by Russ Wiles - Jul. 28, 2012 05:48 PM The Republic | azcentral.com

Now that the Supreme Court has upheld the Affordable Care Act, it's time to start picking through the details. Several key tax rules are scheduled to change in 2013, especially for higher-income individuals.

Republicans are still trying to overturn the law, and that could happen based on what transpires in the November election. But if nothing changes, here's what to expect in terms of the health-related tax impact, with focus on items that apply to individuals rather than businesses:

New Medicare tax. Higher payroll withholding is on the horizon with the introduction of a 0.9 percent tax starting in 2013. It will hit people with earned income exceeding $200,000 for singles and $250,000 for married couples filing jointly. That's in addition to the current Medicaid tax of 1.45 percent.

New investment-income tax. The legislation also imposes a 3.8 percent levy on interest, dividends, some rents and other unearned income for people above those $200,000/$250,000 income levels. This levy, also designed to support Medicare, starts in 2013.

"This 3.8 percent tax would be on top of any increase in the dividends/capital-gains/ordinary-income rates that (take effect) ... upon expiration of the Bush-era tax cuts at the end of 2012," according to tax-researcher CCH.

Top rates rising. That 3.8 percent Medicare addition plus scheduled regular-tax increases mean the top effective rate for high-income earners could go from the current 35 percent to 43.4 percent in 2013, said Jason Miller, manager of financial planning at Harris Private Bank in Scottsdale. The capital-gains rate could go from a top 15 percent this year to 23.8 percent next year.

Harvesting or prematurely locking in capital gains, normally an unwise strategy, could make sense, Miller added. So could accelerating income into 2012 rather than deferring it, if possible. In one strategy cited by Mark Luscombe, principal analyst at CCH in suburban Chicago, you might opt to convert a regular IRA into a Roth, paying the applicable taxes at this year's lower rates and thereby securing tax-free withdrawals in future years.

Incidentally, selling a home for a large capital gain after this year could be costly, since the gain could increase net investment income and boost adjusted gross income above the $200,000/$250,000 threshold amounts. However, most people won't face the tax on a home sale, as individuals still will be able to shelter up to $250,000 and couples $500,000 in gains on the sale of a primary residence, said Luscombe.

In other words, the new 3.8 percent tax applies to housing capital gains above the $250,000/$500,000 limits only if your income exceeds the thresholds.

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Health-care act to have tax impact

With the looming implementation of health care reform, many Napa County residents have begun to wonder how the new federal law will impact their lives and businesses.

The U.S. Supreme Court upheld the Obama administrations Patient Protection and Affordable Care Act, often referred to as Obamacare, in June on a 5-4 vote. The law will require almost every American to have health insurance by 2014 or pay a penalty.

While most Napa County residents agree that its good for everyone to have health coverage, many are divided on the law itself. Some say its too weak and they would prefer a single-payer health care system or Medicare for all. Others say the law goes too far and that the governments involvement in health care will do more harm than good.

Seven Napa County residents recently shared their opinions on health care reform and how they will be personally affected by the Affordable Care Act.

Ken Allen, 56

Napa resident and volunteer for the Napa Valley Museum

Ken Allen said health care is a human right and its an abomination that so many people are unable to afford care.

Allen has received health coverage through Kaiser Permanente for about 12 years.

He first became covered through his employer. After losing his job through company-wide layoffs, Allen continued with Kaiser through COBRA and Cal-COBRA, which extends an employers health insurance for 36 months after someone becomes unemployed. Once his Cal-COBRA coverage ran out, Allen said he chose to stick with Kaiser even though purchasing a policy as an individual more than doubled his monthly premium.

I think Kaiser is revolutionary in how they do things, Allen said, describing the health care provider as a one-stop shop.

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Making sense of health care reform

1:00 AM The approach wins praise and makes sense, but the U.S. health care system seems to work against it.

By LISA M. KRIEGER San Jose Mercury News

click image to enlarge

Karen Gossage, a palliative care nurse, listens to the lungs of Marilyn Cronin, 58, of Soquel, Californa, who suffers from emphysema and liver failure, at her home this month.

Dai Sugano/San Jose Mercury News/MCT

WHAT IS PALLIATIVE CARE?

Palliative care -- from the Latin "palliare," which means "to cloak" -- grew out of the hospice movement of the 1970s.

It is care that helps patients with life-limiting illness in their final years. Its managers guide patients through difficult choices in planning for care and treatment and managing symptoms and spiritual, social and psychological issues.

Palliative care sharply contrasts in cost and patient experience with the prevalent end-of-life care in hospitals. Many studies confirm the high costs of physically and emotionally draining treatment for failing elderly people.

A study of the deaths of 5,158 elderly by UC San Francisco's Dr. Alexander Smith found that more than half had gone to the ER in the last month of their lives. Two-thirds went in their final six months. (Health Affairs, June 2012)

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Palliative care: A softer touch eases last years of life

RIVERSIDE, calif.In the Inland Empire, an economically depressed region in Southern California, President Barack Obama's health care law is expected to extend insurance coverage to more than 300,000 people by 2014. But coverage will not necessarily translate into care: Local health experts doubt there will be enough doctors to meet the area's needs.

Other places across the country, including the Mississippi Delta, Detroit and suburban Phoenix, face similar problems. The Association of American Medical Colleges estimates that in 2015, the country will have 62,900 fewer doctors than needed. That number will more than double by 2025, as the expansion of insurance coverage and the aging of baby boomers drive up demand

The Daily Dose prescribes an enriched mix of news, features, consumer issues and in-depth followups to The Denver Post's coverage of medicine and health care.

Health experts say there is little that the government or the medical profession will be able to do to close the gap by 2014, when the law begins extending coverage to about 30 million Americans. It typically takes a decade to train a doctor.

"We have a shortage of every kind of doctor, except for plastic surgeons and dermatologists," said Dr. G. Richard Olds, dean of the new medical school at the University of California, Riverside, founded in part to address the region's doctor shortage. "We'll have a 5,000-physician shortage in 10 years, no matter what anybody does."

Experts describe a doctor shortage as an "invisible problem." Patients still get care, but the process is often slow and difficult. In Riverside, it has left residents driving long distances to doctors, languishing on waiting lists, overusing emergency rooms and forgoing care.

"It results in delayed care and higher levels of acuity," said Dustin Corcoran, the chief executive of the California Medical Association, which represents 35,000 physicians.

People "access the health care system through the emergency department, rather than establishing a relationship with a primary care physician who might keep them from getting sicker," Corcoran said.

In the Inland Empire, encompassing the counties of Riverside and San Bernardino, the shortage of doctors is already severe. The population of Riverside County swelled 42 percent in the 2000s, gaining more than 644,000 people. But the growth in the number of physicians has lagged, in no small part because the area has trouble attracting doctors, who might make more money and prefer living in nearby Orange County or Los Angeles.

Moreover, across the country, fewer than half of primary care clinicians were accepting new Medicaid patients as of 2008, making it hard for the poor to find care even when they are eligible for Medicaid. The expansion of Medicaid accounts for more than one-third of the overall growth in coverage in Obama's health care law.

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Doctor shortage to strain system after health-care law hikes demand

A top state official trying to hold down health care costs says she's happy to have begun a public discussion on the issue. But Commissioner Becky Hultberg of the Department of Administration is also challenging those who have questioned the proposals.

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Health care cost fight off to good start

Patients with cancer, unstable heart disease, uncontrolled diabetes they all show up at Southwest Boulevard Family Health Care looking for help.

To reach Alan Bavley, call 816-234-4858 or send email to abavley@kcstar.com.

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Drive to expand Medicaid is stalled