How Will Obamacare Affect Me? the Individual Mandate

ObamaCare starts October 1st right?!?

Individual Mandate– ObamaCare or the Affordable Care Act started years ago. Many provisions are already in place, but the Individual Mandate insurance exchanges does start October 1. The Individual Mandate is a requirement that every person buy health insurance. If you already have insurance through your employer or you purchased insurance already, nothing will change for you at this time. However, if you don’t have insurance already, you may receive a penalty at some point.

Insurance Exchanges– To be specific, the insurance exchanges start October 1. The exchanges are groups of insurance companies that will offer you a variety of health insurance plans. You will have until 2014 to obtain such insurance, if you don’t you may be penalized.

How much is the penalty? If you don’t purchase insurance, you may be penalized either $95 per adult or 1% of your total family income. The 1% is after the first $10,000 you make as a family. So, if your family income is $50,000 total then you would pay a $400 annual penalty. As we all know, health insurance will likely cost a few hundred dollars a month. So, it may be cheaper to just pay the $400 a year. Unfortunately, this penalty will increase to 2% in 2015 and 2.5% in 2016.

Does this apply to me? These costs don’t apply to everyone. In fact, the CBO estimates that 80% of the uninsured will be exempt. If you make less than $10,000 a year, are a Native American, an undocumented immigrant, then you aren’t subject to the penalty.

Can I get on Medicaid? ObamaCare originally planned to expand Medicaid to provide insurance for many people just over the poverty line. For example, a family of four that made less than $32,500 would be eligible for Medicaid. If this family made over that amount and up to 400% of the poverty level, then they would get some of their insurance premiums paid. However, that only applies to states that expanded Medicaid to these levels. Many states including North Carolina refused to expand Medicaid. The federal government was going to pay the costs for these people, but since North Carolina opted out, they will not.

Republican alternative– The House Republicans are pushing an alternative plan (H.R. 3121) to ObamaCare that would provide tax breaks to people who bought their own insurance. The tax breaks could provide a family with $20,000 in deductions from their taxes. Of course, the Senate Democrats will not agree to this proposal, and the Republicans are threatening to “defund” ObamaCare. However, this doesn’t seem plausible. ObamaCare was passed as mandatory spending and not discretionary. Discretionary spending is the only funding that Congress can cut. Congress can’t cut mandatory spending, so can’t cut ObamaCare. Instead, Congress can only repeal the law. Everyone knows this, so this must be a plow by Republicans to appease their fiscally conservative base.

How much with the insurance cost? This is the million dollar, well trillion dollar, question. Forbes has stated that it will cost the typical family of four more than $7,000 a year increase in health spending.