So what can we expect from the new health care legislation?
After all the hoopla, what really has changed in health care? Tanning salons will be charging a 10% Federal tax, and Medicare recipients will begin receiving “donut hole” rebate checks. But what else has changed?
For right now, not much. Most of the public policy changes don’t kick in until after the next presidential election. Part of that is smart policy; after all, you need to give people time to plan for the changes. Part of that is politics; allowing voters a chance to consider the bill during the next election cycle.
But some of the provisions—eliminating lifetime or annual insurance benefit caps, or mandating coverage of pre-existing condition—will begin in September. And many people will see the results of these mandates in the cost of their insurance next January, just in time for the mid-term elections
And there lies the rub. No one really knows how voters will react. It’s unlikely that the economy will be a lot better. But higher premiums could kindle voter anger against the insurance companies—or against Congress.
Whatever that outcome, one thing is certain. More change.
Douglas R. Tengdin, CFA
Chief Investment Officer
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