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The Real Cost of Obamacare

Like it or not, in less than a year – January 2014 – the core of U.S. President Barack Obama's healthcare reform goes into effect – and recent data show the cost of Obamacare will be quite high.

The statistics are startling, seeing as the intent of Obamacare was to reduce overall medical costs in the country – one big reason government spending is running wild – by improving access to treatment for Americans. An additional 30 million Americans are expected to be covered under Obamacare.

But new reports estimate the new healthcare system could cost about $1.3 trillion over the next 10 years.

That means the original outcome – which President Obama said would be to "cut the cost of a typical family's premium by up to $2,500 a year" – is far from reality.

Here's a breakdown of what Obamacare will really cost you – and your job could be included.

The Real Cost of Obamacare

By 2014, all Americans will be required to obtain health insurance coverage, or pay a penalty to the Internal Revenue Service. Exchanges or marketplaces will be set up in all 50 states by January 2014 so both individuals and businesses can shop for health coverage.

The IRS, in a final regulation issued Jan. 30, estimated that under Obamacare the cheapest plan for a family of four or five will cost $20,000 per year by 2016. The government will subsidize those who cannot afford to pay for the coverage.

That's more than $4,000 higher than what families pay now.

Annual premiums for employer-sponsored health insurance for a family of four averaged $15,745 in 2012, with workers paying $4,316 toward the cost of their coverage, according to a survey by the Kaiser Family Foundation and the Health Research & Educational Trust.

The penalties for individuals who don't obtain health insurance are to be capped at either the average annual bronze premium, 2.5% of taxable income or $2,085 in 2016.

Businesses face steep costs as well, especially since the fiscal cliff deal, which eliminated some of the tax breaks for employers to provide health insurance. That means fewer companies will choose to provide work-based coverage, which means insurance costs for many will increase as they have to buy their own plan or pay a penalty.

According to a recent report by the Congressional Budget Office, 7 million people will lose their job-based health insurance – up from the previous estimate of 4 million, thanks to the eliminated tax breaks.

Businesses with 50 or more full-time employees will be required to get health insurance for their employees or face fines of at least $2,000 per employee. Small businesses may therefore be tempted to stay under the 50 full-time employee limit to avoid the harsh penalties.

Businesses and public-sector employers also will cut employee hours to avoid providing health insurance. Virginia plans to limit part-time state employees' work weeks to 29 hours, to avoid providing coverage for those working 30 hours or more per week. The added insurance coverage would cost the state tens of millions of dollars a year.

Obamacare will also have wide-ranging cost effects well beyond the requirement for individuals and businesses to have insurance.

Drug and medical device companies will also pay more in additional taxes. Health insurance firms will have limits on how much profit they can make from charging premiums. Any health insurance price hike above 10% will be automatically reviewed by authorities in each state.

>>The idea that the country's new healthcare system will save you money is just one of the seven big Obamacare lies we've been told. Read six more startling untruths about Obamacare.

>>Then check out Hidden Obamacare Taxes.

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Join the conversation. Click here to jump to comments…

  1. Ken Mcclelan | February 12, 2013

    in case that didn't sink in to some of you Obama voters, that figures out to be an EXTRA $1,666 dollars a month for all who have to go out and buy insurance to help fund insurance for the 20 or 30 million new voters Obama is buying through his path to citizenship. most families I know would have a hard time coming up with an extra hundred dollars a month… so where are they supposed to come up with an extra 1 thousand, "666" dollars from? is it any wonder many people have taken to calling our president the Obamanation that causes desolation? may God forgive you for what you've brought upon your friends family and neighbors.

    • EdInvests | February 13, 2013

      Far less costly than the two unnecessary wars of the former two term guy, and this administration will probably not end in a totally collapse of the economy. I guess if God really had anything to do with anything we would stop wars and heal people, stop tonadoes from destroying churches, and never let a Christian suffer cancer. Maybe Obama is Gods Will. That seems to explain everything, doesn't it?

      On the intelligent side, healthcare costs have been going up at huge rates for decades, and with, or without Obama care. It is also just a forecast that probably has as much political spin as fact. The true facts are that the majority of people with great and afforadable healthcare are government employess, but nobody seems to find that strange. I do, and that can be fixed. Next up is government pensions. We certainly get all worked up over the wrong things.

      • Dave | February 15, 2013

        Based on the numbers in the article, it would actually be far MORE costly that what Bush and a Democratic CONgress spent on those wars. You fail to mention the fact that O still hasn't gotten us out of those wars, and he's gotten us into multiple other conflicts. Dems also seem to forget that Bush inherited a bubble economy on the verge of collapse as well. For all he did wrong, I will give him (or his advisors) credit for spotting the imbalances and urging CONgress to take action very early on in his presidency. Barney Frank and the gang openly ridiculed him for wanting to reighn in Fannie/Freddie while O was busy filing lawsuits against banks for not lending to people with no ability to ever pay back the money.

      • thatch | February 28, 2013

        Yeah, but the left caused the mortgage meltdown too by doing to it just what they are doing to healthcare. When you play the social justice card and interfere in the markets you always end up causing misery and penury just like the Federal government did with Fannie/Freddie and with the CRA. The left doesn't even have a narrative to explain how it is anything but their fault… they just got lucky Bush was in office when the inevitable happened and luckier a still that the average intelligence of the American voter is so low that they don't understand cause and effect.

    • Linda | February 17, 2013

      He has set up total destruction for our economy and our way of life. He is putting policies into effect that will create an enormous police state, with shortages of everything for everyone. how could this happen? I am beyound heartbroken as to what we are leaving to our grandchildren. Any investments or money you could prepare with, appears that it will be seized, there is no escaping this new tyrannical government, I wish there were something that could be done. Leave the country? where would you go? this is a global problem. What is the answer, why cant he stop spending an imposing laws and rules which are destroying the us and the world?

      • Not so quick | February 25, 2013

        Spoken like true GOPers. You "experts" on the subject of health care and health care costs amaze. What a crock.

        • Ozfest | July 22, 2013

          You're the crock you socialist Marxis. When the takers become larger than the givers, where are you going to get your free stuff from?

      • Bill Hicks | March 20, 2013

        You're so funny. You blame Obama, then you say you can't leave the country for a better situation because it's a "global problem". LOL! Apparently, in your diseased conservative mind, Obama's not only President of the U.S., but he's King of the World!

        LOL at conservatives. Just as dumb as rocks.

        • bill | October 7, 2013

          maybe were as dumb as rocks but we are not arrogant tyrannical pricks

  2. Jacob Cadena | February 12, 2013

    The $20,000 premium you suggest the form is anticipating is merely an "example" amount. Nowhere in the Deapartment of Treasury report is it stated that these are "predictions" of the premium rates. Nice try though.

  3. g | February 13, 2013

    As usual Obama lies to the American people about Obama care and just about everything else that comes out of his moutn!!!!!!!!!!!!!

    • bill payer | May 23, 2013

      You've obviously been watching Fox News where everything they say about Obama is a lie. Your brain has turned to mush. If you knew the truth, you'd be ashamed of yourself.

      Obama is the most honest and truthful politician currently holding office in America.

      • Hazim | August 6, 2013

        The IRS scandal, bengazi and us loosing 4 pseople including an ambasador, not going to inforce some of the laws because he thinks they are wrong instead of repealing them (wellfare reform). I think you are hopelessly lost. You are being lead to the slaugther house and you do not even know it.

      • Keith | October 10, 2013

        Honest? The man just lied to the nation when he said that raising the debt ceiling will not raise the debt. What bloody planet ,(sorry, I forgot that he came from Kenya) did he learn economics?

  4. Joel Gallob | February 13, 2013

    All this misses the additional costs that the creation and activation of many new commissions & etc will build into health care costs, and the further inflation that they will cause in costs by many new regulations.

  5. City On A Shining Hill | February 16, 2013


    Americans vote for our politicians, and we only have ourselves to blame for the state of our economy and the direction of our nation. If we want the government to run everything, then that always results in a loss of freedom.

    Unfortunately, business owners get stuck with all the taxes, regulations, etc our politicians put on them, and thus must now choose between hiring full time workers with health insurance and other benefits, or just hire contract and part time employees to help with the increased business.

    Europe is experiencing this right now, and unless they change their labor laws, high unemployment there will keep their economies slow.

    It is always fairer to tax consumption, rather than incomes, to provide incentive for young people to start their own businesses, and then hire out of work Americans.

    But, Woodrow Wilson and FDR thought differently. They started the IRS!!

    And, maybe we need to hit the gym, get our BMI down to a healthy 13-14%, and start eating right. That alone would save billions in health care costs and save our economy.

    • thatch | February 28, 2013

      It is not an accident that unemployment is always high in socialist countries just like it is not an accident that we are slow recovering here and most people remain out of work. This is what socialism is. You punish people for hiring and earning so you get less hiring and earning. It is not rocket science. You trade your freedom for what you think is security and in the end you find you have neither.

  6. jomama | March 18, 2013

    For an actual, thorough article outlining the costs of obamacare by demographic, read Paul Craig Robert's piece on the matter:

    *spoiler it's still going to be even more unaffordable whether you've got the attention span to read the entire synopsis.

  7. Murphy Hill | March 18, 2013

    I love my country its in the government the terrifies me!!!

  8. Raymond Erickson | March 19, 2013

    I invite fellow Americans to consider myactual experience with the "socialist"/"communist" (a lot of Americans don't know the difference) health care system in Germany. In November 2012 I had a kidney stone emergency that resulted in an operation at the Leipzig University Hospital. The procedure necessitated full anesthesia and I was kept overnight in a private room (in the spotless, spanking-new hospital, I should add). The operation took place the next business day (Monday) after I met with the chief of urology at the hospital on the previous Friday, although I was told I was welcome to come in during the weekend in case my pain justified it. (The urologist was–I later learned from other physicians, including one born in Los Angeles who preferred living/working in Germany–one of the best in Europe and even the world, although there was no added cost because of that.) The bill, which I paid with my VISA card came to a total of $1143 (about a tenth, I am told, of what it would cost in the US). Anybody want to compare that with their experience in the USA?

    The reason, of course, is that the USA is the ONLY health care system in the developed world in which PROFIT (not the well-being of the citizenry) is the main consideration. There are about 200 health insurance companies in Germany, which offer the widest array of possible coverages; however, they are all NON-PROFIT corporations, which means that what motivates the CEOs has to be offering the best service for the best possible price in order to get more subscribers (real capitalism at work!); moreover, costs are kept low by the fact that EVERYONE is required to have health insurance. The downside of this is that the CEOs don't earn $30 million/year or whatever, which somehow doesn't bother me very much; I assure you that, despite this, they do not starve (unlike a lot of uninsured people in the USA.) Nobody in Germany loses their home because of medical costs.

    In addition, Germany's health statistics in general are far superior than those in the USA. Don't let those politicians (who prefer to bury the facts for ideological reasons) who say the US has the best care in the world get away with their lies!

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