FINANCIAL CORNER
How does the Health-Care Reform affect you?

Earlier this year, the congress passed the most significant reform to health care in the United States since the enactment of Medicare. The following is a brief description of some of the more important provisions of the legislation that might be of interest to the readers:
.
Health insurance required by 2014
U.S. citizens and legal residents will be required to have health insurance by 2014 or face a tax penalty.

Adult children coverage extended
Adult children can be kept on the parent’s coverage up to age 26.

Coverage can not be denied for pre-existing conditions starting 2014
Prior to 2014, adults with pre-existing conditions will be able to purchase insurance from temporary high-risk pools.

Medicaid eligibility expanded
Medicaid availability is expanded to those under age 65 whose income is less than 133% of the Federal Poverty Level beginning in 2014.

Tax credits and subsidies available
For families with incomes up to 400% of the Federal Poverty Level, tax credits and subsidies will be available starting 2014 to purchase health insurance through state-run exchanges.

Rebate for certain Medicare Part D beneficiaries & reduction of co-insurance
A rebate of $250 will be available to Medicare Part D beneficiaries who reach the coverage gap (donut hole) and the co-insurance rate for costs within this gap are gradually reduced.

Increase access to home-based care
A national program will be available in 2011 to provide limited reimbursement for long-term care expenses for those individuals who choose to participate by contributing to the program's cost through payroll deductions.

Tax changes starting 2013

The threshold for itemized deductions for qualified medical expenses will be increased from 7.5% of adjusted gross income (AGI) to 10% of AGI. A temporary exception will be maintained for age 65 and older.

The tax for Medicare Part A (hospitalization coverage) is increased by 0.9% for high-income taxpayers (individuals with earnings exceeding $200,000, and for couples with earnings greater than $250,000). Also, high-income taxpayers will be subject to a surtax of 3.8% on unearned income, such as capital gains, dividends, annuities, and rental income.

By Lily M. Hazelton, CLU, ChFC, CFPR
吳美華 – July 12, 2010

The information contained herein is not intended as a substitute for direct financial or legal advice. Securities America, Inc. does not provide tax advice. Please contact a tax or financial professional for further information.

Lily Hazelton, Registered Representative – CA Insurance License #0B13629
Securities offered through Securities America, Inc., a Registered Broker/Dealer, Member FINRA/SIPC
Advisory services offered through Securities America Advisors, Inc., an SEC Registered Investment Advisory Firm