Your clients may fear a huge tax bite after President Obama signed historic health care legislation into law this week. After all, the legislation calls for taxes and fees on high-net-worth individuals and households to cover 22 percent of its $400 billion cost over the next 10 years, according to a report by Deloitte Tax LLP. It’s much worse under the reconciliation bill currently being debated in the U.S. Senate, which calls for 48 percent of the cost of the legislation to come from high-income individuals, Deloitte notes.

But some advisors say the new levies don’t warrant immediate changes to their clients’ tax and investment strategies. “I wouldn’t encourage anybody to do anything rash right now,” says Timothy Steffen, senior vice president and financial and estate planning manager at Robert W. Baird in Milwaukee. Steffen notes that some of the rules don’t take effect until 2013. “I think that’s a key point. A lot of people are concerned that some of these tax impacts are going to happen right away,” he says. “From a health-care standpoint, I think people have some time to digest it and react to it.”

And there’s plenty to digest. The Patient Protection and Affordable Care Act signed by President Obama on Monday, and a reconciliation bill now being debated by the U.S. Senate, call for a bevy of levies that will be phased in over the coming decade. The key changes affect individuals earning more than $200,000 annually, and households earning more than $250,000. The law approved Monday calls for a 0.9 percent increase in the Medicare hospital insurance tax on the income in excess of the aforementioned thresholds. High net worth households meeting those income thresholds also will face a 3.8 percent Medicare tax on such unearned income as interest, dividends, and capital gains under the reconciliation bill. Both new taxes would be charged on income received starting in 2013.

Coupled with the anticipated expiration next year of reductions in capital gains taxes enacted under President Bush, the affluent would see an effective tax on unearned income of 23.8 percent when the dust settles in 2013. Under those capital gains tax changes, dividends would go back to being taxed as ordinary income; Steffen says that, as a result, some investors might see the tax bill on their dividends go from 15 percent to 39.6 percent, the new top end of the tax brackets. Planning for such consequences seems of greater concern now to Steffen than the future tax impact of the health care legislation.

Still, the new health care legislation has fueled ongoing worries over the tax environment among some of the clients of Roman Batschynsky, a certified financial planner and president and founder of Oakwood Financial Network in Troy, Mich. “It’s part of the overall concern with calls coming in these days, even before this passed,” he says. Clients tell him, “Next, they’re going to come after my retirement savings. We need to sit down because we’re not comfortable with the direction the administration is going,” he says.

What to do? Some investors are considering the conversion of their Individual Retirement Accounts to Roth IRAs, which is subject to sizable tax payments but would allow them to make withdrawals after retirement tax-free. Scott Lucia of Andrews Lucia Wealth Management in San Mateo, Calif. says those conversions may not make sense, however, if the investor has a relatively short time horizon before retirement. Municipal bonds are exempt from federal taxes, he says, but investors shouldn’t assume they will come out ahead with such securities. It’s important to compare the yields on munis to those on their taxable equivalents. The health care legislation does provide another incentive for clients to increase their contributions to 401(k) retirement accounts, which helps reduce adjusted gross income, he says.