How Will Obamacare Affect Those with Employer-Based Insurance?

How Will Obamacare Affect Those with Employer-Based Insurance?

The good news for individuals with employer-based insurance is that under the Affordable Health Care Act, their policies must include a variety of services ranging from hospitalization to free preventative services. The downside is that many employers have determined maintaining insurance for their workers is too expensive and they’re choosing to eliminate coverage.

Obamare to employeeAlso known as Obamacare, the Act limits the amount individuals can save in their Flexible Spending Accounts (FSA) to $2,500 and places restrictions on what the funds can be used to purchase.

Penalties for buying forbidden items will increase to 20 percent and a huge influx of new patients could overwhelm existing clinicians, degrading the level of care provided and access to practitioners.

Where Coverage Comes From

Business owners of both large and small firms are choosing to drop employee health coverage in favor of paying the government-mandated $2,000 fine per person.

To obtain healthcare, employees will be forced to seek coverage through the Insurance Marketplace.

Individuals can begin signing up Oct. 1, 2013 and policies will go into effect Jan. 1, 2014. Some applicants will qualify for government subsidies to help pay for insurance, based on their income.

Unions have been granted a temporary waiver, but it expires in 2014. Union employees are already feeling the financial pain of higher costs and more out-of-pocket expenses. If employers drop employee coverage, workers will have to purchase coverage through the Marketplace.

Employees with coverage known as Mini-Meds, popular with the fast food industry, will be seeking insurance through the Marketplace, as Mini-Meds don’t meet the coverage requirements under Obamacare.

Insurance companies have already increased costs in many sectors in anticipation of Obamacare implementation.

Medicaid is being expanded under Obamacare to assist those who can’t afford insurance through the Marketplace and have none through their employer. Some states have chosen not to participate in the expansion, leaving fewer options for the poor.

People age 30 and over can purchase a catastrophic plan at the Marketplace that covers 60 percent of medical costs.

Benefits and Limitations

Under Obamacare, insurance companies can’t refuse coverage due to pre-existing conditions and insurers can’t place annual or lifetime limits on coverage. Policies must offer a core group of services, from preventative care to maternity benefits. Children can also remain on parental policies until they turn 26.

Insurance companies can no longer cancel policies for frivolous reasons.

Fines and Penalties

Workers that don’t have employer-based insurance and don’t qualify for Medicaid must purchase coverage through the Marketplace. Those who don’t face financial penalties due to the Individual Mandate Tax that goes into effect Jan. 2014.

Obamacare to employeesThe Mandate levels fines of up to $285 on those who don’t buy insurance. The amount increases to a maximum of $2,085 in Jan. 2016.

Some groups are exempt from fines for not having insurance.

Workers who can prove Marketplace insurance is greater than 8 percent of their income can claim a financial hardship. Individuals with incomes of less than $9,350 are exempt, along with joint filers making $16,700 or less. Others will receive fines for “Cadillac” policies, based on the value of the insurance.

In the beginning of Obamacare, the public was told they wouldn’t have to give up their current insurance plans if they didn’t want to. Many workers will be doing exactly that if their employers choose to maintain profitability by not offering insurance and paying the government fines.

The Impact of Obamacare on Medicare Recipients

The Impact of Obamacare on Medicare Recipients

One of the groups most affected by the Affordable Health Care Act will be seniors and the disabled receiving Medicare benefits. Medicare is being singled out for extensive financial cuts through Obamacare.

Medicare recipientsThe Act requires Medicare recipients to shoulder a larger portion of their healthcare costs, offers fewer health plan options, and drastically reduces benefits paid through the Medicare Advantage program.

The Act also imposes an excise tax on medical devices that many seniors rely upon, such as hearing aids.

As reimbursements under Medicare continue to decrease, recipients are facing reduced access to physicians and longer commutes to receive services. Further cuts will be forthcoming in the future through recommendations made by the Independent Payment Advisory Board (IPAB) created by Obamacare.

Paying For Obamacare

Between now and 2022, the Congressional Budget Office (CBO) says Medicare reimbursements will be reduced by approximately $716 billion. To reduce the costs to the Medicare program, Obamacare cuts the amounts that doctors are reimbursed for their services.

Faced with drastic reductions in payments, many clinicians are preparing for early retirement, closing their practices and taking employment at hospitals.

Medicare recipients were already finding it difficult to find practitioners willing to accept Medicare patients and many physicians have indicated they will send Medicare clients elsewhere for treatment in the future.

Medicare patients are among the hardest hit by Obamacare and represent a large segment of the population who will be paying for Obamacare in a variety of ways.

Medicare Advantage Plans

Those receiving Medicare had the option receiving healthcare services through Medicare Part A and B or purchasing a Medicare Advantage plan through a private company that contracted with Medicare. The range of available plans and options will be severely curtailed through Obamacare and Medicare patients will be required to pay more out-of-pocket for healthcare services.

The changes in Medicare Advantage plans affect both seniors and the disabled of any age.

Individuals will have to set aside more of their retirement savings to cover the cost of increased healthcare costs in the future. Those already receiving benefits will have no time to prepare for the potential financial fallout and will just have to pay the higher prices.

The increases may not be significant in the beginning, but will continue over time.

Medicare recipients will have the option of purchasing additional coverage to fill in the gaps through federally mandated healthcare exchanges, now known as the healthcare marketplace. Applicants may also qualify for government subsidies to pay for their insurance plan, depending on their income.

The Impact of IPAB

The government appointed, 15-member panel known as IPAB is charged with reducing healthcare costs within Medicare. The board will examine available treatments for a wide range of medical conditions and recommend what it determines is the best treatment based on effectiveness and cost.

Clinicians and patients are concerned that IPAB recommendations will limit the availability of treatments and some procedures will only be available to the wealthy.

ObamacareThe Good News

Obamacare seeks to close the “donut hole” in the Medicare prescription plan by paying for a larger assortment of medications and providing discounts on prescriptions.

Under Obamacare, wellness visits and a variety of preventative services can be obtained at no cost, including vaccines, flu shots, cancer screenings and annual check-ups.

The upcoming changes for Medicare recipients will offer expanded prescription benefits and preventative services, but has the potential for drastically increased premiums and co-pays.

While seeking to provide coverage to more individuals, Obamacare may have the opposite effect. An influx of new people seeking care, fewer clinicians, and more practitioners that won’t accept Medicare patients due to reduced reimbursements could easily lead to reduced access to healthcare for all.

How Will Obamacare Affect Working Families and the Poor?

How Will Obamacare Affect Working Families and the Poor?

Passage of the Affordable Health Care Act promised healthcare to millions of uninsured Americans who couldn’t afford it, were unable to obtain it, or didn’t qualify for other programs. The Act expanded Medicaid, called for the establishment of insurance exchanges and offered subsidies to assist families and low income wage earners purchase insurance.

Obamacare to FamiliesObamacare is a win-win situation for the majority of those who fall within those two groups, but according to the Congressional Budget Office (CBO), the Act still leaves an estimated 21 million without insurance.

Those individuals will continue to seek care at hospital emergency rooms and free clinics.

Essential Services and Coverage

The Act mandates that policies provide a variety of essential services, from medication and maternity benefits to mental health care. Office visits, preventative treatments, lab tests, newborn and pediatric care, hospitalization and emergency services will all be available under healthcare policies beginning in 2014.

Insurance companies can’t refuse insurance to individuals with preexisting conditions and adult children can remain on parental policies until they turn 26.

Medicaid Expansion

Families and the poor who meet income eligibility guidelines may be able to receive medical services through expanded state Medicaid programs. The Act assumed that individuals making $11,500 or less would automatically qualify for Medicaid

A ruling by the Supreme Court determined that participation in Medicaid expansion was optional. Many states chose to give up millions of dollars in federal incentives to expand Medicaid coverage.

Residents in states that don’t expand Medicaid coverage will have few choices – obtain insurance through an exchange or continue to do without medical coverage.

The Healthcare Marketplace And Subsidies

Also known as “marketplaces,” healthcare exchanges enable individuals to purchase their own healthcare coverage. Plan enrollment begins on Oct. 1, 2013, with policies going into effect on Jan. 1, 2014.

The marketplace for each state can be accessed online and buyers can choose from bronze, silver, gold and platinum coverage options, with varying premiums, deductibles and co-pays.

Some have mistakenly equated the term “affordable” with “cheap.” The Act doesn’t limit the amount that insurance companies can charge for their policies and many may discover coverage is still costly.

For those meeting federal financial guidelines, Obamacare provides subsidies to assist families and the poor purchase coverage through the exchanges.

Fines, Penalties And Stipulations

Obamacare extends healthcare to millions of new customers, but the Act also comes with built-in penalties and fines. Those who choose not to purchase insurance or can’t afford it, even with subsidies, will be assessed an income-based fine.

Obamacare to FamiliesFinancial penalties will be determined and collected through income tax returns. The government can’t place a lien against personal property, but it can take any refunds that are due.

Those with employer-offered healthcare policies won’t be able to immediately ditch them in favor of more affordable options and subsidies through state marketplaces.

Individuals that choose to give up coverage through their employer will be required to wait a set amount of time before their marketplace policy becomes active and pays for services.

The Affordable Healthcare Act is a mix of coverage options, subsidies and penalties for families and the poor. It offers essential healthcare services through expanded Medicaid programs and state marketplaces, provides financial incentives to purchase through subsidies, and penalizes anyone who doesn’t have coverage.

Obamacare promises a nation where the majority of citizens have access to healthcare, paid for by those in more financially tenable positions.


The Obamacare Timeline – 2010 to 2018

The Obamacare Timeline – 2010 to 2018

The Affordable Healthcare Act, also known as Obamacare, contains almost 500 different elements. Various features of the Act were designed to take effect over the course of the next eight years, with a complete implementation date of 2018.

Obamacare timelineIt was one of the signature pieces of legislation on the Obama administration’s to-do list when the President Obama took office.

The Act was passed amid strong opposition and continues to be a topic of great debate.

The Congressional Budget Office estimates Obamacare will provide coverage for 25 million individuals who are now without healthcare, but will still leave approximately 31 million uninsured by 2033.

The following provides an overview of the Obamacare timeline.

March 2010

President Obama signed the Patient Protection and Affordable Care Act into law on March 23, 2010, marking the beginning of legislation designed to provide healthcare for all Americans.

July 2010

A pool was established to cover individuals considered high-risk by insurance companies. The government-operated pool provides coverage for those with a pre-existing condition until Jan. 2014 when that coverage is required by all insurance plans.

Sept. 2010

Beginning in 2010, insurance companies could no longer refuse coverage to those under the age of 18 with a pre-existing health or medical condition, nor could insurers cancel policies for frivolous reasons.

This component of Obamacare also allowed children up to the age of 26 to remain on parental policies as dependents.

Insurance companies were no longer allowed to place lifetime limits on an individual’s benefits. 

An additional clause prohibits annual limitations on benefits, with a complete ban on the practice beginning in Jan. 2014. A maximum tax credit of 35 percent was made available to small businesses with 25 employees or less.

Jan. 2011

The much talked about “donut hole” gap in Medicare prescription plans began to close and will be completely eliminated by 2020. Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) can no longer be used to pay for over-the-counter medications.

A limit of $2,500 is placed on the amount individuals could place in an FSA, along with the type of medical items that can be purchased. Penalties for buying prohibited products were increased to 20 percent.

Oct. 2012

Enrollment in the Community Living Assistance Standards and Supports (CLASS) program were scheduled to begin. Designed to ensure long-term care for seniors, individuals would begin paying advance premiums to cover the cost of their care after retirement.

The program was suspended in Oct 2011.

Jan. 2013

The income tax deduction for claimable medical-related expenses increased from 7.5 to 10 percent.

Jan. 2014

Medicaid coverage will expand for those with income levels up to 133 percent of the poverty level. Healthcare exchanges, also known as marketplaces, will be established where individuals and small businesses can purchase their own insurance. Some states have opted not to participate in either of the components.

States that don’t set up their own marketplace will have one established for them and operated by the federal government. Marketplace enrollment begins in Oct. 2013.

The Individual Mandate Tax (IMT) also goes into effect, imposing individual fines of up to $285 on those who refuse to obtain healthcare insurance. Adults 18 and older can’t be rejected for insurance and those under age 30 can purchase catastrophic insurance coverage through the marketplaces.

Insurance policies must provide a core of essential services as determined by Obamacare. Small businesses with 25 or fewer employees can take advantage of a maximum tax credit of 50 percent. The credit expires at the end of 2015.

Jan. 2015

The IMT increases to a maximum penalty of $975 per person for those without insurance. The Independent Payment Advisory Board (IPAB) will begin making recommendations to reduce Medicare spending.

The panel will be responsible for determining which treatments and procedures provides the best results and are most cost effective.

Jan. 2016

Those without insurance can be fined a maximum of $2,085 under the IMT.

Jan. 2017Obamacare timeline

Large businesses with 100 employees or more will be able to access their state’s healthcare marketplace. Participation is dependent upon the individual state’s approval.

Oct. 2017

This was the earliest date that CLASS benefits could be paid out to recipients. The White House suspended CLASS in Oct. 2011.

Jan. 2018

IPAB’s recommendations for trimming Medicare costs can be implemented. Those who have a “Cadillac” insurance policy, with premiums in excess of $10,200 for individuals and $27,500 for families, will pay a tax of 40 percent on their coverage, according to the value of the policy. Dental and vision benefits aren’t included when determining value.

Obamacare affects everyone in some way, but few have any knowledge about the different elements involved or how it will affect their healthcare and finances. Those that make no effort to learn about the Obamacare timeline will find they still have no medical coverage and the problem will be compounded by financial penalties.


What Large (and Small) Businesses Need to Know About Obamacare

What Large (and Small) Businesses Need to Know About Obamacare

While the Affordable Health Care Act (Obamacare) will extend the availability of healthcare services to millions of uninsured Americans, it imposes a variety of mandates on businesses of all sizes that increases the cost of doing business.

Obamacare to BusinessesEmployers are not happy about Obamacare and many fear the effect on their productivity and profit margins.

Businesses with 50 or more employees, and those with workers who put in 30 or more hours per week, are required by Obamacare to provide their workforce with health insurance or face financial penalties of $2,000 per employee.

Many firms are choosing to pay the fine – it’s cheaper than providing insurance.

The outcry by the business community was so great that President Obama delayed the mandate’s effective date until 2015 to give employers time to prepare for the transition. Companies across the nation are looking at strategies to lighten the financial load when Obamacare is fully operational.

Shrinking Business Growth

According to a survey by the Society for Human Resource Management, 41 percent of participating small business owners indicated they would not be hiring new employees due to Obamacare.

Twenty percent said they were reducing their payroll and expansion projects are being placed on hold.

Some businesses will receive tax breaks to help alleviate the financial pain of health insurance premiums they pay for employees. The tax breaks only apply to companies with 25 employees or less and many entrepreneurs fear financial failure with the full implementation of Obamacare.

Reducing Workers and Hours

Obamacare to BusinessesTo elude the fines of Obamacare, many businesses have chosen to:

  • reduce their workforce
  • limit workers to 29 hours per week, and
  • transition to a four-day work week

All three strategies have a negative impact.

Higher unemployment rates and reduced hours will force individuals to utilize social service agencies to survive. According to the Bureau of Labor Statistics, only one full-time job was created for every four part-time jobs in 2012.

A survey conducted by Mercer found that 12 percent of all U.S. employers planned to reduce hours for full-time and part-time employees.

In a Reuters survey, a number of businesses indicated that they would be hiring more temporary employees.

That policy would allow employees to qualify for government subsidies to purchase their own insurance coverage through state operated marketplaces.

The strategy is being used by businesses of all sizes, along with educational institutions.

Companies that do provide insurance for employees are being forced to reduce covered benefits while increasing the cost to workers. Some are choosing to eliminate coverage for spouses and children. Insurance companies have raised their rates in response to the array of mandated services through Obamacare.

Economic Repercussions

The costs incurred by businesses through Obamacare mandates will be passed on to consumers. Companies will have to raise the prices on their goods to make up for a loss in productivity, fines and other costs associated with the healthcare Act.

The impact will be felt at all levels, from food and clothing to housing and the auto industry.

Fear of Obamacare has resulted in significant changes in the business community. To combat the cost of mandatory healthcare, businesses are being forced to lay off workers, cut hours and modify work weeks. The result is a loss in productivity that affects profits and limits the ability to expand and create jobs now and in the future.

Impact of Obamacare on Senior Citizens

Impact of Obamacare on Senior Citizens

According to Health and Human Services Secretary, Kathleen Sebelius, 11,000 seniors are becoming eligible for Medicare each day. As new elements of the Affordable Healthcare Act are introduced, seniors will see changes in their Medicare coverage, out-of-pocket expenses, and even the physicians they see.

Obamacare to Senior CitizensKnown as Obamacare, the Act reduces payments for those with Medicare and who are enrolled in the Medicare Advantage program.

A significant amount of money to fund Obamacare over the next 10 years is being taken from Medicare coffers.

The Congressional Budget Office (CBO) estimates that reimbursement for Medicare-related services will be cut by approximately $716 billion between 2013 and 2022.

Seniors participating in the Medicare Advantage program will see cuts in that as well.

Seniors will face additional cuts through the creation of the Independent Payment Advisory Board (IPAB), which will have control of the Medicare budget in coming years. Insurance companies will be allowed to continue charging seniors and other groups higher rates for their healthcare.

On the plus side for the 49.5 million seniors on Medicare, Obamacare caps the amount seniors will pay for Medicare premiums. It also expands coverage for prescription medications and some preventative care services.

Reducing Payments to Control Costs

Medicare already pays less for services than many commercial carriers and those amounts will be reduced further in the coming years. Facing the prospect of decreasing Medicare revenues, many clinicians are either selling their practice, retiring early, taking employment at hospitals, or refusing to see Medicare patients at all.

A Deficit of Doctors

According to the Association of American Medical Colleges (AAMC), there will be an estimated deficit of 130,000 physicians by 2025. Fewer clinicians mean less access to healthcare for seniors and a longer wait for appointments.

Seniors could be forced to locate a new practitioner, be limited to clinicians within specific networks, and required to travel further distances to receive healthcare.

Medicare Advantage and Excise Taxes

Changes in Medicare Advantage programs could potentially eliminate or drastically reduce vision and hearing coverage. Obamacare raises taxes on medications and medical equipment. Patients will pay an excise tax on medical devices, ranging from wheelchairs and joint replacements to hearing aids.

Funds collected through the tax increase won’t be used for Medicare. The money is earmarked to pay for and sustain Obamacare programs.

The Act assumes that seniors will use the dollars previously used for Medicare Advantage plans to purchase insurance through commercial companies.

IPAB Controls Future Cuts

Obamacare for Senior CitizensFurther measures to control costs in the future will be in the hands of the IPAB. The 15-member board will have the power to cut Medicare spending where it sees fit to reach specific spending goals.

Cuts will automatically take effect unless Congress moves to counteract the changes with a super majority vote of three-fifths by the Senate. IPAB members are appointed and can’t be voted out of office.

The board essentially provides protection for Congress, absolving them of any responsibility for Medicare cuts.

IPAB will be charged with setting reimbursement rates for clinicians and deciding which medications, treatments and procedures will be covered.

IPAB will determine the most effective treatments for specific maladies and the cost for each treatment and procedure.

Most people agree that some type of healthcare reform was needed, but seniors fear Obamacare will limit their access to physicians, medications and treatments at a time when they need them most. One thing is certain. Obamacare will definitely impact the financial health of seniors.