Obamacare Upheld: How Health Care Reform Will Affect Your Wallet and Your Life

×
HealthcareOn Thursday morning, when the Supreme Court ruled that the Patient Protection and Affordable Care Act -- aka "Obamacare" -- was constitutional, there was a brief pause as the country took a moment to imagine what this brave new world would look like. Had socialism won the day? Were death panels on the way? Would children be roused out of their beds for compulsory morning calisthenics?

Within moments, Twitter was hopping with messages from conservative dissenters such as Michelle Malkin, Ari Fleischer, the Heritage Foundation, and dozens of others, vowing to keep fighting health care reform all the way. But outside the beltway in the rest of the country, many Americans simply wondered how this ruling would affect their daily lives.

Back to the Future

In some ways, the future is already here. Many portions of the PPACA have already been quietly enacted. The government has streamlined the approval process for generic drugs and expanded Medicare's prescription benefit. It has levied a 10% tax on tanning booths, and passed several rules that will make it easier for people with "pre-existing conditions" to get the lifesaving treatments they need. For insurance companies, lifetime limits on coverage, price gouging, and a host of other cost-cutting measures are now illegal.

Slowly, almost imperceptibly, medication is getting cheaper, insurance coverage is getting easier to attain, and a healthy lifestyle is becoming more attainable.

Now, we can expect that over the next few months, more and more of the future will show up. Starting in August, new insurance policies will not be able to charge a copay for many forms of preventive care -- in other words, treatments like colonoscopies and mammograms will be free for patients who open new insurance policies. A few months later, people who make more than $200,000 per year will start having to pay an extra 0.9% tax which will help fund health care.

The Big Changes You'll Hardly Notice

These are little things, incremental changes that most people won't notice, except perhaps to occasionally wonder about when medications got cheaper or why achieving the Snooki look has gotten more expensive. But the big transition, the creeping socialism that Obamacare detractors are really worried about, will arrive in 2014. That's when everyone will either have to get insurance or pay a tax.

The funny thing is, creeping socialism probably won't feel much different than the current system. Imagine, if you will, an ordinary, middle class family. For mom and dad, who work full time, insurance will still be provided through work. They'll still go to the same doctor, pay the same copay, and head to the same hospital when things get dire. Their kids will still get the same care, too, although they'll be able to take advantage of their parents' health insurance until they're 26, if they need to.

As for grandpa and grandma, if they're over 65, they'll still be insured by Medicare, and their lives will largely go on as usual. If they're younger, and suddenly find themselves without insurance -- if, for example, grandpa is laid off from his job -- they will be able to get health insurance in spite of their pre-existing conditions. So grandpa may be stuck working part-time as a Walmart greeter, but he won't have to worry about paying for his insulin and blood pressure meds.

The Big Changes You Will

But what if grandpa's new job doesn't pay much and he can't afford insurance? Well, the new law may still cover him. One aspect of PPACA is that people who make up to 133% of the poverty line -- for a household of two adults and one child, this would be $23,344 -- would be eligible for Medicaid at no cost. Meanwhile, families that make up to 400% of the poverty line -- for a household of two adults and one child, this would be $70,208 -- would be eligible for some form of discounted insurance rate, scaled to their income.

So mom and dad, grandpa and grandma, and the kids are covered. What about Uncle Hank, the uninsured rebel with the ponytail and the motorcycle? Well, assuming he makes more than 400% of the poverty line, Hank's going to face a tough decision: He can either get insurance or pay a tax that will probably be slightly higher than the cost of insurance.

Hank might be able to get insurance through his work, but if he can't, the new law will give him another choice. It requires each state to create a health insurance exchange -- basically, an online marketplace where various insurance companies can directly compete with each other. Here are some proposals for Minnesota's health insurance exchange.

If Uncle Hank decides not to pay the health care tax, he would likely go to the exchange, pick a plan, set up a direct deposit program to take money from his paycheck -- much like the health insurance withholding that mom and dad pay -- and get an insurance card. And, later, if Hank gets into an accident on his bike, his insurance would cover his trip to the emergency room, as well as his ensuing operation and physical therapy.


The Winners and the Losers

So who wins and who loses under the new insurance program? For insurance companies, it's going to be a mixed bag: On the plus side, they will get millions of new, relatively young customers like Uncle Hank who will be cheap to insure, and will add mightily to their coffers. On the opposite side, they'll also get millions of older, low-income customers -- like grandpa and grandma -- who will be expensive to insure, and will have pricey pre-existing conditions. Overall, the insurance companies will probably make a tidy profit.

For the poor, the chronically ill, and the unemployed, the new insurance program will also be a definite win. Millions of people will be able to afford basic health care, get diagnostic tests, and buy medications. Many will be covered by an expanded Medicaid program, and those who aren't will likely see a steep drop in the cost of insurance.

For the average taxpayer, the new program will also be a win. Right now, a lot of the basic health care in America takes place in emergency rooms, where uninsured people end up when their colds turn into pneumonia, their untreated diabetes turns into a coma or an amputation, or their unmedicated high blood pressure leads to a heart attack. Many of these emergency rooms are already receiving taxpayer dollars. Preventing major, expensive health crises while they are small, inexpensive-to-treat problems saves everyone money.

In fact, the biggest losers of the new health care program will be folks like Uncle Hank, who previously didn't worry about health insurance, but will now have to pay for it. On the other hand, many will now have access to preventative care and basic medical care that were previously unavailable. Speaking as someone who once had to pay over $1,000 out-of-pocket for the treatment of a broken hand, I'd argue that mandatory health insurance might be an unwelcome prescription, but it is hardly unnecessary medicine.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

Increase your money and finance knowledge from home

What is Inflation?

Why do prices go up?

View Course »

Introduction to Economic Indicators

Measure the performance of the economy.

View Course »

Add a Comment

*0 / 3000 Character Maximum

862 Comments

Filter by:
KatD

I just went to http://healthreform.kff.org/SubsidyCalculator.aspx to calculate what my insurance premium will be in 2014 when Obamacare is fully implemented. My cost will be $8,687 per year or $723.92 per month. This figure is calculated on the "silver premium". I could save money with the bronze plan but I don't know the cost for that and from what I read, the coverage is poor at best. I am a middle class single woman (49 years old currently) with my own home. I currently pay $2,268 per year for a health insurance plan with a $5,000 deductible (once the deductible is met, additional costs are paid at 100%). I also contribute the maximum amount to my HSA. I use my HSA to pay for vision exams, contacts, glasses, visits to the doctor, dental care and "once in a blue moon" prescriptions. From what I understand, high deductible plans will be taken away and the maximum deductible offered will be in the neighborhood of $2,000 or $2,500. HSA's might also go by the wayside. This will force me to buy insurance through the exchanges. There are only two employees where I work and no health insurance is offered. Under Obamacare, my premium will increase $6,419 per year ($534.92 per month) and I will no longer be able to set aside money for the things I currently use my HSA for. I have never been a burden to the health care system and have been a contributing member of society since I was 14 years old. I now find myself in a position where I won't be able to afford health insurance and I am literally in tears as I write this. I'm praying that someone will tell me I'm missing something here. I would be very happy if my logic is flawed somehow because I simply cannot handle an increase this huge.

November 12 2012 at 2:22 PM Report abuse rate up rate down Reply
1 reply to KatD's comment
mcwhomper

my health care is through my wifes plan at work she pays over 100 dollars a week to have me on it plus i pay another 100 to medicare for plan b all obamas health care does for me is cost me money to make sure all the dam illegals coming into this country with aids and everything else thier country don't want to pay for can be paid for by me,people with conditions that have lost thier insurance because of job lost or because of retirement should be able to get insurance either medicare or medicaid or a reasonable plan that doesn't just take your money but when you need it high deductables and other loopholes insurance uses to not pay should be cut out, but paying for somebody elses problems isn't right either. we need to stop people from coming into this country because we are saps that give them everything when our own people get screwed to pay for it. i had some neighbors that sued shaws or some other store for a slip and fall and thats the way they made a living they were immagrants but at least they were not right off the boat ,but it still costs the rest of us that this is the way they use the system. oh just one more thing the people i'm talking about are not the only ones that hurt us the aclu just got the family of a man that died in jail 4 million dollars can you tell me how a dead prisoner could possibly earn that much in or out of jail

December 14 2012 at 4:35 PM Report abuse rate up rate down Reply
lillycoolwhite2

Well I don't have health insurance because I can't afford it and I would have never got my money back anyway. All the money that's paid into insurance whatever kind it is is never gotten back. I can't afford obamacare either. But no one cares.

November 10 2012 at 3:36 AM Report abuse -1 rate up rate down Reply
idler283

One area that this article did not talk about was the small business that is forced to pay healthcare costs for their employees( if they employ 50 or more.) I own a service industry franchise and consider myself a successful business. If you put the monthly cost for employers at a conservative $400 per month/per employee that would total $20,000 per month (240,000 annually)! I would be out of business that day! And all of my employees would be on the unemployment line. If I owned a business with just under 50 employees, then I would be unable to grow my business because of the healthcare law. In other words, this bill would kill job growth and if you owned a business with over 50 workers, then you would be faced with lowering your work force to under the 50 mark, which further adds to the unemployment line. The bottom line is that there are thousands of small businesses across this nation that can\'t even come close to being able to pay for their employees healthcare! Unfortunately, the Obama administration didn\'t think about that!

September 25 2012 at 5:01 PM Report abuse -2 rate up rate down Reply
2 replies to idler283's comment
Ross Moore

If you have more than 50 employees you also have the option of not providing health insurance and paying the $750 fine per employee correct? Now excuse me if I'm wrong I'll admit I just started educating myself on this subject (not being a smart ass either). That comes out to $62.5 a month per employee, or if they're full time 36 cents per hour. So instead of closing your business you could propose a pay cut of 36 cent's an hour to your employees and keep everyone working and productive? Or another depressing option you could cut your labor cost by $3,125 a month. Maybe you can't afford to cut back labor, which in my mind would project a strong business maybe able to increase the hourly rates of it's employees by 36 cent's an hour? Would a company experience growth really shut down operations in the face of the potential tax? Questions that come to mind, how many business's that have more than 50 employees already provide insurance and what would their savings add up to? Are there more business's out there whom would benefit from this program than would be hurt by it? I just want questions answered instead of on sided claims with no substance. Any feedback would be appreciated!

October 24 2012 at 6:04 AM Report abuse +2 rate up rate down Reply
MCar

Typical republican elitist propaganda. Not supported by any facts whatsoever. You have two options, 1) Show your employees the respect and pay for the health benefits they deserve for putting money in your pocket.. 2) Go out of business.

November 19 2012 at 9:00 PM Report abuse rate up rate down Reply
qcd@foxvalley.net

Obamacare can cause YEARLY FINANCIAL DESTRUCTION for
pre-Medicare retirees

I just learned a very disturbing "fact" about this that can
cause DISASTROUS results for retirees (no W-2) with
(forced:2014?) health insurance (pre-Medicare).

Although you can no longer be discriminated against AND DENIED,
if, as a family of 2, age 60, your 1040 new ACA MAGI

(l37+-?; need an EXTREMELY PRECISE (!!!) definition of this)

exceeds $60,000+/yr (@ 400%FPL; $45K+/yr if 300%FPL is enacted),
not only do you lose any tax subsidy/credit, but your estimated
health ins premiums INCREASE BY ABOUT SIXTEEN THOUSAND DOLLARS,
EACH YEAR!!!

You may be FORCED to drop coverage and pray, AND pay the penalty
tax ($700+ each? in 2016), EACH YEAR REMAINING!

This is based on a table in the KFF subsidy calculator:

http://healthreform.kff.org/Subsidycalculator.aspx#incomeAgeTables

Tables by Income as Percent of the Poverty Level and Age, 2014
What the Person/Family Pays
Age 20 30 40 50 60
375%FPL 8345 8345 8345 8345 8345
400%FPL 8901 8901 8901 8901 8901(*)
425%FPL 9139 10108 12130 16858 24042(*)

(*) my simple math says the premium nearly TRIPLES!

If you now pay 10% of income (no cost-sharing), then
A THIRD OF YOUR INCOME WILL GO TO HEALTH INSURANCE & costs,
an investment that may NEVER pay off!

A caveat: I'm not sure how many is in this "Person/Family";
the calculator only allows Single and Family of 4. But this
URL talks of something similar, increasing $10K (SIX-FOLD!)
if over the limit:

http://bobmccarty.com/2009/12/09/health-care-bills-contain-huge-marriage-penalty/ :

THIS IS ABSURD! $1 more and it's a CATASTROPHE! So, some ways
to (I can't believe I'm saying this!) MAKE LESS INCOME to keep
you under this EXTREMELY CRITICAL (!!!) limit:

. REMOVE money from BANKS before 2014 to avoid interest (as
small as it is; coincidence?)
. SELL STOCKS before 2014 to avoid dividends and forced capital
gains (a la NICOR last year)
. MAKE LESS PROFIT in any company via 1040 Sch C (take more
UNPAID vacation, or QUIT) or Sch E
. you may NO LONGER HAVE A CHOICE when to start Social Security
income (you may have to wait until Medicare!!!)

or possibly reduce your reported income:
. make an IRA contribution (max $6K?)
. use an HSA

The best doc I could find on this is:

http://healthreformgps.org/resources/tax-subsidies-for-individuals-and-families-who-purchase-coverage-through-state-health-insurance-exchanges/

which also raises MANY issues, such as "excess advance payments",
and the "marriage penalty" (married couples must file jointly).

If all this is true, then I think this is important enough to let people know
what could happen, in that, as Moe Syzlak of Simpsons fame has said:
you may get "the Joan Collins special".

August 09 2012 at 3:59 PM Report abuse rate up rate down Reply
Robin Groves

> All this degrading hooie about Romney, Palin, Bachman or any other conservative gets posted. But any negative comments about the Potus, AJ or the rest of that scuzzy crew never post! So much for Free Speech! >

Free Speech means that the government cannot tell you what you can or cannot say. You are allowed to say whatever you please, and you did. A private website posting what it wants has nothing to do with Free Speech.

August 08 2012 at 2:34 AM Report abuse rate up rate down Reply
B L

On what planet do you believe this will occur? Thousands of additonal government employees and hundreds of new regulatory agencies will not and cannot decrease the costs of any services. PERIOD. Additonal taxes and mandatory health-care will drive the already overburdened into additonal debt, likely resulting in more job loss and continued higher unemployment. I will not pay government-mandated health care nor will I pay a penalty. Once we start down this road of requiring citizens to buy government-mandated products and services, there is no stopping the avalance of continued government control.

July 22 2012 at 3:44 PM Report abuse -1 rate up rate down Reply
lkwms8253

And what is up with the Huffington Post? All this degrading hooie about Romney, Palin, Bachman or any other conservative gets posted. But any negative comments about the Potus, AJ or the rest of that scuzzy crew never post! So much for Free Speech! Its not against the law to be rich and have your money off shore so our Socialist/Commie government can't get it hands on it. Even Debbie Wasserman-Schultz D-Fla knows this and has her wealth protected. Its none of your damn business how much money I make or Romney makes people!

July 13 2012 at 3:30 PM Report abuse rate up rate down Reply
lkwms8253

Affordable Healthcare Act my aching backside! Nobody wins and the taxpayer gets shafted again! I am going to retire at 62 in 3 years and my wife and I will not be paying 5k for worse HC insurance than we have now. There is a revolution coming in November. Slackers and bums are going to get a real job with real benefits or do without. I'm sick of taking care of worthless pukes that have never worked. It is going to stop! SSI was not set up for your fibromyalgia or your retarded kid. It was set up for people that pay into a "system" that worked their whole life not Commie/Socialist scumbags!

July 13 2012 at 3:23 PM Report abuse -4 rate up rate down Reply
2 replies to lkwms8253's comment
kafrench34

My my are we a little angry or what? So you think only people who paid into the system deserve help? Well most people have you idiot-or their parents did to cover the retarded kid you're referring to!!! Some people have health problems that may stop them from working. SSI doesn't pay crap anyway-can you live on $800 a month? Lets stop demonizing people with serious health problems or diseases-someday it may be you!!!! I know there are a few that try to take advantage of the system but most would rather contribute to society. We are the richest country in the world and we have the most expensive health insurance and sub-par care for what we pay!!! Something needs to change. How about a graduated system according to your income-like SS works but not let the stupid govt. control it.

July 15 2012 at 4:04 AM Report abuse +1 rate up rate down Reply
1 reply to kafrench34's comment
Joe Ripp

Lets see train and hire 15,000 IRS agent and no doctors add 30,000,000 to current system no new hospitals . HMMM yup sounds like rationing of healthcare is on the way!

November 11 2012 at 2:04 PM Report abuse rate up rate down
R. Polecat

How's that revolution working out?

November 21 2012 at 8:52 AM Report abuse rate up rate down Reply
Forget the hysteria.

This article is not giving me the key piece of useful information. I care about 1 thing; If i have to buy insurance for a family of 4 because I am a consultant or a temp or do not get insurance through work, how much will it cost me a month?

More and more Americans are working as contingent labor (consulting and temping, or in a sole proprietorship), right now to buy health insurance for a family of 4 as an individual costs about $20,000/year.

July 12 2012 at 5:08 PM Report abuse rate up rate down Reply
1 reply to Forget the hysteria.'s comment
amyliving

Here is a website that can give you that information: http://healthreform.kff.org/SubsidyCalculator.aspx. It's only an estimate, of course, because your costs will depend on factors like where you live and what level of coverage you choose, but it can give you a rough idea.

August 01 2012 at 12:46 PM Report abuse rate up rate down Reply
walterlippmann

This guy is so far in the tank for Obama you can't trust a word he is saying here. He's just parroting the Administration's talking points. He keeps talking about all these things that are now going to be 'free' for people with health insurance. Nonsense. All these new mandates and requirements for health insurance are simply going to drive the cost of getting insurance higher and higher. Too high in fact for small businesses (and many larger ones) to afford. Meanwhile, tax money is going to subsidize health insurance costs for people making as much as $80,000 for a family of four! This is a formula calculated (deliberately I would suggest) to drive private insurers out of business altogether. Remember, the original plan had a 'government plan' option that was simply the tip of the iceberg for more government intervention in health care. The biggest losers will be the American people who will have to swallow this unwieldy, massive program to solve problems that are little more than red herrings.

July 12 2012 at 11:43 AM Report abuse rate up rate down Reply