I'm a long term "S" Corp contractor, been paying taxes on the value of my self provided health insurance for years. A family plan that covered everything in the 80s was maybe $325/mo. By 2011, when my oldest son graduated college and got a job and left my family plan, the rates on my $1900/mo plan jumped to over $2500/mo in the roll up to Obamacare. So I switched to a high deductible plan that covers only catastrophic events for $1150/mo. By law, since I am an "S" Corp employee and self employed, I must declare the value of my HI on my W2 as imputed income.
So along comes Oct 1, and I get a cancellation notice letter, which suggests I must go to the new 'exchanges' to get now mandated HI. I live in a state that has no state exchange, so it seems I must go to the federal exchange, which of course, doesn't work. But I call my provider who just cancelled me, make an appointment, walk into their store front office, and take care of all this in 20 minutes, including the coffee they serve me. And, I learn a lot.
Turns out, I don't need to go to the federal exchange; the termination letters they sent out had to be written the way they were, by law, which have the effect of making it seem like I had to go to the exchanges. No, they still have plenty of ACA compliant plans, its just by law, they had to cancel the one I had and tell me to go look everywhere else for a new plan.
The only reason to go to the exchanges is to apply for federal subsidy, and I was nowhere near eligible, so no point at all. But I was shocked to learn that in addition to the MAXIMUM INCOME level for eligibility for subsidy, get this, there was also a MINIMUM INCOME level! Wait a minute...I thought the whole point was to get the poor uninsured access to health insurance?????? No, it turns out, if you earn less than 100% of the federal poverty level(somewhere around $11-12K/yr)you are not eligible for ACA subsidy because you are already eligible for MEDICAID. That is why, of those who rushed to the exchanges, by far most are being shuffled to MEDICAID. Many more are signing up-- well, at least, applying -- for MEDICAID than are applying for Obamacare.
I ended up with a new high deductible plan that was better than my old plan and $400/mo less ($750/mo vs $1150/mo)...but still learned alot more.
I asked about small business small group plans; in the 80s, as a self employed person, I used to be able to go through 'aggregators' who gathered up self employed to form small business group plans at competitive rates, but Congress changed the law decades ago to forbid that. (Why? There is no why. Somebody bought a law from a Congress, period, and it wasn't the self employed...) The new law has said that the minimum number of employees for 'group' plans was 2, not 1, but that law was being changed in 2016 or so. However...small business small group rates are actually worse than individual rates, and so under Obamacare, what is happening often is, small employers (under 50) who offer small business group plans to their employees are switching their employees over to 'better' individual plans, by the droves. This is a break for the small employer owner -- he drops his costs and at most(maybe)raises W2 by the new cost, to compensate. But he isn't about to raise W2 by cost-plus...and now the employee, instead of having HI paid for out of pre-tax earnings, will be freshly paying for HI out of after tax dollars...just like their employers, who are often "S" corp owners themselves, who have long been paying tax on the value of their HI benefits...
So, a 58 yr old guy who was paying taxes on the value of his $1100/mo plan is ecstatic to only be paying taxes on his $750/mo plan, after having dropped the costs of providing HI for his employees and maybe raising W2 somewhat to compensate. His employees will be getting a 'subsidy' after all. But his 58 yr old employees, formerly paying '0', are none too happy at suddenly paying even half of that $750/mo out of after tax dollars when they were previously paying 0. When all the dust on Obamacare has cleared, the net impact will be more workers paying taxes on the value of their HI benefits-- a fresh new source of taxation for the government and a new burden on working Americans. Ironically, a break for their employers and a new tax on employees...and many of the employees have been convinced to beg for this 'change.' Not since 'the employer half of FICA' has the US government quite pulled off such a tax coup.
The 'cadillac plan' tax is the next incremental increase in taxation, which will round up yet more large employer employees, and finally, when the balance of workers paying tax on their HI premiums reaches a critical mass, all employees receiving HI benefits will be freshly paying taxes on the value of their HI benefits.
This isn't how Obamacare gets 'paid for.' This is the reason for Obamacare. And, working Americans are begging for it.
So, with so many tens of millions getting freshly pushed onto MEDICAID/MEDICARE, what is the state of that program today?
Well, Obamacare has taken over $700B in funding from it over the course of the next few years. (It has to be many years because see below...) Not all states are expanding the program. Doctors and hospitals are opting out of MEDICAID/MEDICARE and its aggressive socialist price controls. So where are they going to go???
MEDICARE program in 1966, when it was introduced: $3B/yr
That can be population and inflation adjusted to maybe $45B/yr today...assuming 0% increase in productivity over 50 years.
2013 CMS(MEDICARE/MEDICAID) Budget: $900B
That is not twice population and inflation, nor ten times, but -twenty times- population and inflation.
What is the tax support for the program? A 2.9% tax on 100% of payroll.
Average Wage Index in America: About $44.3k/yr
Total workers: about 154 million
Total MEDI taxes to pay for program: 0,029 x 154 million x 44.3k = about $200B
$900B....$200B. And this is the fiscal state of the program -before- the massive influx of new enrollees who were told 'free Obamacare' is on the way...this is the state of the program -before- the Boomers futily try to retire en masse...
Obamacare is bending something, alright, and that is, America over from behind.
