The Strategist

Obamacare – Hurting Tax Payers

03/11/2015 - 18:10

About 6.4 million consumers purchase Obamacare health insurance in 2015.

Obamacare – Hurting Tax Payers
According to the Congressional Budget Office, Obamacare will increase the fiscal deficit by $1.2 trillion over the next decade. Now, this is being publicized as a success, the reason being that it was supposed to be a bigger financial drag. The latest projections show that the fiscal deficit will be $142 billion lower than its previous forecast.

About 11.7 million Americans, have taken health insurance this year under Obamacare and more people are expected to sign up for the insurance as the people have to pay extra taxes if they don’t. However, the people who missed the new rule will be provided a special enrollment period between 15th march - 30th April in order to save themselves from tax kicks. Americans who did not buy the health insurance will have to pay a fee of $95 per adult or 1% of the income, whichever is higher. This fee will increase to $325 per adult or 2% of the income next year.

The number of Americans that are without insurance dropped to record lows in 2015. In the first 2 months of 2015, only 12.3% of the Americans were uninsured as compared to 17.1% in 1Q14. Obamacare is compelling consumers to buy health insurance thereby distributing the healthcare expenditures across the population. With 4.7 million new enrollees, accounting for nearly 53% of the people, Obamacare was able to draw attention of Americans. The people who signed up health insurance on the federal exchange, will be eligible for federal subsidies of $263 a month thereby making the monthly premiums highly affordable by the consumers leaving them to pay only $101. These subsidies are supposed to be the next battle for the administration. The Supreme Court is in the process to take decision whether the Americans signing up on the Federal Exchange should be eligible for subsidies. The case, King v. Burwell relates to the subsidies provided under Affordable Care Act for buying health insurance. The challenger claims that subsidies provided under the Act can only be offered to individuals purchasing the insurance through state run exchanges. If the Supreme Court takes decision against the administration and invalidate the subsidies, nearly two third of the customers will be cut off from the subsidies thereby creating a situation of crisis for the Congress.

CBO stated that, as the insurers are witnessing twin pressures from both the government as well as marketplace, it indicates a hike in the premium by more than 8% per year through 2018. This spike in the premiums are much faster than other healthcare markets. However, CBO says that the health care expenses for the government as well as the consumers are much lower than earlier expectations. It indicates that Obamacare is cheaper than projected at the time when 2010 Affordable Care Act was enacted. A specific tax statement, 1095-A, is issued to the consumers who signed up the healthcare insurance through Marketplace. It provides information about the healthcare premiums paid which is used for calculation of premium healthcare credit.

Tags : Obamacare

< >

Friday, July 12th 2024 - 03:18 BP: demand for oil will peak in 2025