How Your Finances May Be Affected by 2016’s ACA Changes

How Your Finances May Be Affected by 2016’s ACA Changes

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One of the unique features of the Affordable Care Act, better known as "Obamacare" is the gradual evolution of its scope and requirements. When the law was passed in 2012, it had a relatively small effect on the average person. However now, four years later in 2016, many of the things you thought you knew about the ACA may have changed. Some of them have changed dramatically.

Mandated Costs

For both individuals and businesses, the mandated costs of compliance with the Affordable Care Act increase considerably in 2016. For individuals, the fee for not having insurance rises to nearly $700 while for employers, costs can climb well into the thousands for each full time employee without minimal health coverage.

New Fees

While these fees are technically taxes, they exist in kind of a gray area between more traditional kinds of taxes and government fees like those that might be paid for access to a national park.

What we do know is the cost of not having health insurance, while not yet higher than the cost of a mid-tier policy, will be much higher than before. For employers, the thresholds are lower than before, so even having smaller numbers of full time employees will subject those businesses to the same requirements as larger companies.

Higher Premiums

An expert with a master’s in health policy says that, with so many changes on the individual and business mandate side of the equation, some insurance carriers are predicting rate hikes during this year. While there are facilities in place to keep a lid on the most egregious examples of this, the fact is many policies are going to become far more expensive, which may put a much larger burden on the insured. Included in these rate hikes will be changes in some deductibles which could have the effect of putting policies out of reach for some, even if they can afford the premiums.

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Policy Choices

Most insured individuals and almost all businesses may find they need advanced help figuring out the balance between the costs of new and higher premiums, government fees and taxes and the overall costs of the policies they choose. It will be understandable if many find they are unable to make a choice that doesn’t result in higher costs overall. What remains to be seen is how those costs will affect the sustainability of the new structure.

The Affordable Care Act is still in the process of being introduced, so it is likely there will be more time and effort required to consider its full implications. This year will be drastically different, and everyone needs to prepare.

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