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How Much is the Obamacare Mandate Going to Cost You

How Much is the Obamacare Mandate Going to Cost You

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Published by apackof2

How Much is the Obamacare Mandate Going to Cost You by Forbes

Grassroots in Michigan Research www.grassrootsmichigan.com

How Much is the Obamacare Mandate Going to Cost You by Forbes

Grassroots in Michigan Research www.grassrootsmichigan.com

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Categories:Types, Research
Published by: apackof2 on Feb 11, 2013
Copyright:Attribution Non-commercial


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(Photo credit: Mike Licht,NotionsCapital.com)
So just how much is that new ObamaCaretax going to cost you? For some people, alot more than you have been hearing.The individual mandate section of thehealth overhaul law outlines the structureof the “taxes” that must be paid by those who don’t buy government-approvedhealth insurance – starting at $95 a yearthe first year for individuals. Many peopleare thinking it will be much cheaper tosimply pay the tax than to buy policies that will cost thousands of dollars more.
Most news reports have emphasized
that refusal to comply with the health insurance mandate subjects these“scofflaws” to a “modest fee.” But some citizens could face much higher taxtaxes — $12,000 a year or more — for failing to comply.Revealing one of the many inconsistencies in the Supreme Court’s decision onObamaCare, the syllabus of the decision says that “The payment is not so highthat there is really no choice but to buy health insurance.” But, in fact, theannual tax will eventually for many people equal the cost of an expensivehealth insurance policy. According to a research arm of Congress, the Congressional Research Service,over time, “families will both pay higher penalties and reach the cap at lowerincome amounts.” This new ObamaCare tax will, like the AlternativeMinimum Tax, hit more and more people over time as incomes rise.
The new taxes are complex and escalate
depending upon a person orfamily’s income. They have basically three tiers:
Flat fee
: The first tier for lower income taxpayers is fixed, starting at $95 forcalendar year 2014 (the first year the mandate is effective), $325 in 2015, and$695 in 2016 and beyond. The total family penalty is capped at 300% of this flatdollar tax — $2,085 in 2016 – for those earning less than about $110,000,according to the CRS.
Percentage of income
: The next tier is based upon a percentage of income:1.0% in 2014, 2.0% in 2015, and 2.5% thereafter.
7/24/2012 @ 10:28AM|84,957 views
How Much Is The ObamacareMandate Going To Cost You?
Grace-Marie Turner
, Contributor
I cover news on health care policy.
How Much Is The Obamacare Mandate Going To Cost You? - ...http://www.forbes.com/sites/gracemarieturner/2012/07/24/how...1 of 32/10/13 7:22 PM
Cost of a basic health plan
: However, as household income increases,eventually the percentage tax will rise to equal the cost of the national averagepremium for a “bronze-level health plan,” where it is capped. (The bronze plan isexpected to be the least expensive plan in the line-up of policies that will beoffered through the ObamaCare health insurance exchanges. The CongressionalBudget Office estimates that in 2016 the cost of a bronze-level plan for a family  would be between $12,000 and $12,500 a year.)
Buying insurance or paying the tax
is portrayed as a neutral choice by Chief Justice John Roberts who wrote in his majority opinion “…imposition of a tax nonetheless leaves an individual with a lawful choice to do or not do acertain act, so long as he is willing to pay a tax levied on that choice.”Buy health insurance or pay a tax. Your choice.For example, a family earning $120,000 will face a tax of $3,000 a year if they don’t buy health insurance with the government’s stamp of approval. Forsome, it will make sense to pay the tax and take their chances since healthinsurance companies will be forced to sell them a policy when they need it atthe same price as if they had been paying premiums all along. That will, of course, send the cost of health insurance soaring.Higher-income individuals face a much larger tax because, for them, theamount of the tax is determined by the cost of a government-approved bronzehealth plan. A family earning $500,000 a year pays 2.5% of its income in thetax and hits the cap at $12,500. The tax could be higher, of course, if the costof this government-approved policy escalates.There are subsidies for some citizens through Medicaid and through new health insurance bureaucracies, plus exemptions for certain classes andcategories, such as those qualifying for hardship or religious exemptions or whose incomes are less than the filing threshold for federal income taxes.
Remember that the government will determine
what health insurancepolicies meet its approval to satisfy the individual mandate. If citizens decidethey prefer a different health plan, they would have to pay for that insuranceas well as pay the new tax.There are significant new reporting requirements for individuals to prove tothe IRS they have maintained qualified health insurance every month duringthe year, that any premium subsidies they are receiving are justified by theirincome and family size, and how much their employer paid for their coverage,for starters.The tax penalty will be collected by the IRS and extracted from any incometax refund due. The legislation, however, ties the IRS’ hands in using itsnormal collection tactics, such as liens, levies, and criminal penalties.Surely every family will be making its own calculations and cost-benefitanalyses involving the health insurance mandate. McKinsey & Company hasreported that as many as 30 to 40 million Americans could forgo healthinsurance, with some figuring they can purchase a policy whenever they arefacing expensive medical bills.The individual mandate tax is only the newest in a long list of new Obamacaretaxes, including a new 0.9% surtax on Medicare taxes for those making$200,000 or more ($250,000 joint) plus a new Obamacare 3.8% surtax on“investment income” for those in the same income categories. This added taxaffects dividends, interest, rent, capital gains, annuities, home sales,
How Much Is The Obamacare Mandate Going To Cost You? - ...http://www.forbes.com/sites/gracemarieturner/2012/07/24/how...2 of 32/10/13 7:22 PM

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