Money Girl covers 8 facts about Obamacare and how it will affect your health and your taxes.
Fact #4: Young Adults Have More Options
Parts of the Affordable Care Act have been slowly rolling out since it was passed. One of the first was the law that children and young adults up to age 26 now can be insured on their parents’ health plan. This is an option unless you are offered an affordable health plan through an employer.
If your health treatment costs an insurer millions of dollars each year, they’re required to pay it and never hike your rate.
Fact #5: There Are No Caps on Benefits
Insurance companies can no longer put a dollar limit or cap on what they’ll pay out for medical costs over your lifetime. The new law also phases out annual caps on payouts in 2014 and 2015. If your health treatment costs an insurer millions of dollars each year, they’re required to pay it and never hike your rate.
Fact #6: States Must Have a Health Exchange
The Affordable Care Act requires every state to establish a health insurance exchange or marketplace where consumers can shop for qualified plans. They must include a website, a toll free phone number, and a local office, in case you need in-person assistance.
Different insurance companies can offer plans with the same 10 essential benefits that I previously mentioned, in Bronze, Silver, Gold, and Platinum versions. A Platinum plan will cost the most, but cover 90% of your medical bills. Bronze, on the other hand, will cost less but only cover 60%.
Fact #7: Even the Middle Class Can Get Tax Subsidies
Anyone who doesn’t get health insurance through Medicare, Medicaid, or an employer can get insurance through an exchange. Depending on your income, family size, and residency status, you may qualify for financial assistance from the government in the form of an upfront tax subsidy. And even if your employer offers coverage—but it costs more than you can afford—you may still be eligible for financial help.
A tax subsidy is paid directly to the insurance company and reduces the health insurance premium you have to pay. It’s available to every American who earns up to 400% of the poverty level. That means a family of 4 can earn up to approximately $92,000 per year and still get government assistance.
Fact #8: There Are Loads of New Taxes
Making sure that every American has access to good, affordable health care is a worthy goal, but an expensive one. So it probably won’t surprise you to hear that taxes have gone up to pay for it.
There are about 20 new taxes or tax increases in the Affordable Care Act. One of the biggest is a hike in the Medicare tax deducted from your gross paycheck. This will affect high earners, who are defined as individuals making more than $200,000 and families making more than $250,000 per year.
Other taxes include a new investment income tax, fewer allowable medical deductions, reduced tax-free contributions to medical savings accounts, taxes on tanning salons, medical devices, pharmaceutical companies, and health insurance companies.
For more information about health care reform, visit healthcare.gov.
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