Health Care, Obama Care, Health Care Costs

Chances are, you have heard of the Health Care Reform Act known as Obama Care, but the real question is, “How does it impact me?” Does it impact your health insurance? Well, we will all be quite impacted by Obama Care either directly or indirectly. There are 2700 pages of legislation to prove it. Individuals who are not covered by health insurance (either permanent or short term health insurance) by January 1 will be taxed at the end of the year starting in 2014.

According to FactCheck.org:

  • The minimum tax/penalty you could pay is $95.
  • The tax you owe will be phased in from 2014 to 2016. By 2016, the minimum penalty is $695 per person.
  • If you make less than $9,500, you owe nothing. If you make more than $37,000, you owe 2.5% above the level to file a tax return (right now – $9,500 and $19,000 per couple).
  • If you make more than $9,500, but less than $37,000, you will owe $695 by 2016
  • You will never be penalized more than the lowest cost health insurance plan offered by each state health insurance plan purchased through state exchanges.
  • The Congressional Budget Office (CBO) estimates that these policies will cost about $4,500-$5,000/yr. for each person, but that was in 2010.

However, people who decide how much health insurance will actually cost believe the rate hikes will be severe. Mark Bertolini, CEO of Aetna, predicted that a 20 percent increase is a modest estimate. For some people, health insurance premiums would double. “We’re going to see some markets go up as much as 100 percent,” Bertolini told Bloomberg News.

Think about individual health insurance as a public swimming pool. Before 2014, individuals with pre-existing conditions were prevented from entering that pool because they needed extra life guards to keep them from drowning. After 2014, those same individuals will have full access to that pool, which means that the other swimmers will have to help pay for the extra life-guards. Medical claim costs are the biggest driver of health insurance premiums, which means that the healthier people in the pool will have to help pay for the people who are sick.

According to the Agency for Healthcare Research and Quality:

  • Five percent of the population accounts for almost half (49 percent) of total health care expenses.
  • The 15 most expensive health conditions account for 44 percent of total health care expenses.
  • Patients with multiple chronic conditions cost up to seven times as much as patients with only one chronic condition.

Americans have a tendency to wait until a situation impacts them directly to respond. Hopefully, you take time to educate yourself further on this issue, and avoid unnecessary financial penalties due to a lack of planning about your health insurance. If you are currently uninsured, consider a short term medical health insurance policy. It is flexible, inexpensive, and a great solution in the near term until you can figure out your permanent, longer term health insurance needs.