Obama’s medical insurance legislation that was first billed as not being a “tax” (hilarious given the number of “fees” and “surcharges” it levies; even the Supreme Court could not pass up the opportunity to classify it as such), and also claimed that the plan would be “revenue neutral” (which it clearly won’t be if you look out a few years) also gave the impression that the costs would be primarily borne by business and the rich. Well, middle class Americans are bearing quite a burden as well, regardless of what you read in the ever-adoring mainstream media. See, in anticipation of the pending legislation, healthcare costs have skyrocketed leading into and shortly after it’s passage. It’s hard to believe, by my insurance costs (company sponsored by a large blue-chip) zoomed by 43% this year. Unbelievable huh?
Now, some critics will say that the cost increases had nothing to do with Obamacare and that they were increasing before hand. While I don’t think that is the case, let’s check out some of the other non-plan related hard costs our family is seeing since its passage. We make well less than the $250,000 per year that Obama calls the top of the middle class, so I’m not being hit with some of the surcharges and fees that more wealthy Americans are. But here are a few spots where I’m paying more out of pocket for medical coverage than I would have prior to Obamacare:
- FSA Contributions Limited to $2500 – We’re really going to feel this one in 2013 and beyond. See, while many people have minimal medical expenses, we have 3 kids, each of which have their own medical needs which are not covered by the medical/local health system. Take two of our sons for instance. They have both had severe speech issues since they started talking and given the nuances of their needs, what’s “pre-existing”, what they CAN pronounce, etc., they do not get adequate coverage through either the state or the school, so for years, we’ve been paying out of pocket for an excellent local speech therapist privately. My wife’s a teacher and is well versed in the downside of not addressing and resolving speech impediments early on. It affects everything from the ability to read and learn to social stigmas. Therefore, it’s been a priority for us to pay out of pocket to resolve rather than wait until 1st grade with a mediocre public school speech therapist. Anyway, these lessons are $50 a pop every week. That’s $2600 a year just for speech for a single kid! Now, add on the fact that my company’s health care coverage has become increasingly expensive each and every year. Aside from the higher monthly premiums we’re seeing, we now have high deductibles and the old HMO option is gone (used to be 100% coverage post-deductible). So, now we also pay 10% of all medical charges even after the deductible is exceeded. For a couple typical items like ER visits, doctor’s visits, “The Snip” (yes, I penned a piece on the financials of my vasectomy) which I’m really looking forward to and some others, the out of pocket expenses are a few grand there as well.
- FSA Eligible Limitations Imposed – This one already kicked in shortly after passage of the bill. You can no longer deduct many of the items you used to as part of your Flex Savings Account. Our family routinely uses OTC meds that are no longer covered. While the hit isn’t nearly as substantial as the last one, since probably all Americans utilized OTC meds to some degree each year, when you spread this change across a several million households, it really adds up! It’s a money grab which has no real relevance to the intended plan benefit itself. How does limiting deductions for a common medical necessity that existed previously help benefit Americans? It’s just another federal money-grab (redistribution of wealth).
By capping our total FSA deduction at $2500, it’s easily a few grand next year that won’t be deductible. So, let’s call it an extra $2000 non-covered.
25% tax bracket * $2000 = $500 difference from 2012.
That’s $500 in tangible costs I’m contributing to Obamacare above and beyond the future effects of worsening and increasingly expensive coverage as a result.
Now, if you are one of those nasty “upper-classers” that the administration keeps talking about, here are some additional goodies you can look forward to:
- A 3.8% surtax on “investment income” when your adjusted gross income is more than $200,000 ($250,000 for joint-filers).
- A 0.9% surtax on Medicare taxes for those making $200,000 or more ($250,000 joint).
- Many industry taxes that will undoubtedly be passed on to consumers (medical device taxes, pharma industry taxes, etc.)
- Taxes on your health insurance benefits in a “cadillac plan” after 2018, etc.
Do You Anticipate any Cost Increases for Your Family as a Result of Obamacare?