If you are like me, you have heard quite a bit lately about our new national health care system, but you are probably uncertain about how it will impact you individually. I did some research on the subject so I am anxious to share my findings with you.
First off, starting January 1, 2014, all citizens of our country, unless specifically exempt, must acquire health insurance coverage for themselves and their dependents, or they will be assessed a penalty in the form of a federal tax. Exceptions apply to those of low income, members of certain religious orders and certain clergymen, members of Indian tribes, incarcerated individuals and other select groups.
The penalty for not having insurance coverage starts out at $95 per family member or 1% of income over the minimum filing level, whichever is more, in 2014. This will increase to a minimum of $695 ($2,085 per family) or 2.5% of income over the minimum filing level in 2016. You must not be uninsured for more than three months during the year to avoid the penalty.
Individuals that do not have health insurance coverage through their employer will be required to purchase it on their own either through private insurance companies, or through insurance exchanges set up by the government. Low income individuals and families may qualify for a credit against their income tax if they purchase coverage through a government insurance exchange.
Employers who have more than 50 full-time employees will be required to offer health insurance coverage to their work force, or be subject to an annual tax of $2,000 per employee. Enforcement of this provision, originally slated for 2014, has been pushed forward until January 1, 2015 for largely political reasons.
Insurance companies are required to spend eighty percent of the premiums they collect on medical reimbursements starting in 2012, or refund that balance back to members. That is why many of us received an insurance rebate this year. Insurance rebates are taxable if you deducted the medical insurance premiums on your individual tax return.
Benefits for insurance holders include a prohibition against non-coverage or excessive premium cost for those with preexisting conditions, affordable insurance rates, the elimination of co-pays for certain preventative care procedures, and the elimination of caps on coverage based on cost or length of treatment.
The potential negative effects of Obamacare have yet to play out. Many argue that employers will convert full-time employees to part-time to avoid having to provide insurance coverage. And those employers who are required to provide coverage will opt out and simply pay the penalty as it will be cheaper that providing coverage.
Insurance companies may find it difficult to earn a profit in the face of rising costs and troublesome government regulation, which may lead to their demise. Some argue that this will force large numbers of insurance holders into government exchanges that will eventually lead to nationalized health care, with the government overseeing virtually every aspect of our health care.
It is too soon to predict how all of this will play out. Personally, although I do not support Obamacare as it is designed currently, I welcome the government getting involved in our health care. Anyone who has gone in for an MRI recently, a procedure that takes about fifteen minutes, and then received a bill for $6,000 knows that there is something seriously wrong with our health care system.
Obamacare may represent more of a political maneuver to expand the authority of our government, rather than a genuine attempt to help our citizens better afford health care. But at least someone is trying to do something to stem the tide of the outrageous cost of health care in this country.