April 16th, 2013

March 2010, by a vote of 219 to 212, The House passed the Patient Protection and Affordable Care Act (PPACA), coupled with the Health Care and Education Reconciliation Act. No Republicans voted for it and 34 Democrats voted against it.

ObamaCare, as the laws are coined, will be completely phased in by January 2016. The laws were intended to reduce the number of Americans without health care coverage and to reduce overall costs of health care insurance.

Goals were to be reached by eliminating requirements for pre-existing conditions and lifetime limits for health insurance coverage, making health insurance affordable and easier to obtain through Health Care Exchanges, providing insurance subsidies, and extending coverage for young adults.

Has the federal government decreed a health care plan with too costly results?

When Obama campaigned for president in 2008, he promised his health reform plan would bring down premiums “by $2500 for the typical family” by end of his first term.

The nonpartisan Congressional Budget Office projects Obamacare will only slightly alter the federal deficit over the coming decade. In a February 2013 report, Real Clear Politics, Ben Domenech reports the CBO believes ObamaCare “will be more expensive than the Obama administration thought, disrupt the marketplace more than they thought, and be tougher to implement than they thought.”

Health care reform is expected to cost $940 billion over the coming decade, but it appears this estimation should be much higher. Where will these monies come from? We are paying for ObamaCare with increased taxes, penalties and decreased benefits.

9 realities about ObamaCare and costs

  1. PPACA includes a 2.3% tax on gross sales of medical devices, which is expected to raise approximately $29 billion within 10 years.
  2.  A health insurance tax of $100 billion (Forbes) will result in increased premiums
  3. Included is a mandated tax on branded prescription drugs based on the drug manufacturer’s total share of the market.
  4. Individual Flexible Spending Accounts will be reduced by half, from $5000 to $2500. This cap will directly affect parents and special needs children.
  5. The percentage of medical deductions allowed shoots from 7.5 percent to 10 percent of adjusted gross income.
  6. Investment income incurs a 3.5 percent surtax.
  7. Americans without health coverage will pay a 1 percent tax in 2014, and a 2.5 percent tax in 2016, that adjusts over the term with inflation.
  8. The law eliminates a tax deduction for employer-provided retirement prescription drug coverage coordinating with Medicare Part D
  9. Companies with more than 50 employees would be required to pay a fee of $2000 per employee if they fail to provide coverage.

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ObamaCare is not going away. As the largest body of legislation on health care since 1965’s enactment of Medicare or Medicaid, we should expect to learn what we can to be prepared.

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