journey toward financial freedom flora digby and sheila m. wilkinson-sanders economic development...

Journey Toward Financial Freedom

Flora DigbyAnd

Sheila M. Wilkinson-SandersEconomic Development Chairs

Phase II – Plan In Motion Income Taxes & Obama CareIncome Taxes & Obama Care

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On March 23, 2010 The Journey Continued . . . On March 23, 2010 The Journey Continued . . .

Our President Barack

Obama signed the

Affordable Care Act

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Objective

To provide COMPREHENSIVE health insurance reform

Reform IMPACT will expand 4 years and beyond

To promote INDIVIDUAL health care responsibility

Open enrollment begins 10/1/2013

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Application ProcessApplication Process

As with all new programs the application process may be OVERWHELMING TIME CONSUMING COMPLEXand will be posted online by the Health & Human Services Department

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When the dominos fall, the three main

groups of tax payers impacted will be:

[1] Uninsured – to apply through new state based insurance markets

[2] Middle Class – be eligible for tax credits to help pay private programs

[3] Low Income – be steered toward Medicaid

Who is Impacted !Who is Impacted !

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ALL Americans will be required to

have Health Coverage.

Those without Health Coverage could face a penalty of $95 or 1% of the household income ~ whichever is GREATER

This penalty will continue each year to a max of $695 or 2.5% of household income ~ through 2016

By The Year 2014 By The Year 2014

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The Affordable Care Act was signed in 2010 and the ground work was laid at that time.Let’s look at the annual impact of the act beginning with Prior 2012 and go forward.

Where Does It All Begin?Where Does It All Begin?

MULTIPLE YEAR IMPACT !

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Δ MEDICAID – States given additional federally matched funds to cover additional low income family coverage

Δ SENIOR “Donut Hole” occurs when Seniors reach the coverage gap for prescription drug coverage; Seniors given One Time tax free $250 rebate check

Prior 2012Prior 2012

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Δ EARLY RETIREES – Expansion of medical coverage for those between 55 and 65 years of age

Δ PREEXISTING CONDITION [PCIP] – Those uninsured for at least 6 months because of a preexisting condition; prohibited 2014

Prior 2012Prior 2012

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Δ INTEGRATED HEALTH SYSTEMS – effort to encourage physicians to join ACO, Accountable Care Organizations

- organization promotes a synergy of services to

help prevent disease and reduce unnecessary

hospital admissions

The Year 2012The Year 2012

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Δ PAPERWORK & ADMINISTRATION COST REDUCTION –

[1] standardize billing

[2] encourage electronic information exchange

[3] reduce costs associated with paper, ink, etc.

The Year 2012The Year 2012

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Δ HEALTH INSURANCE MARKET – Concept introduction; place where individuals and small businesses can buy Affordable & Qualified health benefit plans

Δ PREVENTIVE HEALTH COVERAGE – Efforts that encourage preventive techniques, i.e. Wellness Programs

The Year 2013The Year 2013

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Δ MEDICAID PAYMENTS – Increased for Primary Care doctors paying 100% of the rates – federally funded !

Δ BUNDLING – Pilot Program of encouraging hospitals, doctors and other providers to work as a team and agree to payment at a flat rate

The Year 2013The Year 2013

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Δ OPEN ENROLLMENT begins October 1, 2013

The Year 2013The Year 2013

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Δ HEALTH CARE REFORM !

The Year 2014The Year 2014

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∆ Some of the Pros of the HEALTH CARE REFORM include:

∆ Online applications

∆ Online what if scenarios after answering a few questions

∆ Online Clearing House called Data Services Hub, which allows the systems of services to interact and provide options based on information provided, i.e. Social Security, IRS, Homeland Security

2014 - Reform2014 - Reform

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∆ Some of the Cons of the HEALTH CARE REFORM include:

∆ Cumbersome applications

∆ Changes in household income requiring additional documentation

∆ System based upon income from 2012

2014 - Reform2014 - Reform

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∆ The HEALTH CARE MARKETPLACE will be available to compare companies and prices

∆ Increased access to MEDICAID available

∆ Those interested in applying have income limits of $14,000 for Individuals & $29,000 for families of 4

The Year 2014The Year 2014

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Income for 2012 Impacting 2014

Δ What should be done at this point:Δ 2012 - income is the basis for the reform

platformΔ 2012 – income is earned and documentedΔ 2012 – can reduce income by making

retirement contributions

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Income for 2012 Impacting 2014

Δ What should we pay attention to:Δ 2012 - the LAST year that medical costs over

7.5% over the Adjusted Gross Income can be deducted

Δ 2013 – the deductable amount increases to 10% over AGI; IF you turn 65 before

12/31/13 you will continue to use 7.5%

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Income for 2012 Impacting 2014

Δ What should we pay attention to:Δ 2013 – high income earners will pay an

additional .9% Medicare payroll tax OVER $200,000 individuals / $250,000 couples

Δ 2013 - high income earners will pay a 3.8% Medicare tax on interest, dividends, capital gains, rent & royalties

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Continue the Journey

Affordable Care Actfor all the details of the act

HealthCare.gov

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Continue the Journey

Will post on website www.ChicagoDeltas.com

Will post of Facebook www.facebook.com/chicagodeltas

Will post on Youtube pageCACEconomicDevelop

Send questions. CACEconDev@gmail.com

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Continue the Journey

Join us next month for ARPIL - 30 Days of Financial

Fortitude

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Share the Knowledge

Journey Toward Financial Freedom

Flora DigbyAnd

Sheila M. Wilkinson-SandersEconomic Development Chairs

Phase II – Plan In Motion Income Taxes & Obama CareIncome Taxes & Obama Care