The Affordable Healthcare Act or Obamacare is expected to make sweeping changes on how people buy health insurance and on health insurance policies themselves. While many people may not be affected by these changes, some may experience positive or negative effects on their finances base on individual income levels, family size, health and present insurance status.
With Obamacare, everyone has to buy insurance coverage; not doing so will lead to tax penalties. Moreover, with this program, the government regulates rates and insurance companies will not be able to deny coverage to people with pre-existing conditions.
Obamacare helps save money as preventative care will now be offered to the insured without the need of bearing out-of-pocket costs. Moreover, the amount of out-of-pocket expenses an individual has to pay will be limited which reduces the need of high-deductible programs.
However as the program limits the amount of health expenses to deduct from annual tax and introduces various tax increases, it can predominately affect high-earners and businesses.
Those who are insured by employers may not notice much change. However if your employer opts to pay the tax penalty instead of buying insurance, your coverage may be reduced. In such cases, you have to buy private insurance or pay the tax penalty yourself.
People with existing private insurance policies have to pay lower rates because of Obamacare. However there is a chance of policy details changing as your out-of-pocket expenses is based on your income and family size.
If you are uninsured you have to buy health insurance or pay tax penalty. While lower-income households get low price insurance when compared to high-income households, the tax penalty is same for all income brackets. You however don’t have to pay tax penalty if your insurance costs more than 8% of your annual income.
If you have a small business, you save money as you don’t have to provide insurance for your employees as only businesses with 50 or more employees are subject to tax penalties. The best benefit of Obamacare is that you can buy insurance even if you have a preexisting condition or illness. However some people may take advantage of this by buying insurance when they are sick and pay their tax penalty in coming years.
In a nutshell, it is the people who need its protection that benefit most from Affordable Healthcare Act. It is extremely beneficial to the lower and middle-class household where health problems are financially ruinous to them while insurance coverage costs more for high-income households.