What does it mean for now, for later … and for you?

The debate goes on but seems to have gotten so boring that the news media has forgotten about it.  This is probably because it has little or no affect on most people in the immediate future.  A few nice, but non-consequential, things take place now to make it sound better.  The hard stuff doesn’t really become noticeable until after the mid-term elections.  It is not until then, and the following 48 months, that most people will be affected, and not necessarily in a good way.

photo credit: Fibonacci Blue

On March 23, 2010, President Obama signed “historic” health care legislation into law following a year-long struggle with congress to follow through on what was a pivotal piece of his administration’s domestic policy agenda.  The most “historic” thing about it was that it was something the majority of the American people did not want passed, but it got passed anyway by a totally partisan vote.  The rules for passing such wide sweeping changes were themselves swept under the rug and true Washington D.C. corruption … “Chicago style” took over.

Who is this bill Really for?

“I am signing this bill for all the leaders who took up this cause through the generations,” said President Obama, “from Teddy Roosevelt to Franklin Roosevelt, from Harry Truman to Lyndon Johnson …”  That may sound good in a tele-prompted speech, but the real reason he signed it was to try to salvage his own political future.  He used every type of leverage and political capital he had available, including bribery, extortion.  There is one person, and one only person, he signed it for.

But, with that said, what does it mean?

What Obama signed may not include all the provisions and changes you think it does.  Many alterations have been made along the way and, at this point, many Americans are unsure of exactly what the AHCA Act entails.

What changes are slated for 2010?

The “immediate” changes include:

1. Extending the length of time a child can remain on his/her parents’ plan – through age 26 (ending on the child’s 27th birthday).
   
2. Children can no longer be denied coverage due to pre-existing conditions.
3. Policies can no longer be rescinded by insurers when a person becomes ill (unless fraud or misrepresentation is proven).
   

In the immediate future that really doesn’t mean much because most people’s insurance options haven’t yet changed.  But, believe me they will.  In order to accommodate those kind of changes premiums will go up!  No where does it say in the bill that those changes are provided free by your insurance company!

What changes are slated for the future?

Some of the most sweeping reforms won’t take effect for a few years.  The biggest thing that has everyone buzzing involves required health care insurance.  Beginning in 2014, Americans (except those with religious objections, inmates and Native Americans) will be required to have health insurance coverage … or face an annual “penalty“.  The only good thing is that the penalty cost less than the actual insurance, and if you get sick you can go ahead and buy insurance after you have a problem, since they can no longer deny you coverage for pre-existing conditions.  That may be the best option.

And what about taxes?

The other big thing getting buzz involves tax increases: a new tax which starts in 2013 – a 3.8% tax on investment income for individuals earning more than $200,000 and households earning more than $250,000.  That doesn’t mean to say that people making less won’t also pay also.

Where can you get more information?  The White House has provided a website but, it is the last place I would look for an honest unbiased view.  You can visit whitehouse.gov/healthreform .  Just remember this is a very one-sided, slanted view of the bill, and does not give a fair representation of what it really means.

Is it settled?

Nope.  Amendments to the bill have already been proposed, and Attorney Generals from more than 14 states have filed a lawsuit claiming the new bill is unconstitutional.  Justice Department spokesman Charles Miller, however, is “confident that this statute is constitutional”.  Nothing would surprise me.

For it or Against it, one thing for sure … the way this was passed is the is the most corrupt action I have ever observed.  When one party, either party, controls both the House and the Senate as well as the White House there is no check and balance.  Corruption occurs.

Bribes and extortion  are not unconstitutional … they are criminal.  But, … someone has to initiate a unbiased investigation and that ain’t gonna happen.  That is reserved for the important stuff like Sarah Palin, Major League Baseball, and airport restrooms.  It’s time to take care of things at the voting booth.  Wait a minute isn’t that what happened last time?  Papa B.

If your company goes bankrupt what happens to your Pension?  Will you be left out in the cold?  Will the money you have been counting on for your retirement be gone?  Will you be forced into continuing to work, or even worse, be forced into returning to work after you have already retired?

Safeguards Against Losing Your Pension Plan

Fortunately, it is not as bad as most people think!  There are safeguards in the United States to prevent you from losing your pension plan.  In the United States every defined-benefit retirement plan is insured, at least to a point.  Most will receive all or at least most of their company pension even if your company goes bankrupt.  However, in some cases,  it may not be every penny you expected.   

What Happens When a Company Goes Bankrupt?

When a company goes bankrupt they have two choices.  They can reorganize and try to stay in business by reducing costs and attracting new investors, or they can liquidate.  The pension plan is usually terminated in reorganization and always terminated in liquidation.  So, then what happens?  A federal insurance agency called the Pension Benefit Guaranty Corporation (pbgc.gov), takes over the pension payments.  Only employees with the largest pensions actually take a hit.  The Pension Benefit Guaranty Corporation maximum annual payment, which rises with inflation, is $54,000 this year for workers who retire at age 65.  As with any insurer, the PBGC has some restrictions.  For example, it prorates recent pension increases.  However, in all, 84 percent of retirees get their full pension even after bankruptcy.

A Few Rare Cases Under Reorganization

In a few rare cases of a company bankruptcy reorganization, the employer maintains the its pension plan.  That normally only happens for one of three reasons.

1. The benefit is low
2. Employee turnover is high
3. The pension plan is new

Avoiding Bankruptcy is Better For The Company.

In most cases, however, it is always better for the company to avoid bankruptcy altogether.  In December of last year, Congress gave some help in this direction by relaxing the 2006 Pension Protection Act‘s strict rules governing pension funding.  As counter intuitive as it may seem, this is one move that endangered workers should embrace.  As a result of this move, according to Dallas Salisbury, president of the non-partisan Employee Benefit Research Institute, ” Given the economic downturn, employees are better off than if the company was forced to make a large pension contribution”.  “It’s better to stay in business than make a pension contribution”.

How Does This Affect Me?

I am actually receiving a pension from a large company that is not bankrupt.  I have been asked by many of my friends what will happen if the company I retired from goes under during these difficult times.  Thankfully, as a result of the above protections, I can answer them …  as far as my pension goes … not much!

Protection For Health Care Benefits Are Not The Same!

I wish I could say the same for the medical benefits.  They are not nearly as well protected.   In my last few years of employment, the cost of  health care benefits for retirees, which at one time were an excellent value were increased to the point where it was not affordable to maintain.  I was forced to purchase a private plan to hang in there until age 65 when Medicare kicks in!  It is my single largest monthly expense.  It’s not often you wish you were older but when it comes to health care insurance I can’t wait until I’m 65.  Papa B.