Obamacare’s Hidden Tax- the MANDATE ITSELF! (Oh yeah, insurance companies win!)

With the Supreme court’s narrow decision upholding Obamacare based on the tax code link to the mandate, the true cost to Americans bears evaluation. It turns out that the tax impact and the mandate cost impact are substantial.  What’s worse is that President Obama’s promise that those making under $250,000 per year will not see even “one dime” of new taxes.  Well, that is out the window with Obamacare.  Imagine you are a hard working family making about $46,101 (201% of Federal Poverty Level) near the most common income in America and are now forced to buy the cookie cutter government health plan. You will be hit with an insurance premium and health care bill of about $9,400 in a year if they have a significant illness. That will be $2,900 for the premium and $6,000 out of pocket for the insurance to fully cover any major problem that year.   Oh, the insurance company gets to pocket over $11,000 in tax money on your behalf – hoping you won’t make a claim and counting on that $6,000 hurdle to stop you from doing so!

Cost to Americans for health care under Obamacare’s mandate.

Federal Poverty Level

Family of Four income

Premium by Family (% of income)

Out of Pocket requirement

Total cost if ill

Total to insurance company *

201%

$46,100

$2,904 (6.3%)

$6,000

$8,904 

$11,196

300%

$69,150

$3,457 (9.5%)

$8,000

$11,457

$10,643

400%

$92,200

$8,759 (9.5%)

$8,000

$16,759

$5,341

*Directly from Federal Government (based on estimated $14,100 premium expected in 2014)

The central financing tenant of insurance premiums for Obamacare is based on redistribution of wealth from higher income groups to lower income groups. This will be in the form of subsidies that will come from taxes paid to the Federal government.  Of course, those subsidies are never paid to the insured family, they are sent directly to the insurance company to help line their pockets. The only persons able to “receive” those subsidies will be those below 400% of the Federal Poverty Level.  Of course, those earning over 400% of Federal Poverty ($92,200 for a family of four) level will see ever escalating insurance premiums and will be responsible for 100% of the cost. Insurance premiums are escalated to go to about $14,100 for a family of four in 2014, compared to about $12,000 when Obamacare passed.  A full breakdown on the premium costs and subsidy levels is below, but basically the premiums will account for 9.5% of income for higher earners (up to 400%FPL) and they will be eligible to receive a smaller share of subsidy for out-of-pocket “cost sharing” costs. 

Out of pocket “cost-sharing” costs are those for things like deductibles and co-pays.  The cost-sharing subsidy will only occur for people who are enrolled in the Federally created health exchanges.  In the end, many people will pay much more than they thought to get health care.  The saddest part is that they will be paying more and getting less since the new health care system created by Obamacare is a foreign entity Americans won’t recognize. Doctors won’t be providing most primary care, it will be nurses. The doctors you do see will get a bonus to deny you care and the bureaucracy will penalize doctors who dare to spend money on you. After all, that would cut into the insurance company profit that they are expecting  from the tax subsidy that was just redistributed into their bank accounts. Of course the insurance companies won’t get off scott-free. Many will simply not buy insurance until they need it and “gaming’ like this In Massachusetts  cost state insurers about $37 million in 2011!


Premium and subsidy estimates are from the Congressional Research Service at http://assets.opencrs.com/rpts/11-148_20100415.pdf

premiumpercentageshareofincome  costsharingsubsidies

outofpocketpremiumsCRS

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3 Replies:

  1. Donna

    This sure explains the changes we are going to see. Nurses will be providing more care than doctors. I think lots of doctors will be dropping out of being providers for Medicare. They can’t afford to stay.

  2. Donna

    I really appreciate the way you keep us informed as someone who has knowledge about how this will affect patients and doctors. Thanks for all the time you take to help us this way.

  3. LifeANT

    ACA (ObamaCare) is coming home to roost for Obama and the Dems! It is all down hill from here.. Unfortunately, destruction of our health care system is also assured.

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