A wealth of new taxes appeared when the Affordable Health Care Act (Obamacare) was signed into law. The taxes affect a wide range of businesses, products and services, from tanning salons and medical devices to name brand medications.

Penalties were placed on investment income, health savings accounts, people without healthcare insurance, and “Cadillac” insurance plans.

Who Pays The Insurance Tax?

One of the penalties that generated the most concern among taxpayers is the 40 percent tax on what’s known as Cadillac insurance plans that feature low co-pays, deductibles and premiums.

Contrary to popular belief, the tax on “luxury” policies won’t be assessed against consumers.

The penalty will be levied on companies that offer the plans, but consumers will certainly experience repercussions as a result.

The tax officially takes effect on companies in 2018, but many employers are already taking steps to avoid paying the penalty. The tax affects all employer-sponsored health insurance that exceeds a value of $10,200 for individuals and $27,500 for families.

It hits any high-end gold or platinum policy that’s not purchased on the government’s Healthcare Insurance Marketplace.

Employers are assessed the tax if they provide workers with benefits considered too expensive by the authors of Obamacare.

Many employers are scrambling to rid themselves of the policies they’ve offered workers in the past and replace them with plans that increase the cost of deductibles, premiums and co-pays to employees.

Learning The Value Of A Dollar

Obamacare was written with the assumption that workers didn’t know or care about the true cost of their healthcare insurance, and that employer-provided policies encouraged overutilization of benefits and unnecessary tests.

With Obamacare, workers will know the exact cost of the policy when it’s included on their W-2s, when their deductibles increase, the cost of their co-pays double or triple at the doctor’s office, and dental/vision care is reduced or eliminated.

Obamacare is concerned with the physical health of patients. Dental and vision care aren’t considered essential.

By raising patient costs, Obamacare hopes to limit/reduce the number of visits people make to their physician as a means of reducing healthcare costs and curbing overutilization of expensive tests and services.

Trading Lower Wages For Insurance

In many instances, taxing employers that offer exceptional healthcare policies actually penalizes employees who have chosen to work for lower wages in exchange for better healthcare.

The taxes on businesses could add others to the pool of Marketplace purchasers, as employers stop offering benefits and dump workers and retirees into the Marketplace to find insurance.

Exemptions For Some

Exemptions from the tax have been negotiated for those in certain industries that include law enforcement, paramedics and first responders, and those providing out-of-hospital emergency services.

Also included in the exemptions are individuals doing longshore work, mining, construction, people in the fishing industry, forestry and agriculture (excluding food processing).

The Positive Aspects – A Mixed Bag

The other side of the Obamacare coin is that free preventative tests and screenings encourage people who already have insurance to use the services of their physicians, along with an estimated 30 million new patients who will be covered through Marketplace policies.

Medical professionals fear the influx of that many patients will seriously compromise the level of patient care and effectively reduce access to healthcare overall.

Businesses offering “Cadillac” insurance policies will shoulder the burden of Obamacare penalties on those plans.

As patients, employees will experience the trickle-down effect in the form of higher co-pays and premiums.

Many deductibles have increased to $5,000 and over, a figure that’s far more than many people will spend on healthcare in a year. Under Obamacare, the average person will now be paying for insurance with limited practical usage until they’ve already spent thousands of dollars meeting their deductible.

The Affordable Health Care Act, known as Obamacare, is already bringing change into the lives of millions of individuals across the nation. Some view those changes in a positive light, while others are facing the potential for penalties, loss of employer-based insurance and even cuts in jobs and hours.

There are actions that individuals can take to protect themselves from the downside of Obamacare, and measures that can be implemented to reap the most benefit from the legislation.

It requires effort on the part of consumers, but the results could be well worth it.

Medicaid Eligibility Expansion

One of the initiatives under Obamacare was the expansion of Medicaid to millions of patients who previously wouldn’t have qualified, though a handful of states have refused to expand their programs.

It pays to check anyway, as some people who don’t qualify for Medicaid may still receive some type of assistance.

In states that expanded Medicaid programs, a family of four making $29,327 (per 2010 statistics) will be able to enroll.

Residents in states that already had generous income eligibility levels above that current Obamacare mandated amount could be eliminated from the program and referred to the Health Insurance Marketplace.

Low-income earners are eligible to receive financial subsidies to help offset the cost of coverage on the Marketplace.

Avoid the Individual Mandate Tax (IMT)

The IMT is a penalty imposed on those who don’t purchase insurance and collected through income taxes. People covered by an employer-based policy are in compliance and won’t be charged.

Those without insurance may be eligible for Medicaid or subsidies for purchasing coverage on the Marketplace.

Before writing a check to pay the IMT, taxpayers may want to wait and see if collection of the IMT is actually going to happen.

Obamacare empowers the Internal Revenue Service to collect the IMT by deducting it from any refund to which the taxpayer may be entitled, but they can’t take personal property.

The IMT is extremely difficult to enforce and may be changed in the future.

Over-The-Counter (OTC) Medications

Families with a Health Savings Account (HSA) or Flexible Spending Account (FSA) can pay for OTC remedies if a physician writes a prescription for them.

Those who take OTCs that include products such as Tagamet or Tylenol should ask for a prescription in anticipation of future needs.

Obamacare offers new hope for many individuals and families. For some, it may be an opportunity to receive treatment for potentially life-threatening conditions.  Others aren’t as enthusiastic about Obamacare. They’re waiting and remaining vigilant to see what Obamacare has in store for them in the future.

One of the stated goals of the Affordable Health Care Act was to improve the overall health of Americans. As part of the goal, Obamacare created a National Prevention, Health Promotion and Public Health Council to manage the government’s goals and promote personal wellness.

The Council will make recommendations on how to move toward those ends and help people avoid serious health problems.

Obamacare includes a variety of provisions designed to promote a healthier lifestyle.

Many of those options may have little effect on individuals who already have serious or chronic health problems, nor do the initiatives take free will into account.

Obesity is of particular concern and has been designated as a security threat, based on a study conducted by retired military chiefs that make up the Mission Readiness group.

No Co-Pays For Preventative Services

Obamacare has created a list of government approved preventative tests and vaccines that will be available for free. They’re part of the guaranteed essential health services under Obamacare and no co-pays of any kind will be required from patients.

Free tests run the gamut, from mammograms, colonoscopies and those for STDs to immunizations and screenings for heart disease, high-blood pressure and cancer.

Counseling rounds out the array of no co-pay services provided under Obamacare. Individuals can avail themselves of consultations and advice from medical experts on diabetes, smoking, birth control and HIV, along with domestic violence, breastfeeding, depression and dietary needs.

Vaccines will prevent the spread of disease and screenings are valuable tools for identifying existing and potentially dangerous heath concerns.

Counseling provides patients with information they need to manage their health, but if individuals don’t act on the data to change detrimental habits they’ll still end up being treated for those illnesses.

No Behavior Goes Unrewarded

Obamacare approves and supports employer-based incentive programs to steer workers toward health and wellness lifestyles. Incentives can take the form of cash, funds deposited into a flexible spending account (FSA) to pay for medical expenses, or discounts on insurance costs.

Employers also have the ability under Obamacare to penalize workers that engage in behaviors deemed unhealthy, from smoking and weight gain to lack of exercise.

It’s a form of negative reinforcement that’s long been frowned upon as a method for disciplining misbehaving children, yet Obamacare gives the behavior a green light in the workplace.

Medicare Spending And Prevention Counseling

In addition to the free services accorded to others through Obamacare, Medicare recipients can work with their clinician to formulate a preventative health plan customized to their specific needs.

Plans will address current and future medical issues and condition management.

Healthy Choices When Eating Out

Fast food, restaurant cuisine and vending machines have been cited as primary sources that passively promote obesity.

Beginning in 2011, all restaurants with 20 or more locations were required to provide nutritional data and calorie counts on menus to aid people in making healthy choices.

The mandate also extends to vending machines.

Obamacare offers an array of beneficial services and is a step in the right direction, but health can’t be legislated.

Obamacare doesn’t address many of the critical issues that can lead to the development of health problems or the element of free will. Only time will tell if Obamacare has been successful in creating a nation of healthier people.