Although the complete and total breakdown of the Congressional supercommittee means that we should worry about politicians' ability to get anything done, there is something much bigger that we should turn our attention to.
Their failure to negotiate means that government spending has to be "sequestered" from the budget in 2013.
Well, that's not the real issue. The real worry you should have about 2013 is "the permanent sequestration of the money you can contribute to your flexible spending account due to the stealth tax hikes of Obamacare,” writes John Berlau of The American Spectator.
How does that work? Berlau explains:
...it won't be until the beginning of 2013 that most of the public will know that one of the things in the bill was a tax-free dollars that can be put aside for medical expenses in a flex account to just $2,500 per year. Especially for large families, this is in effect a marginal tax hike on health expenses of as much as 40 percent!
The flex account limits is one of the gimmicky "revenue enhancements" that allows Obamacare supporters to say it reduces the deficit. Other accounting tricks include the now-repealed 1099 mandate, which required firms to report to send a form to the IRS every time they bought a good or service valued at $600 or more.
The "medicine cabinet tax," which went into effect earlier this year and applies to both flex accounts and health savings accounts, puts in the additional headache of getting a prescription for every over-the-counter medicine bought with the account. But any short-term tax savings will almost certainly end up resulting in higher costs in the long run, as more patients needlessly visit the doctor for OTC prescription or just buy more expensive prescription medications.
But the flex attack that will begin in 2013, after the next election, of course, will potentially be Obamacare's most devastating tax hike, or "revenue enhancement." All families, no matter their income or number of children, will be capped at putting $2,500 in their flex accounts. However, it will hit those families with disabled children the hardest.
"Families with special-needs children and people with chronic illnesses stand to lose hundreds, if not thousands, of dollars in tax benefits," reports FoxNews.com. The article notes that "policy groups estimate that people with chronic illnesses face more than $4,000 annually in out-of-pocket expenses. Flex account money can go toward that."
The only sliver of good news to take away from this is the fact that there are ways to help minimize the financial hit, but you have to get on top of those methods within the next few weeks in order for them to work. Here are some of Berlau's suggestions:
Consider putting in higher than normal amounts in the flex accounts for 2012, even doubling or tripling the amount. Then, to the extent you can, get certain procedures done this year and pay upfront for multiyear treatments such as your children's braces before the cap hits in 2013.
If you're thinking about laser eye surgery, which often isn't covered by insurance, you have a strong case for getting it done in 2012. If you know your kids are getting braces that they will wear for two or three years, pay more of the cost upfront in 2012, before the $2,500 cap hits in 2013.