ObamaCare: What Does It Mean for Me?


Reader Question: The Supreme Court upheld the validity of the Obama healthcare plan. What does this mean for the average consumer? J.C.
Answer: ObamaCare, as it has been dubbed, provides universal healthcare for all Americans and mandates that everyone participate. Lower income American’s will either be added to the state Medicaid insurance plans at no cost or receive tax credits to help pay for premiums. High income earners, defined as couples making more than $250,000 per year (single filer’s making more than $200,000 per year) will pay a ‘Medicare Contribution Tax’ on unearned income of 3.8% in addition to the higher tax rates associated with the expiration of the President Bush tax cuts. Some of the most popular benefits of ObamaCare include the elimination of lifetime limits on coverage; elimination on pre-existing conditions; coverage for preventive medicine; and allowing children to remain on their parent’s plan up to age 26. Some of the least popular aspects of ObamaCare include the requirement of employers with 50 or more employees being required to provide health coverage for all employees and the mandate that everyone must buy coverage or pay a tax/penalty. Congressional Republicans have vowed to repeal ObamaCare and a number of Republican governors have vowed to not accept the 100% federal funding for residents who would qualify for the expanded Medicaid coverage. There is fierce debate as to whether ObamaCare will add to or reduce the federal deficit. Over the next few months, I suspect that sentiment towards ObamaCare will become more and more favorable and the governors who say they will not accept the federal Medicaid payments will relent. With a law this massive there are many concerns, but my biggest concern is that the federal government’s track record for successfully running major programs such as Social Security is not good. If Republicans do seek to repeal ObamaCare, they’ll need to offer a healthcare reform strategy that includes the many popular benefits of ObamaCare. 
Reader QuestionI read your advice about leaving money to a financially irresponsible person. I have a similar question but the person happens to be my son. Can I leave him what I want him to have by adding a stipulation in my will stating what the money has to be used for and supervised by a trustee to make sure it’s used for that purpose? Also what is the best way to leave money for grandchildren to ensure the parents can’t touch their money and at the same time make sure they don’t waste it all? S.T.
Answer: In working with a lot of families over the years, it’s often the case that parents feel that one or more of their children would be ill-served to receive any significant inheritance with no strings attached. Perhaps the best solution is to establish a trust for your child through your will. An attorney experienced in estate tax law can craft a trust that provides appropriate financial support while protecting the money from misuse. In fact, if you can dream up what you’d like the trust to do (or not do), your attorney can make sure your wishes are carried out. You’ll need to decide on a trustee, who could be a trusted friend, family member or professional such as a CPA or attorney; or your trustee could be an institution such as a trust company or bank. This trust, set up under your will, can also be used to serve your grandchildren. In my experience, trusts are excellent tools for insuring your life savings is preserved as a financial safety-net for heirs and we use them extensively in working with our clients.