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Obamacare Fines, Fees and Expenses Explained

BEGIN TRANSCRIPT

RUSH: To Austin, Texas, and Natalie. Natalie, welcome to the EIB Network. Great to have you here. Hi.

CALLER: Hi, Rush. Thank you for calling. I'm a second-generation listener. My question was something you had touched on yesterday that board me all night and I couldn't really sleep. You said that it was gonna cost a family of four roughly $20,000 a year for Obamacare. My husband and I have four children, so that would cost us about $24,000 a year if I did the math right. If my husband only makes $25,000 a year, what are we supposed to do? Does that mean my children can't afford health insurance because we can't afford it?

RUSH: No, you pay the fine.

CALLER: So, we --

RUSH: That's not next year. These are IRS numbers, and it sounded incredible to me, too. It works out to about $4,000 per family member. It's $16,000 to $20,000 a year for a family of five, and I think after a certain number of years (I think it's by 2020, after this thing fully implements), it gets going for a while, and the fine mechanism has evened out with the coverage. But the IRS said that is the average cost of the lowest plan, Natalie. That's the bronze plan. What you are supposed to do at that point is to say, "To hell with getting your own insurance and get on the government plan." That's the purpose of that is to drive you out of the private sector health insurance market, including any insurance provided by you or your husband's employer.

CALLER: Well, we were on TRiCare until my husband was medically discharged and then when that happened in March, we lost all our insurance. So I don't have insurance, my husband gets his care through the VA, and my kids unfortunately right now have to be on Medicaid to get their checkups and stuff.

RUSH: Well, you're covered, then. The 20 grand is for people that currently get their insurance via their employer. That's what it's gonna end up costing the employer or you, and the whole purpose of that high expense is to drive you out of that market and force you into a state exchange or a government-run program of some kind. It's designed to propel the government as the place you have to end up going to get insurance.

CALLER: So if you don't want that, then you can just pay the fine?

RUSH: Well, but see, if you make less than 200% of the poverty rate, you get a "subsidy," meaning your neighbors will help you pay for it. So at your income level, you are gonna be subsidized out the wazoo because your income level is beyond or beneath 200% of the poverty rate. So it won't cost you that much money. It'll cost the rest of us.

BREAK TRANSCRIPT

RUSH: Ladies and gentlemen, a slight correction, and I must admit the correction I need to make here is just a mistake and somewhat understandable. When the IRS put these numbers out that the cheapest health care coverage for a family of four would be $20,000 a year, my reaction to that was, "That can't be possible, because nobody can afford that. That simply cannot be possible," and that's the cheapest. There's bronze, silver, gold, and then platinum premium. But $20,000 is the cheapest. The mistake I made is in telling our previous caller that that's the cost that Obamacare will require private sector insurance companies to charge.

My mistake is, it's not the private sector price. That's the Obamacare price. That is the cost of insurance. The bronze plan is 20 grand for a family of five. For a family of four, that would be $16,000. It's basically $4,000 a person, so a family five is 20 grand. That's the Obamacare price. After Obamacare is fully implemented, that's what it's going to cost. Now, obviously people can't pay that, so there are exemptions. In the first couple/three years, there's a fine option. You can pay a penalty, and that starts at $2400. You don't have insurance, but you're also legal. One way or the other, Obamacare is going to cost you.

You're either going to buy insurance and pay what it costs or you're gonna pay the fine. Now, the first couple/three years of Obamacare, after full implementation, the fine relative to the cost of the insurance is cheap. That $2400 instead of $16,000 is cheap. But you still have to come up with the $2400. There's gonna be a line item on your tax return for it. That's why there are 16,500 new IRS agents as part of Obamacare. They are there to make sure that you either have insurance and can prove it, or that you've paid the fine. If you can't pay the fine and you're working, they will deduct it. It'll be an additional deduction from your paycheck.

Just like FICA and your income tax deduction, it will be a new deduction. It's not as though you'll have to write a check for $2400. They'll just take it from what you earn over the course of 12 months if that's what you choose. You'll have the choice to pay the fine or buy the policy. Now, after a short number of years the fine gets larger than the policy. The purpose of the fine is to obliterate private sector insurance. If people don't buy insurance 'cause it's so expensive and instead pay the fine, then the private sector health insurance companies are losing customers, obviously. And the more customers they lose, the greater the odds they're gonna go out of business.

But after a while, that $20,000 is the Obamacare price, it is not the private sector price, and that's the correction I need to make. Now, if your annual income is less than 200% of the poverty rate... Figure 80 grand. If your annual income is less than $80,000, then you will get a subsidy. I don't know how much, but it's calculated. You will get a subsidy on the $20,000 that you owe, and you'll have to pay the balance. There no way around this, folks. I don't think there's any stopping Obamacare now. It's done. The states are doing what they can when it comes to the exchanges and things like that.

But I have a story here. This is from The Politico. "The federal health care law..." Brace yourself. "The federal health care law could nearly triple premiums for some young and healthy men, according to a forthcoming survey of insurers that singles out a group that might become a major public opinion battleground in the Obamacare wars. The survey, fielded by the conservative American Action Forum and made available to Politico, found that if the law's insurance rules were in force, the premium for a relatively bare-bones policy for a 27-year-old male nonsmoker on the individual market would be nearly 190% higher" than what it is today.

Let me read that again. If Obamacare's "rules were in force" today -- the coming rules that will be in force, if they were in force right now -- the insurance "premium for a relatively bare-bones policy for a 27-year-old male nonsmoker on the individual market would be nearly 190% higher." Now, the headline here is: "[Obamacare] Premium Sticker Shock Could Fuel Foes" They're saying that this study is gonna fuel opposition to Obamacare. And the final paragraphs of the story tell us why the Politico wrote this thing in the first place. What this is, what The Politico story is, is really an effort to head off any criticism about the premiums for young people tripling.

What we're told here is: We need to looked at the big picture. Older people won't have to pay as much, never mind that in the article they note that on average premium for individual policies for young, healthy people and the small businesses that employ them would jump 169%. But costs would fall for older people. The point of this story is that you shouldn't complain, and they're worried that this could cause "opposition." But you shouldn't oppose it. It's an effort to head off any criticism. I don't care where you look, folks...

If you're young with a bare-bones policy, or if you're a family, the health insurance costs are going to skyrocket like you can't imagine. Without question, next to your house or maybe your car, it'll be the most expensive thing in your life. In this case, it's a fine if you don't have insurance. So whether you have insurance or not, the federal government is gonna be collecting thousands of additional dollars that you, at present, are not paying. Everybody was told this about Obamacare before it was signed into law. Everybody was told all these things before the election last year. I don't know how many listened. Obviously people didn't listen, didn't believe it or what have you.

But there's no avoiding this.

There's no avoiding paying thousands of dollars that you are not at present paying, once this thing is fully implemented in a couple of years. 

BREAK TRANSCRIPT

RUSH: It's amazing how expensive health care is once it's free. I'm telling you, people have no idea what's headed their way. Even people who are moderately informed about this really don't have any idea what is headed their way. Here's Donna in Southern California. Great to have you on the EIB Network. Hello.

CALLER: Hi there, Rush.

RUSH: Hi.

CALLER: You know, Rush, I've been in meetings for probably the last month with business owners out here in Southern California. Most of them are nonunion companies, all Republicans who are business owners, and everybody is looking at each other with doe-in-the-headlight eyes because we really believed that Barack Obama was not going to get reelected so this Obamacare was gonna be repealed and we would not have to deal with it in our businesses. So now, by 2014, it has to be implemented in your business. If you have employees that have worked under 40 hours a week, you've never had to give them insurance. Now, of course, you do, and it's not gonna happen. So that implosion that you talked about earlier is coming.

RUSH: Wait, wait, wait, wait. What do you mean, "It's not gonna happen"?

CALLER: Well, how could it happen when businesses can't afford it? We can't afford to insure these people.

RUSH: You are supposed to forgo your profit.

CALLER: Well, right and then whatever we do is gonna go to the consumer who no longer will be able to afford the product.

RUSH: If you forgo your profit, maybe he can.

CALLER: Well, right, but we're not gonna forgo any profit. We are already have. We're existing now without it. Any long-term business has been in business just for the employee's sake, not because there's any great profit.

RUSH: Well, that's the reason you're there in the first place. You exist to provide health care and jobs for the community. That's it. You're not supposed to make a profit, and that's what you're gonna learn. That's what Obama's here to teach everybody, and you're gonna learn that.

CALLER: Well, you said it. You just said earlier: People have no idea how bad this is going to really get, and it really is. I mean, it's gonna be companies closing across this nation. That's why the economy is shrinking, is because companies are actually closing. (chuckling) So it's bad.

RUSH: They're closing in advance of Obamacare implementation. That's true.

CALLER: Absolutely.

RUSH: But, see, you need to be more like Amazon. You need to sit there and lose money, your stock price goes up, and everybody loves you.

CALLER: Right. Well, that's not how it works. That's not the reality. That's not the real world. Meanwhile, we have the GOP fighting one another -- you know, Karl Rove and then the conservatives -- instead of all of us coming together.

RUSH: I know. I don't understand. Look, for all of this desire Republicans have to wipe out conservatives, where is the same desire to wipe out the Democrats? How do these people get elected? They run against Democrats in their elections. How the hell do they get elected if they don't fight and oppose 'em? Look, you're exactly right. You've hit the nail on the head on practically everything. I appreciate it. In fact, Donna, I want you to hang on. Bring her back up. Would you like a new iPad?

CALLER: Yes, I would. (chuckling)

RUSH: All right. All right, I'm gonna have some in not too long. I'll have one of these great 128-gigabyte storage ones. You may not know what that means, but it's the best one. It's all you need to know. Hang on so Mr. Snerdley can get your address. We'll give you this for when you close your business and you'll have something to do. It's fun, you'll love the thing, and you'll find a way to be productive on it, too.

CALLER: Thank you, Rush! God bless.

RUSH: Thank you, Donna, very much.

END TRANSCRIPT

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