Monday, November 11, 2013

OBAMACARE: 20 THINGS YOU MAY NOT KNOW

What you may not know about the ACA (Affordable Care Act) or Obamacare is:

1. If you sell your house (permanent residence may have an allowable gain before the tax kicks in) and make a profit, you could be paying 3.8% tax on the gain? This tax also applies to sales of small businesses, stocks, bonds was effective 1/1/2013.

2. If you drive a Cadillac, live in a mansion, but have little non-retirement account income, you can qualify for Medicaid. Why you don't want to be a Medicaid? Many doctors will refuse to take additional patients on Medicaid because reimbursement is low so and with the huge influx good luck. Many people could fall into this category if they retire early. Statistic: surgery patients with Medicaid face a higher risk of dying than patients with no insurance at all. 

3. Taxpayers who earn $200,000, or $250,000 per couple will be paying with higher Medicare Part A payroll taxes and a new 3.8 percent tax on
unearned income (in addition to the capital gains tax).

4. Medicare and Medicare Advantage programs are cut to pay for half of the cost of Obamacare. That means you will get better quality of care on Medicaid than Medicare.

5. The Secretary of HHS has the power to decide what your health plan covers, how much it costs, and what your doctor can do. Doctors will be watched carefully and care can be changed if the HHS doesn't agree. How many young people do you think want to become doctors now?

6. One third of employers plan are expected to drop health insurance benefits because of Obamacare. That means significantly less employees will be covered at work. Those covered will need to tell their employer how much their spouse makes so that the employer doesn't charge the employee too much and have to pay a penalty.

7. Businesses with 50 or more people who don't offer health coverage will pay a fine of the number of employees minus 30 times $2,000 per year. That would be $40,000 a year for a company with 50 employees. So if a company has 49 employees and needs to hire one more, it will cost them $40,000 so it isn't going to happen under Obamacare. Companies with just over 50 employees will be looking for ways to cut staff. 

8. The limit for contributing up to 9.5 percent of family income only applies to the worker's insurance and not for the family. Another words,there is no limit for premiums if you cover your family through your employer's insurance.

9. The ACA awards bonus points to hospitals that spend the least on seniors. It also cuts what doctors, hospitals, homecare agencies, hospice care, and dialysis centers are paid to care for the elderly.

10. Doctors will be paid less to treat seniors than any other patient, even less than Medicaid patients.

11. Deductions for medical expenses are reduced to excess of 10% of AGI from 7.5% starting in 2013.

12. FSAs (Flexible spending accounts) will be limited to $2,500 per year.

13. Only 17% of doctors belong to the AMA. Many have quit since the AMA supported Obamacare. The AMA expects a shortage of 160,000 doctors by 2025.

14. Beginning in 2015, doctors who don't submit a long list of health measurements on their patients will be penalized by losing 1.5% of their Medicare reimbursement which has already been cut. Due to this and the interference on how doctors care for their patients, many are expected to leave their practice. How many remains to be seen. 

15. $11 billion will be spent on health centers to serve illegal immigrants. In addition, anyone whose income status is below 133 percent of the federal poverty line will be treated under emergency Medicaid regardless of immigration status.

16. You are likely to have difficulty finding a doctor who will take Medicaid due to the millions expected to be added and the low reimbursement rate doctors receive as compared to private insurance. Many doctors already limit or refuse to take those on Medicaid.  Unless doctors are forced to take Medicaid patients, then this will only get worse. If doctors are forced and the reimbursement rate does not increase, many more will quit or retire.

17. Your network of doctors and hospitals will decrease with Obamacare (assuming you currently have insurance) so check carefully before signing up.  

18. Drug prices are likely to increase because pharmaceutical companies will be paying approximately $85 billion in fees over the next 10 years to close the "donut hole" in Medicare.

19. It will take longer and longer to get a doctor appointment because visits are expected to increase due to the addition of the uninsured and the decrease in doctors projected. Double whammy. 

20. Your true cost for healthcare is not just premiums. Add deductibles, out-of-pocket costs, medicare that's deducted from your paycheck, 20% of your federal taxes, 10% of your state taxes, and lost income. About 20% of federal taxes and 10% of state taxes that you pay goes towards health care. Lost income is the portion your employer pays on your behalf for benefits which is part of your insurance premiums and half of the medicare payroll deduction. Currently, most employers pay $3,000 - $6,000 on each full-time employee's behalf. Where do you thing the money comes from? If you guessed your salary, you are right. Maybe you wouldn't get the full amount but I'm guessing the average salary would definitely be higher without the health care impact. Add in any 3.8% of capital gains tax you pay in the future for selling investments and property. This all adds up to millions of dollars for the average employee who works 35 years and gets a modest 4% increase a year.  
Just think if you make $65,000 a year and your family health premiums are $6,000 a year, your employer pays $6,000 on your behalf, medicare is $942.5 (1.45%), your federal taxes are $10,000, and your state taxes are $2,000, and you sold $5,000 of stock with a gain of $1,000. Your total healthcare impact is $16,123 [$6,000 + $6,000 (employer portion) + $942.5 +$942.5 (employer portion) +  $2,000 (20% of federal taxes) + $200 (10% of state taxes) + $38 (capital gain)].  This example does not include deductibles and out-of-pocket costs so the number could easily be over $20,000. If instead you could keep all this money and put it in the bank at 4%, you would have over $1.2 million at the end of 35 years. Keep in mind that this does not include increase in premiums or salary (high taxes). The impact would easily put you over $2 million. Is health insurance such a good deal now? What would you rather do? Keep your money or give it to the government? 


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