Is Obamacare Affordable Care For Anyone?

Obamacare May Wipe Out The Income Of Low-Paid Workers

the cost of obamacareOn the surface, Obamacare sounds like a fantastic idea.  Equal access to health care, health insurance availability for everyone, employers and employees split the premiums, and the list goes on.  However, when you truly examine the cost benefits of Obamacare, I think most people will come to the realization that there is no such thing as a “cookie cutter” insurance plan that meets the needs of all Americans.  Unfortunately, low wage workers, those who need health insurance the most, will have to make a decision between health insurance and putting food on their tables.  In these situations, basic needs are going to outweigh the desire for something like health insurance.

The Cost-Benefit Of Obamacare For Workers

For workers who would now have access to health insurance, Obamacare may indeed be a blessing.  However, for those making lower wages, and approximately 50% of Americans fall into this category; because 50% of Americans are at or below the poverty level, it may cost them too much of their income for them to enroll in the plan.  In recent interviews conducted by the Wall Street Journal, a man by the name of Mr. Martinez was interviewed.  Martinez makes $10.50/hour, working for a landscaping service in California.  He stated that the amount he makes must go towards feeding his family, and that in spite of the access to the health care plan it is cheaper to pay the penalty and opt out than it is to try and afford the premiums.  Millions of Americans like Martinez, are in the same position.  Spending an additional $130/month on health insurance just isn’t in the cards.

The Cost And Impact Of Obamacare On Employers

On the other side of the coin, employers who are now going to be required to provide health insurance for their employees are going to be facing significant expenses as well.  Martinez’ employer in California would be looking at over $1,000,000/year in employee health premiums assuming his business selects a plan where the employees are only required to contribute 9.5% of the premium.  This expense will actually completely wipe out the profit margin for his business.

Will Small Businesses Be Able To Survive Obamacare?

Due to the lofty premiums required to be paid by employers, it may be hugely detrimental to small businesses.   Currently the law states that employers must pay insurance for full-time employees if they work more than 30 hours a week.  As a result, many businesses could be looking to wipe out their full time positions in exchange for part-time employees who wouldn’t be benefit eligible.

As investors, the implementation could be impactful our your assets for multiple reason including:

  1.  Decreased profitability if you’re an employer
  2. Added expenses for health care or a fee incurred to be uninsured
  3. Money being taken from Medicare which would increase your retirement medical expenses thereby increasing the capital you will need to allow you to retire.
  4. Potentially higher unemployment and underemployment if companies are forced to lay-off benefit eligible employees in exchange for part-time non-eligible employees.

For more information on how Obamacare  may impact your need for retirement savings and your overall monetary health, speak to a Redhawk Wealth Advisor near you today.

*interview information taken from the Wall Street Journal

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