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Monday, January 28, 2013

Key Ways In Which New Health Care Law Will Affect Americans

President Obama Signs Affordable Care Act
The Affordable Care Act will begin to affect most Americans in 2014. How much of an impact it has on each individual depends on whether or not they currently have insurance, their age, income level and health.

One of the primary changes will be for those who do not have insurance. The new health care law will make it easier for them to find affordable health insurance. For those who do not have insurance and chose not to purchase insurance, a change they need to be aware of is the penalty they will face for not buying insurance. The penalty starts at one percent of income in 2014 (or $95) and increases to 2.5 percent by 2016. Exceptions may be made for those who have financial hardships, are American Indian, or refuse to buy based on religious beliefs.

Senior citizens should be aware of the changes affecting them if they purchase Medicare Part D prescription drug insurance. The big change is in what is referred to as the "donut hole" coverage phase. The donut hole is the gap between the time a person reaches the initial coverage limit to the time when the catastrophic-coverage threshold in the Medicare Part D prescription-drug program begins. During this time, medical expenses must exceed $4,550 out-of-pocket before catastrophic coverage kicks in. Before the Affordable Care Act in 2010, these expenses were paid in full by the insured. In 2010, they received a $250 rebate from Medicare. From 2011 to current, that increased to a $50 discount on brand drugs. By 2020, the Affordable Care Act will close the gap with more discounts so insured elderly will only be paying 25 percent of the costs.

Young people under 27 who cannot get insurance through an employer can remain on their parents' insurance plan until they reach age 27.

Individuals with incomes of $200,000 or more per year ($250,000 for couples) will see Medicare taxes increase from 1.45 percent to 2.35 percent.

Individuals with incomes of $44,000 or less ($88,000 for families of four) may qualify for government help in paying their health insurance. This would be in the form of a subsidy that would be paid directly to the insurance company.

Deductibles for unreimbursed medical costs on tax returns will increase from 7.5 percent to ten percent, which means the costs must exceed ten percent of income in order to claim them as a deductible on taxes.

For those who have insurance coverage through employer-sponsored plans, it is possible to see a decrease due to the government regulating how much profit insurance companies can make on company plans.

These are some of the key areas that will affect many Americans in 2014 and beyond. It is important to understand these changes and prepare for how they may affect families and individuals personally.
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