1855 Trawood Ste 204 ● El Paso, Texas 79935

915-595-2751 mbj@whc.net

Newsletter February 2014

In Touch Financial

William Lenderman, III Financial Mentor

Phone: 915-595-2751

Email:WL3@whc.net /Website: keepingintouchfinancial.net

Blog: keepingintouchfinancial.com

“Experiencing Success One Good Idea at a Time”


 The stated goals of Obamacare are two:

1)     Increase insurance coverage for all Americans

2)     Make insurance more affordable

The real purpose of this complex array of laws is to throw both the health industry and the health insurance industry into turmoil so vast that the public will cry for relief. The government will be happy to step in and pay all medical bills that meet the criteria they set. This would the last step into socialized medicine.  Recognize this is not the program of one man. It is the work of the entire Congress as well as the Supreme Court.

There is some potentially good news. Rather than extend the deadline for individual policies for only one year, it appears that the government may extend the ability to maintain private health insurance for a full three years. This doesn’t change the fact that the results are inevitable, though delayed unless people stand up and actively resist before the public becomes so terribly entwined in the new procedures that the normal citizen will not even consider freedom as an alternative.

It is obvious that the health insurance for every single American will skyrocket in price. These price increases are already being felt in small groups and personal policies.

A risk most people don’t recognize involves the tax credits which are supposed to reduce the cost for lower income individuals. Beware! To sign up for the program, you will be required to bare your soul on a number of personal financial issues that no one else would dare require of you when applying for health insurance. This sets a person up for the possibility of having personal information stolen. This is a frequent occurrence with government programs. In addition, the government then has detailed information concerning your finances.

To apply for an Obamacare tax credit the government wants to know:

  • Pension and retirement account information
  • Social Security payments
  • Alimony payments
  • Investment information
  • Family structure and living arrangements
  • Foster care information

And, if you are self-employed:

  • Vehicle expenses
  • Property or business insurance
  • Interest collected
  • Rent or lease of business property
  • Contract labor
  • Business activity such as commissions, licenses, and fees
  • Business travel and meals
  • Legal and professional services

Those who have a low enough income to receive a subsidy place themselves at great risk. The subsidy is a tax credit. You will be required to estimate your income for the year. The subsidy is based on this information. If you should have an income which is likely to change at times, including sales jobs, food service jobs, and hospitality jobs, the minute you go over the income that qualifies you for the tax credit you are subject to pay back the subsidy you were given for the year. Any month which exceeds the allowed maximum would require such a payback.

If an individual’s income should go even $10.00 over the allowed amount for a subsidy, that individual is required to immediately report this information to the Obamacare exchange and also to the IRS in order to adjust the subsidy. If an individual fails to do this, he will be immediately required to pay back the subsidy plus interest plus penalties as well. All these paybacks are in addition to what the individual has paid for the cost of the health insurance he may not have wanted in the first place.

The subsidies in a very low-income tax bracket could be anywhere from $600.00 to $1,500.00 at the end of a given year.

For individuals who have incomes exceeding $45,960.00 per year or for families of four exceeding $94,200.00 per year, the paybacks, interest, and penalties will be immediately due.  The tax bill and penalties due if the family should reach $60,000.00 would be $8,061.00 for a couple. Again, this is in addition to the full price of the health insurance. It is conceivable that a large number of individuals and families will be caught in this particular tax and penalty trap.

There is an additional danger; President Obama has called for an additional $440,000,000.00 to finance 2,000 additional IRS agents. Most of these agents will no doubt be auditors. Be aware that, in the past, individuals who have participated in government programs which allow for tax credits have frequently been subjected to IRS audits. When individuals who applied for a tax credit for adoptions, 69% of them were audited. This is not only a great inconvenience but a great potential cost and a substantial risk for additional fines and penalties—- even possible jail time.

The irony involving the stated goals of involving more people in health insurance at a lower cost is proving to accomplish precisely the opposite. Already, six million Americans who have been previously covered have now lost their coverage. Again, these benefits may be restored to these individuals if the deadline is postponed for three years. Nonetheless, these individuals will eventually lose their coverage. In addition, millions of people will be reduced to full time work redefined as less than 30 hours per week. This will significantly reduce their incomes. Companies will be forced to accomplish this reduction in order to save the enormous cost of the health insurance programs which will be forced upon them in the near future. These additional millions will lose their group health insurance as a result. They will be forced to buy their own coverage at exorbitant prices. I have already talked to clients who have had increases for single individuals by as little as $50.00 per month and for single individuals in group policies with increases of nearly 300%.

As unpleasant as this information may be, I am providing it to you as a way to keep you from getting blindsided by the plans of the government to destroy the health care insurance systems and to impoverish every working American. I don’t enjoy having to provide information like this any more than you probably enjoy reading it. It is my hope, that once we understand the changes which are coming, we can take positive measures to protect ourselves by making full use of all the resources we still have under our own control.


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