Winners And Losers In The New Health System

President Obama today signs the landmark health care bill, but will health care reform leave your wallet on life support? Financial planner Lewis Barajas talks about which groups will come out winners and losers of the bill.

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ALLISON KEYES, host:

And now we're going to take a look at what the landmark health care legislation could mean for you. While political watchers are still tallying the winners and losers on Capitol Hill, we'll explore how the plan could affect the finances of people across the country. Here to help us out is financial planner Lewis Barajas. Welcome to the program.

Mr. LEWIS BARAJAS (Financial Planner): Thank you, Allison.

KEYES: Talk to us a little bit with some good news. Who in America is winning in this plan?

Mr. BARAJAS: Well, you know, the low and moderate hard-working people of America are going to win substantially. And, also, the people that are - you know, the people that are self-employed or the people that have lost jobs and had preexisting conditions are going to be the big winners. A lot of people aren't going to really recognize a big difference in their policies. I mean, if you work for a midsize to a large company, have already had health insurance, you're not going to see much difference. Outside of, obviously, that you're not going to have any more lifetime caps on your health insurance.

KEYES: So who's the losers?

Mr. BARAJAS: Well, you know, the losers, I don't know if we call them losers, but what's going to happen is that, you know, there's going to be some redistribution of the income here. And again, the people that are earning $250,000 or more, if they're married filing jointly or individuals earning over $200,000, are going to end up paying a lot more in taxes.

Obviously, from a previous person you had on, they were telling you that if you have unearned income or investment income, meaning that income from, you know, money in the bank earning interest or dividends from bonds or capital gains, you're going to be paying 3.8 percent on that more than you have in the past. Again, if you're earning more than $250,000.

Also, if you're earning more than 250,000, your Medicare tax will be increased by, you know, 9/10ths of one percent going forward. And so there's going to be some cost there.

KEYES: So there are some people that aren't going to see, really, any changes in their coverage, right? Who are those?

Mr. BARAJAS: Again, the people that won't see changes and really won't even see anything happen would be the people that work for midsize to large companies who already have decent insurance plans.

KEYES: It sounds like this is not going to be cute for upper middle-class professionals, particularly of color who are well, not particularly of color for upper middle-class professionals in general who are earning six-figure incomes. Have you been in this situation?

Mr. BARAJAS: Well, yeah, you know, and what happens is that and I will just kind of talk to you a little quickly about even people of color, you know, for a lot of people of color, sometimes there are very few siblings that are really earning well and gone on to become doctors and lawyers. And they're still supporting their families. And when I say families, we're not talking about, like, the sandwich generation, we're talking about what I call the club sandwich generation, meaning that they're helping not only their children and their parents, but they're still helping out their brothers and sisters.

And a lot of it has been because their siblings have not had health insurance and they've had to kind of help out as well. In this situation, a lot of the brothers and sisters who've not had health insurance will now have it. And I think it might even lessen the strain on a lot of those people earning a lot of money who've been helping other family members.

KEYES: So, if you are a small business owner and you have a few people working for you, what's this plan do for your bottom line?

Mr. BARAJAS: Well, you know, you're going to be - you're going to have to have mandatory health insurance for your employees, and if you don't you're going to be fined up to as much as $2,000 per employee. But the good thing is that if you are a small business and have less than 25 employees, which is really a large part of the business segment in America, you're going to be given tax credits to help offset those costs - and as much as 35 percent.

And, also, there's going to be an exchange where people can go on there and their employees can select competitive health insurance policies where maybe they didn't have a chance to do that before. I think the biggest problem is going to be with educating the average hard-working person who hasn't had insurance, and really hasn't taken an interest in their health insurance policies and now they're going to have select their own policies.

It's almost like the 401(k), where they've actually left it upon the individuals to select their own investments. Now they're going to have to select their own insurance policies. And there's going to be a lot more education needed out there for the average person.

KEYES: We're running up against the clock, but after listening to the president and Congress talk about this for a year, what's the message that stayed with you throughout all this back and forth rhetoric?

Mr. BARAJAS: Well, you know, the message is that it's - everybody wants the same thing. Everybody wants happiness and everybody wants health. And I think that we have to make sure that we focus on doing the right thing, not just being right. And I think we're heading towards the right direction. And I think in the long term everybody's going to win out, including the health insurance companies and the drug, you know, makers and the individuals. I think this is a very good thing and I'm very hopeful for the future.

KEYES: Lewis Barajas is a financial planner and author of the forthcoming book "My Street Money." He joined us from our studio at NPR West in Culver City, California. Thanks so much.

Mr. BARAJAS: Thank you, Allison.

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