Cost of ObamaCare: Obama Care Cost

What Does ObamaCare Cost?

What is the cost of ObamaCare? ObamaCare, Obama's new health care law, is said a massive impact on health care costs. ObamaCare's cost is estimated at up to $1.1 trillion dollars over the next 10 years. The truth is that Obamacare costs, it will save the government money by reducing the health care costs of many Americans via a healthcare plan that results in a net decrease of the deficit.

Obamacare is projected to cut the national deficit by over $200 billion during it's first 10 years and over $1 trillion over the next two decades. This helps offset the up-front cost of ObamaCare which is shared by taxpayers and cuts and reformations to the health insurance and health care industry.

The Cost of Not Having ObamaCare

The cost of not having ObamaCare?:  In a study by FamiliesUSA reported that each week 502 Americans die due to a lack of health insurance. That is 2,175 Americans dead each month. The true cost of Obamacare isn't in healthcare costs and taxes, it's in the lives of Americans like you and me.

The same study showed that between 2005 and 2010 that the number of people who died prematurely due to a lack of health coverage a year rose from 20,350 to 26,100.

(These figures are from 2010, Obamacare signed on Oct 1st 2010 made its first steps toward providing quality affordable health insurance to individuals and families struggling with rising health care costs.)

So while there are costs, it is both economic reform and healthcare reform that will decrease payments of many Americans and only impact those who can afford to pay a little more.

The cost of not having ObamaCare isn't just a human issue. ObamaCare helps to reduce health care spending. Currently the $2.8 trillion U.S. healthcare system costs nearly $9,000 a year for every man, woman and child. Growth in health care spending has long outpaced inflation by wide margins, and following the U.S. recession of 2008 and 2009 has contributed to weak job creation, low expansion of wages and a high level of personal bankruptcies.

ObamaCare Cost for The Federal Government

The ObamaCare cost for the Federal Government is a $1.1 trillion net cost. This number is an updated estimate by the Congressional Budget Office (CBO). However, a number of factors including taxes, fees and penalties will reduce the federal deficits by $210 billion over the 2012-2021 period.

Gross additional costs of ObamaCare include $1.5 trillion for Medicaid, the Children's Health Insurance Program (CHIP), as well as tax credits and other subsidies for the ObamaCare exchanges and small businesses, among other things. These costs are offset by penalty payments, health care cost cuts, new health care industry taxes, and a new excise tax on high-premium insurance plans.

Want to know more about the cost of ObamaCare check out the CBO Budget 2013-2014 or our resources page for more official documents detailing ObamaCare's costs and how they fit into the US budget..

How Do We Pay For ObamaCare Costs?

Many sections of the Affordable Health Care Act cover the cost of Obamacare and how we will pay for national healthcare reform over the next decade. Here are some of the measures that will help pay for the Obama's healthcare reform:

First in order to help pay for the cost of Obamacare businesses and families will pay an additional .9% tax on taxable income and 3.8% capital gains exceeding $200k / $250k.

Obamacare also cuts $716 billion from Medicare and invests it back into Medicaid, Medicare and the healthcare system, so a lot of the money is coming from cutting waste, not just in Medicare but in the health care industry as a whole.

There is also a $63 dollar fee on insurance plans (it decreases every month until 2017) that covers high-risk pools for pre-existing conditions.

Most of the other funding for ObamaCare comes from taxes on the healthcare industry including, a tax on companies who manufacturer non-generic drugs and some medical device manufacturers. Read the complete list of ObamaCare taxes and their costs.

Most American families, those making under $250k will see up to a $4k reduction in their healthcare costs after tax credits, of course the more you make the less you save. The quality of your healthcare and the security of knowing you can't be dropped for be sick or denied for a preexisting condition is a protection most Americans couldn't rely on before ObamaCare.

If you choose not to purchase insurance (and can afford it) there is a 1% tax in 2014, it raises to a 2.5% tax in 2016 and adjusts for inflation. This tax is the "income tax" you may hear about, and is the only income tax hike in ObamaCare and the only tax most Americans will pay.

In order to ease the burden of Obama Care's cost 19 million Americans will receive tax credits to help pay for healthcare.

Costs of ObamaCare for Small Businesses

While most people and small businesses in the United States will benefit from Obamacare, Obamacare will cost employers with over 50 employees a penalty if they do not choose to provide their workers with affordable and reliable health care. Individuals will also pay a tax penalty if they choose not to purchase insurance to help offset costs. The tax is $2000 per worker or $3000 if they buy insurance through the exchange.

This system is like the current unemployment tax already in effect which requires American businesses to pay a modest and fair tax to aid the state run unemployment and workers compensation programs. With ObamaCare the penalty helps pay for workers who will buy insurance through the exchange or need emergency services, both which will drive the cost of health care up for the rest of us.

Who Qualifies for Help With ObamaCare Insurance Costs

The following chart will help you to find out who qualifies with help with insurance costs under The Affordable Care Act.

Many American families will see a cost reduction under ObamaCare and many more will qualify for Medicare and Medicaid due to the expansion of the program. When the online marketplace opens on OCT 1st, 2013 a easy to use form, cost calculator and an easy to use comparison of insurance options will help you pick the right plan for you and your family.

Employers with under 25 full time employees may qualify for tax credits and tax breaks.

In order to ease the burden of Obama Care's cost 19 million Americans will receive tax credits to help pay for healthcare.

If you are making over 400% of the poverty line you can expect to pay just about what you do now, except receive better coverage. If you make under you will most likely save on health insurance costs. Individuals making between $50k and $75k AGI (9% of Americans) who don't want insurance and will have to pay the 2.5% penalty (by 2016) will most likely be hit the hardest.

ObamaCare Cost for the Average Family

No one truly knows what ObamaCare will cost. Common estimates for an average family of 4 range from around $7,000 a year to $30,000 a year depending on factors such as age, health status and region. To get a more in depth look please refer to our sections on the Health Insurance Exchanges, ObamaCare Premiums, ObamaCare Taxes and our study of the recent IRS report on ObamaCare.

Cost of ObamaCare: What is Considered Affordable Health Insurance?

Currently the average American family pays 20% of their income for health insurance. ObamaCare deems insurance that costs 8% of a families income as "affordable". The averages families costs are projected to decrease between 7 and 9% due to ObamaCare. We have seen costs range from free to an excess of $30,000 for an older high risk, high income family of 5 in a State with high regional costs.

Graph represents combined health care costs for employees and employers. Employer Based Health care costs for a family of four have doubled in less than a decade from $9,235 in 2002 to over $19,000 in 2011.

ObamaCare Cost Calculator

Use this ObamaCare cost calculator from the Kaiser Foundation to get an idea of the cost of ObamaCare for you and your family after subsidies. Please be aware this is a basic estimate for the cost of a 'silver' plan (the second tier plan, as opposed to the basic 'bronze plan' on the Exchange). Also note, the total cost is greatly affected by "regional cost factor" (increasing or decreasing the premium by 20%). Further subsidies may be available depending on a number of other factors.

How Much Does ObamaCare Cost The Average American?

Your insurance premium costs (plus out of pocket costs and co-pays) are based on a number of factors including your adjusted gross income, the quality of coverage you purchase and where you purchase your coverage. ObamaCare regulates insurance companies, but you will still be purchasing private insurance (unless you choose to pay the penalty or are covered under Medicaid/Medicare).

So what is the true cost of ObamaCare? ObamaCare costs what people can afford. For many Americans this means better coverage for less money, for many it means coverage over no or poor coverage, for others it means paying a little more to ensure healthcare for millions of uninsured Americans. Let us know what ObamaCare costs you and we'll share your story.