50+ Lifestyles

“Affordable” Care Act – A Real Misnomer

By Richard J. Schillig, CLU, ChFC, LUTCF
Independent Insurance and Financial Advisor

The Patient Protection and Affordable Care Act was initially passed into law in 2010, with various provisions gradually phasing in over the years. January 1, 2014 is an important date for implementation of this law, referred to as “Obamacare.” The New Year brings in the requirement for all states to have up and running Insurance Exchanges. These Exchanges are known as the Marketplace. Actually the Marketplace Exchanges are required to be up and running Oct 1 allowing consumers the option to shop for major medical insurance, using the Marketplace to compare plans, premium costs and then actually enroll in a major medical insurance plan. The new insurance will then become effective January 1, 2014. Further, the Marketplace will allow consumers to determine eligibility for government subsidies in order to help pay the cost of insurance. I encourage you to review the Insurance Marketplace at www.healthcare.gov. Among other things, Obama Care mandates that insurance plans accept everyone applying for coverage without underwriting or pre-existing conditions.

Recently, I came across an article from Blue Cross Blue Shield of Illinois entitled “Understanding…Affordable Care Act Fees.” This article explains the fees health insurers will be required to pay as Obamacare continues phasing-in. Fees included the annual Health Insurer Fee, the Transitional Reinsurance Program Contribution Fee, and the Patient-Centered Outcomes Research Institute Trust Fund fee. These fees will be paid by major medical insurance companies.

Mandates, fees and the added government personnel to maintain Insurance Marketplace and oversight all combined are going to have the impact of creating huge increases in the costs of insurance. That’s the misnomer. Health insurance costs will become everything but more affordable. Health insurance costs will actually become less affordable. However, other provisions of Obamacare allow for government subsidies to help offset those increased health insurance costs for the consumer. Uninsured persons applying for major medical insurance coverage through the Marketplace may become eligible for a government subsidy. You know who will ultimately pay increased costs. Naturally, the ultimate payer of these costs will be the American Taxpayer. Obamacare will cost us in taxes.

Strategies that will help minimize and reduce rates of tax are available from the annuity strategies we use with our clients. Federal and state income tax plus the tax on social security retirement income, along with the Medicare tax, could be favorably reduced with the use of creative annuity strategies. We welcome the opportunity to discuss these options with you to determine if applicable for your situation.

We will continue to offer our Retirement Analyzer service during the month of September. Please note our Granite City
dinner meeting on our ad below.

Enjoy these coming beautiful fall days.