This new health expense holds true for everyone who makes less than $94, 200.00 a year. They all will pay 6.3% of their gross income for the new requirement. Above this amount there will be no Government assistance and the tax payer will pay the entire amount Out Of Pocket (OOP).
The projected actual cost of the policy for a 30 year old man with a 28 year old wife and two children is $1041.00 a month, the OOP for incomes is shown below:
- Income OOP Government Assistance
- $35325.00 $118.00 $923.00
- $47100.00 $248.00 $793.00
- $58875.00 $396.00 $645.00
- $70650.00 $560.00 $481.00
- $82425.00 $653.00 $383.00
- $94,200.00 $764.00 $295.00
- $99,100.00 $1041.00 $0
Now for the really bad news: Obama Care requires that insurance cost for the elderly, but not MEDICARE eligible, not be more than three times the rate for the young, as shown below:
- Income OOP Government Assistance
- $35325.00 $118.00 $2150.00
- $47100.00 $248.00 $2022.00
- $58875.00 $396.00 $1883.00
- $70650.00 $560.00 $1709.00
- $82425.00 $653.00 $1615.00
- $94,200.00 $764.00 $1523.00
- $99,100.00 $2268.00 $0
If you are young and healthy the government will assist you with about 89% of your cost at the lowest rung of the income level. But, if you are old they will pickup 95% of the cost. That's 95% of the cost of insurance priced 45% higher more than the young families policy price.
If you use my two neighbors as examples the inequity of this becomes apparent. My wife's friend is a single woman who is 64 years old. Last year she visited her doctor monthly and was hospitalized and had surgery twice. My young friend across the street is in his early thirties. He is married and has two children. They visited the doctor once for a required physical for a school athletic program for which they payed $124.00 to the doctor.
So who do you suppose really need the insurance? It's a no brainier.
What happens if you don't buy insurance? In 2015 when you file your Income tax return you will be penalized $95.00 for each adult and $47.50 per child. In our example this would be $283.20 this verses a total outlay of $1416.00 had they bought insurance. A savings of about $1000.00 for the year if you assume they continue to see a doctor once each year.
In 2015 the penalty triples to $325.00 per adult and $162.50 per child for a total $975.00. A wash as far as cost goes so they would be smart if the purchased the insurance.
A young couple with two kids would owe no income tax but would pay $4451.00 in Payroll taxes and health care insurance. Leaving them $30794.00 to live on or $598.00 a week as take home pay. Average rent in our area is $1100.00 a month and car insurance is approximately $125.00 a month. Utilities run $250.00 a month. Assume $60.00 a week for gasoline and you have a total of $380.00 of weekly expenses. Leaving $218.00 for food and entertainment. If you are frugal and always eat at home you and spend as little a $5.00 per day per person or $140.00 a week. Buy Cable TV at $60.00 per month and you have $180.00 a month left to save for your retirement.
You can try your own insurance cost by going to the link below.
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