Whether you are a supporter of Obama’s healthcare plan, the Patient Protection and Affordable Care Act, or Obamacare as many people know it, or not, it was passed into law in 2010. We have already seen some of the effects of the law, and in the coming years it will affect our lives even more. The fact remains that people are uninsured, and the law seeks to provide coverage for everyone. While most people understand the basics of Obamacare, many do not understand how it will affect them in 2013 and beyond.
The biggest effect that the new law will have in 2013 is a number of new taxes being imposed. While most people will not see their income taxes go up on paper, they will end up paying more in taxes to help offset the costs of Obamacare. There are 6 big increases that many people have not even heard of.
There will be a new 2.3% medical device tax. This means that the sale of any device produced for medical reasons will be taxed at 2.3%. From MRI machines to prosthetic limbs, the cost of medical devices is going to increase. These costs will be assuredly be passed on to the patient.
Currently a person can deduct medical expenses if they are 7.5% or more of their income (this does not include insurance premiums). Starting in 2013 that number will increase to 10%. While an additional 2.5% increase does not seem like much, it will cause a lot more people to be paying taxes on money they never really got to use.
Currently those with a flexible spending account (that is a tax deductible account used for medical expenses) can deposit and unlimited amount into it. Starting next year, that amount will be capped at $2,500. In an age where getting braces on your teeth can run you upwards of $7,000 capping the amount allowed into these accounts will hit many people hard.
The increase in capital gains tax, the dividend tax increase, and the Obamacare surtax addition have been hitting the news lately. It is possible that those who are high income earners ($250,000+ per year) will see their dividends start to be taxed at over 43% rather than the current 15%.
Medicare payroll taxes will increase. Most people will not feel this increase, but employers will. The increased cost of employing people could cause many to cut back on their workforce.
You may have seen some news about a 3.8% real estate tax. While it seems imposing, it most likely will not be felt by many people. The tax is only for those who earn over $250,000 and are selling their home with a net profit of over $250,000. Furthermore, the tax is only imposed on any profit over the threshold. Most people do not see all of these conditions met when they sell a house.
There are actually about 20 different taxes being imposed in the next few years, you can read the full list from Jeff Duncan.
Other than taxes there will not be too many changes during 2013. Employees will start to see on their W2’s that the benefit they received in the form of paid insurance premiums will be listed. The insurance exchanges are set to open in the fall, and by the end of the year employers with over 50 employees will see a fine of $2,000 per employee (over 30 employees) if no insurance is offered.
There are big changes coming in the next year. Most people will have to tighten their belts to help pay for medical expenses. While the program is set to tax those who are the highest income earners the most, even those at the bottom will feel the pinch. More taxes, higher insurance premiums, and higher costs for care are most likely going to be the result of Obamacare.