On Friday, the House voted 230-189 to pass a stop-gap funding bill to keep the government running past the September 30 shutdown date. However, there’s one major provision — any budget items that fund Obamacare are deleted.
The Affordable Care Act is so large and encompassing, it’s going to have many advantages, and its going to have many disadvantages. Yet, even for those who only see the disadvantages, the defunding effort is a crazy way to make a point. Here’s five reasons why:
First, it risks shutting down the government. The House Republicans are holding the struggling U.S. economy hostage because they can’t find any other way to stop Obamacare. This is a desperate form of economic terrorism.
Second, it won’t be successful. Senate Majority leader Harry Reid said the Senate won’t approve it. The Senate will simply strip the wording from the House bill and send it back to the House. What will the House do then? Will it really allow the government to shut down?
For these first two reasons, the defunding effort will probably cause a political backlash. The House Republicans are playing to their own constituency, and that’s fine. It’s democracy in action. However, so is the reaction. Democrats and moderate Republicans will head to the polls for next year’s mid-term elections. There, they’ll probably vote against this divisive grandstanding.
Along those lines, by this time next year most people will realize that Obamacare is a success for them. It will help millions of people who are now struggling to pay healthcare costs. Read their stories here. It will also make comparing health insurance plans much easier for most people thanks to the health insurance exchanges. Finally, what most Republicans don’t realize it that it won’t bankrupt America. Why? Most of the costs and taxes have already occurred. Defunding Obamacare now would only keep the costs, without providing the benefits.
Last, and also least, it will deprive Congress of health insurance. The Obamacare law requires that Congress purchase insurance from the exchanges. The law wouldn’t change, just the ability to comply with it if Obamacare were defunded. Congress would also lose its personal subsidiy, which is $4,900 or $10,000 for a family plan.
How It Affects You
Get ready for a replay of the 2011 debt ceiling crisis. Republicans are just using the defunding measure to solidify their effort to say no the the debt ceiling, which is due the middle of October. Instead of holding the budget hostage, they will ransom the credibility of America to pay its bills. As a result, expect the stock market to drop, and gold prices to rise, just like they did in 2011.
Businesses Don’t Have to Provide Health Insurance Until 2015
A critical requirement of Obamacare has been delayed until January 1, 2015. The mandate that all businesses must provide health insurance for their employees, or pay a fine, has been waived for a year. Companies complained that the paperwork was too detailed, and everyone involved admitted they couldn’t make it happen by the 1/1/14 deadline. (Source: CNBC, Crucial Rule Is Delayed a Year, July 3, 2013)
The Affordable Care Act of 2010 said that companies with 50 or more employees must provide health insurance, or be fined $2,000 per employee (for all but the first 20 workers).
What This Means for You
Sorry, but the waiver doesn’t exempt individuals from having health insurance by the March 1, 2014, drop-deadline. Exchanges will be open for enrollment as of October 1, 2013, and be operational by January 1, 2014. Those who don’t get insurance will be taxed 1% of the amount of their adjusted gross income that is above the taxable minimum income ($9,500 for individuals under 65, and $19,000 for couples. For more, see IRS 501). No matter what your income is, you must pay at least $95. These taxes go up in 2015 and 2016. For more, see Obamacare Taxes.
However, many people will not have to pay the full price for insurance. Medicaid will become available for anyone earning 133% of the Federal poverty level or less. For individuals, that $14,000 and for a family of four, it’s $29,000. Those who earn 400% of the poverty level, or less, will receive monthly tax credits. For individuals, that’s $43,000 and for a family of four, it’s $88,000 for a family of four.
If you already have a plan you like, you can keep it. However, you might want to compare it to plans listed on the exchanges to find a better deal.