In a 5-4 vote Obamacare also known as the "Affordable Care Act" (ACA) passed. We will have Obamacare starting in 2014. In plain english, here are some of the highlights of the program.
Americans must sign up for healthcare by 2014:
Congress did order Americans to obtain - and to keep up every month - what it called "minimum essential coverage". Congress in the ACA made the mandate depend upon an assessment for those who do not sign up or maintain health insurance. For those who do not signup and maintain health insurance a federal "tax" will be imposed and paid to the IRS. Whether you obtain insurance or not, you will be treated under the new act.
What is the penalty and how will it work when it goes into effect 2015 for 2014 tax year?
The "Affordable Care Act" (ACA) uses complex formulas to determine how much the penalty will be, but in general it is calculated each month the individual does not have health insurance, and it is to be paid as a flat amount or as a percentage of household income. If it is to be a flat dollar payment, the law starts at $95.00 a year in 2014, $325.00 for 2015, and $695.00 for year 2016 (each month's assessment is 1/12 of those totals). After 2016, the monthly amount is to be adjusted for a cost-of -living amount. If it is assessed as a percentage of household income, it starts at 1% of a base amount in 2014, to 2% in 2015, and 2.5% after 2015. The failure to buy health care insurance shifts the cost for the uninsured to health care providers, insurance companies, and everyone who does have health insurance.
Medicaid:
The courts decision on Medicaid expansion is divided and complicated. The main focus is.
A) Congress acted in offering states funds to expand coverage to millions of new individuals;
B) So states can agree to expand coverage for exchange of those new funds.
C) If the state excepts those expansion funds, it must obey by the new rules and expand coverage.
D) A state can refuse to participate in the expansion without losing all of its Medicaid funds; instead the state will have the option to continue with its current no-expanded plan as is.
Bottom Line: Stocks did not like the outcome of this act, as markets initially sold off after the decision was public, but later rallied to close down just slightly. Health care companies were down with the market on an even basis.
