal basis as defined by the Secretary of Labor, including workers covered by section 500.20(s)(1) of title 29, Code of Federal Regulations and retail workers employed exclusively during holiday seasons.”
Fiction
Health care reform will lead to rationing of health care
Fact
Health care reform is aimed at increasing the options for Americans, not limiting them.
Unfortunately, prior to the passage of the Affordable Care Act rationing of health care happened all too often. Insurance companies decided whether or not beneficiaries could have a certain test or procedures, based not on medical necessity, but on the insurance plan and whether the test is affordable. This rationing left millions of Americans without adequate care or coverage and is taking away the decision making from patients and their doctors, putting those decisions instead in the hands of insurance company bureaucrats.
The Affordable Care Act is intended to improve the ability of patients to receive the care they need by setting ground rules for insurance companies to follow. No longer will insurance companies be allowed to deny coverage for preexisting medical conditions or to discriminate against consumers because of their gender. No longer will insurance companies be allowed to revoke insurance coverage from a patient who has been ill and deemed too sick for coverage. The government will have no role in telling patients what tests they can and cannot have. In fact, for the first time, the Affordable Care Act prohibits insurance companies from limiting choice of doctors. The Affordable Care Act guarantees your right to choose a primary care doctor from any available participating provider, designate any available participating pediatrician as your child’s primary care provider, and prohibits insurers or employer-sponsored plans from requiring a referral for obstetrical or gynecological (OB-GYN) care. Additionally, the Affordable Care Act prohibits health insurers and plans from restricting access to and charging patients more for out-of-network emergency care.
Health care reform is about improving choice for all Americans.
Fiction
The health care reform law will force individuals to pay taxes on their health benefits.
Fact
Health benefits will not be taxed under the Affordable Care Act, even though the value of your health insurance will be included on your W-2 form.
Title IX of the Affordable Care Act, Section 9002 on page 800 states that beginning in the tax year 2011, employers are required to report the value of the health insurance coverage they provide employees on each employee’s annual W-2 Form so that employees can be informed consumers and know the full cost of their plan. The amount reported does not affect tax liability and the value of the employer contribution to health coverage will continue to be excludible from an employee’s income and is not taxable.
Updates and guidance will be posted regularly on the IRS website regarding all tax provisions included in the Affordable Care Act.
Fiction
The government will encourage or force seniors to choose euthanasia as an end-of-life option.
Fact
This has been shown over and over again to be another false rumor. Nothing in the Affordable Care Act requires that seniors participate in consultations about their end-of-life wishes.
Unfortunately, this rumor has been spreading fast and is worrying many Vermonters and Americans across the country. Nothing in the Affordable Care Act will force seniors to have consultations regarding their end-of-life choices, or have a consultation to discuss suicide.
Currently, voluntary end-of-life planning is covered as a part of the “Welcome to Medicare” doctor visits available to seniors with in the first year of joining the program. The Affordable Care Act authorized Medicare coverage of yearly physician exams, or wellness visits for beneficiaries. Specifically, section 4103 of the Affordable Care Act provides coverage under Medicare, with no copayments or deductible, for an annual wellness visit and personalized prevention plan services. Often times patients are not given the time to ask important questions about options available to them such as hospice, or home care, or additional services available to seniors. This provision would simply give seniors the choice to have a discussion during their wellness visit, about the topics of their choosing, with their doctor. It empowers seniors to have conversations about living wills and other questions they might have but do not have the opportunity to ask. In no way does the law mandate these conversations or tell doctors what options to discuss. If seniors do not wish to have these discussions with their doctors and families, nothing will force them to.
Millard Fillmore's Bathtub 
The lie about small businesses has really got a lot of people scared, Ed. A relative of mine who owns a struggling retail store has about six employees and he’s under the impression that he’s going to have to provide each of them with health care or pay a steep, per-employee fine. He certainly cannot afford to provide them with health care, particularly the part time employees.
It’s my understanding that for a small business to be impacted by the mandate, it must have at least 50 full-time employees. Is that correct? I didn’t see that addressed in Senator Leahy’s bit about small business.
Jim
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