Pub. 3 2013 Issue 3

15 At the same time, some states are cooperating and some states are exploring perceived wiggle room to see just where they can get away with business as usual. It’s anyone’s guess what the final law is going to look like. The big problem is the cost. You already know that U.S. healthcare is expensive. The motivation behind healthcare re- form is the promise of lower premiums down the road as the U.S. healthcare system becomes more efficient. Unfortunately, we are a long way from that point. • Many experts are worried that short-term costs will increase and that those costs will be passed on to consumers who can ill afford them • The Congressional Budget Office estimates that government spending on health care will increase from the current rate, which is 17 percent of the gross domestic product, up to 25 percent in 2037. • State Medicaid costs are going to increase. States will be required to cover everyone who makes up to 133 percent of the federal poverty level. That means millions of working families are going to be eligible, not just those who are officially defined as poor. Although federal funding will pay for this expansion until 2017, states will have to start taking over after that point. States will also have to pay more for doctors and more for medical facilities because they will have to deal with many more patients than before. • By 2014, states will have to set up Small Business Health Options Programs, or exchanges, where small businesses can create purchasing pools. A larger pool of people, obviously, has an advantage over a smaller group when it comes to buying insurance. The size of the businesses that can join will vary from state to state. A small business is definitely not more than 100 employees, but states can also limit the pool size to companies that have no more than 50 employees through the end of 2016. If a company outgrows the size limits, it will be grandfathered in. The advantage of bargaining for insurance as part of a larger pool should cause premiums to decrease. • Taxes are going to go up for those who are wealthy. In January 2013, there will be a Medicare surcharge of 0.9 percent for individuals who earnmore than $200,000 per year; for families, the magic number is $250,000. There is also a 3.8 percent tax, aimed at wealthy citizens, that will tax “unearned income.” Getting good professional advice – in the form of an insur- ance agent – is key when it comes to deciding how to navigate the changes to come. The best strategy for you is going to depend, to some extent, on whether you already offer insurance to your employees. Below, some important points to consider and discuss. The Tax Credit If you have a small enough business, Obamacare still might not affect you negatively. For example, very small businesses Q Obamacare — continued on page 16