Second Opinion: What Does Obamacare Mean For My Paycheck?
Monday, November 25, 2013
We've tackled what you need to know about the Affordable Care Act this year. Now for the long view — will it ever reduce payroll taxes?
Second Opinion is a weekly Q-and-A series that answers questions from San Diegans on the Affordable Care Act. Ask yours here.
The Question: Will the Affordable Care Act reduce taxes taken out of my paycheck for Medicare and disability?
Up until now, Second Opinion questions have focused on the immediate future. What do I need to do before Jan. 1? This week's participant asks for the long view.
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Jeff Schoellerman works at Janssen Pharmaceutical Research in San Diego. (Leave it to a neuroscientist to ask a complicated question.) He's curious whether the Affordable Care Act will eventually have an effect on what we pay toward Medicare and disability out of our paychecks.
Here's his question.
The first thing I thought about when I was looking at the whole idea of this Affordable Care Act was it's going to be a major government program to make sure everyone has health care, so why would we need more than one major program? My question is, if successful, if it's going to eventually make it to where we won't have to pay so much for other government programs like Medicare.
The Takeaway: We'll keep paying for Medicare and disability, but maybe less than we expected.
I took this one to UC San Diego economist Jeffrey Clemens. He said the Affordable Care Act as it's written now won't replace the need for Medicare and disability. In fact, he said, we need those programs in order for the law to bring down costs and get more people insured under the new health exchanges.
"If one was trying to shift disabled individuals and elderly individuals into the exchange, the effect of that might actually be to make premiums more out of reach of the young and healthy individuals who are sort of more on the fence about participating," Clemens said.
While Obamacare won't replace Medicare, Clemens said it could reduce the need for tax increases in the future. The law has provisions meant to make health care more efficient and, thus, cheaper.
"The hope of these cost control efforts is that they will ultimately make financing our health care needs less expensive and, to the extent that those efforts are successful, that might make it less necessary to increase payroll taxes, which the government currently projects we'll need to do in order to finance the Medicare program," Clemens said.
The Orders: Wait and see.
Like so many of these big-picture questions, the answer is really wait and see.
"It's really too early to know how successful those efforts will be, because bending the cost curve is very much a kind of long-run goal of the law," Clemens said. "It's only been a couple of years since really any aspects of the law have been in effect."
Check out last week's Second Opinion: Which mental health services have to be covered under Obamacare?
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