Although no one can predict all of the consequences of the massive government overhaul of your healthcare, it is certain that many people will find that their health insurance, healthcare costs and taxes go up as a result. Since many of the provisions will take effect over the next few years, individuals should find a financial planner or advisor that can help them plan for the changes.
Among the changes which financial advisers are helping clients deal with are:
- Applying a 3.8% Medicare tax to new income never before targeted by this government program. The new tax will apply to rental income, royalties, dividends and capital gains, punishing those who save or own investment properties.
- A new 0.9% Medicare on the self-employed and everyone above certain income levels. With Medicare, the government's current medical program going broke, politicians are adding these new taxes to cover up part of the problem.
- Business owners with more than 50 employees will be fined if they don't offer their workers a government approved health insurance program. This increases costs for businesses across the country and will prevent many firms from expanding or raising salaries, while increasing their use of outsourced jobs to other countries.
- Higher medical costs. Although the dream is to lower healthcare costs, the legislation will likely result in higher costs in many ways. One, many people's cost for health insurance will go up instead of down because the insurance companies are being regulated to cover a lot more expenses. Anyone healthy will have to pay more to cover everyone else. Second, the additional layers of government bureuacracy and regulation will add to costs. Social Security, Medicare and Medicaid have shown that government expenses end up surpassing expectations and end up adding to the government's current deficits.
So what should investors do?
Talk to your financial advisor about preparing for these changes. Certainly, tax-advantaged investments such as municipal bonds may be more attractive. In addition, putting more money into tax-advantaged accounts such as 401Ks and IRAs may be a good choice for some people. Business owners may need help in choosing employee benefit plans, or help with structuring their business so they avoid the new government fines. Although individuals can't change the higher costs coming their way, they can find a financial advisor or financial planner to help them prepare.
ClaroConnect.com ( http://www.claroconnect.com ) is a free, unbiased search tool which allows individuals to screen advisors by multiple criteria, read detailed profiles on each advisor, and contact the ones they would like to speak to or meet with. ClaroConnect is helping thousands of individuals a month choose a financial planner who meets their needs.
