The Effect of the New Health Care Reform Bill on your Insurance Premiums
The new health care reform bill set up by President Obama is being signed today in the White House after months of being passed between the House and Senate. Now that the bill is passed more people are curious: How will this bill affect my family insurance premiums? My family coverage? My family budget and American families in general?
The health care reform bill has two sets of coverage; items that will take effect immediately (within the next three months to a year) and reforms that won’t take effect until 2014. The health care bill says that by the end of 2014, 32 million more Americans will have medical insurance. However, the bill is projected to cost $938 billion. Where will this money be coming from? Find out below:
The health care bills affect on the average American
- The effect, if any, is unclear as to how the bill will affect rising out-of-pocket medical costs and premiums
- Uninsured families making a combined family income between 133-400% of the federal poverty level (between $29,327-$88,200 to date) will be eligible for premium subsidies through new state-run insurance exchanges
- Starting in 2014, those who do not have the required insurance coverage will pay $95 or 1% of their annual income, whichever is higher. The penalty will rise with the passing of years, reaching a maximum of $695, or 2%, of the annual income
- Families who fall below the income-tax filing threshold will not owe anything extra on their insurance premiums, nor will people who can’t find a policy that does exceeds 8% of their income
- Households making only 133% of the federal poverty level (about $29,327 to date) for a family of four is eligible for the extended Medicaid program available
- Premiums will be capped at a percentage of family income, ranging from 3-9.5%
- Starting in 2013, flexible spending accounts, which allow users to escape taxes on many medical expenses now, will be limited. There will be a $2,500 maximum on accounts that typically carry $4,000 or $5,000 limits now, and you will no longer be able to use the accounts for over-the-counter medicines
The effect of the health care bill on affluent families
- Individuals making $200,000,or couples making an income of over $250,000, will pay an additional 3.8% tax on their investment income (this can mean extra thousands more on taxes)
- These same people will contribute more to the Medicare program from their now non-taxed payroll tax
The health care bills affect on insurance companies
- Eventually, the most expensive insurance policies will be subject to an added tax
- In 2018, employers offering insurance plans with total insurance premiums of $10,200 for singles or $27,500 for families will be subject to a 40% tax on excess premiums. This tax will be on the insurers, but experts say the insured will see this tax in the form of higher premiums or lower benefits
