Taxes for prescription drug plansPosted: December 16, 2010
Do you remember the movie Network? It was a while back, 1976, but I remember seeing it with my best friend, Sharon. Sharon and I saw a lot of movies back then but this is one of those that really stuck in my memory. In the movie, Peter Finch plays a newsman who has been fired because his ratings are low. After he’s fired he ends up back on TV with the famous rant “I’m as mad as hell and I’m not going to take it anymore!” Here’s a film clip to help you remember.
Well that’s how I feel about a couple of things that fall into to the health care reform topic. Most of the PPACA topics I’ve written about (so far), I feel pretty neutral about. And I realize I’m going out on a limb here telling you how I really feel (the goal was just to inform you not to tell you my opinion). PPACA (patient protection and affordable care act) snuck one thing in that’s really bugging me. This part doesn’t affect most of us but it does affect those who are on Medicare, enrolled in Part D, the prescription drug portion of the plan, and still have income above $85,000 per year. It’s called the income related monthly adjustment amount or IRMMA.
Part D is the government’s design for the prescription drug plan that was added in 2006. Prior to this, most plans did not cover drugs. Can you image being 80 years old and not having a drug plan? How many 80 year olds, or heck even 40 year olds don’t take at least one medication?
When you are first eligible to enroll in Part D, you must do so or a late penalty is applied when you finally enroll. So here’s what I’m mad about. When you buy a part D prescription drug plan you are paying a premium for that plan. It’s basically an insured plan that follows a basic government design and then insurance carriers can offer improved options for a higher premium. Beginning in 2011, those enrolled in a part D plan will have to pay a tax that’s referred to as a “premium” for part D in addition to the premium they pay for the plan they purchase, if they have adjusted gross income of more than $85,000! Now you may be thinking – but if someone is making $85,000 or more per year (and yes there in an increasing scale based on income) maybe they can afford to pay the tax. And maybe they can, but that’s not the point. Why should someone be taxed again (don’t forget they are paying income tax on their adjusted gross income) on an insurance product they are pretty much being required to pay for?
So maybe it is time to get up right now, go to your window and open it and yell “I’m as mad as hell and I’m not going to take it anymore”!