Are you concerned that ACA Medicaid might get an asset test?

[swampwiz]

It seems that the idea of millionaires on Medicaid is the next outrage to be mined by the angry, tax-paying working class.

http://dailysignal.com/2016/02/09/millionaires-are-qualifying-for-medicaid-under-obamacare/

[Million2000]

While I think there are many examples of wealthy people mooching off our government that are quite a bit bigger than this, it does seem ridiculous that people with enough money to retire early benefit from taxpayer funded healthcare. If you can afford to buy your own insurance, you shouldn't get Medicaid, seems logical and I hope asset tests are put in place. 

[swampwiz]

While I think there are many examples of wealthy people mooching off our government that are quite a bit bigger than this, it does seem ridiculous that people with enough money to retire early benefit from taxpayer funded healthcare. If you can afford to buy your own insurance, you shouldn't get Medicaid, seems logical and I hope asset tests are put in place.

Would you be in favor of allowing the ACA premium tax credit (PTC) be available for folks at any income level?  Do you realize that the reason Medicaid was added to the ACA was because the PTC would be so high for low-income folks?  Do you think the PTC should have an asset test?  if you think that, then you de facto believe that assets should be taxed.

[Million2000]

Many assets are already taxed in this country, they're called property taxes. I do think to get the ACA tax credit there should be an asset test. If you can afford to buy insurance at full cost, why should you get money designed to go those of low financial means? Not getting government assistance money is not the same as a tax.

[jlcnuke]

While I think there are many examples of wealthy people mooching off our government that are quite a bit bigger than this, it does seem ridiculous that people with enough money to retire early benefit from taxpayer funded healthcare. If you can afford to buy your own insurance, you shouldn't get Medicaid, seems logical and I hope asset tests are put in place.

Would you be in favor of allowing the ACA premium tax credit (PTC) be available for folks at any income level?  Do you realize that the reason Medicaid was added to the ACA was because the PTC would be so high for low-income folks?  Do you think the PTC should have an asset test?  if you think that, then you de facto believe that assets should be taxed.

I think that the PTC should have an asset test and that has nothing to do with "taxing assets". The purpose of the PTC is to assist the poor, who otherwise couldn't afford insurance, so they can afford to have health insurance. Taxpayers assisting millionaires with their bills was NOT the purpose of the PTC. "Not getting a tax credit" is NOT the same as "getting taxed". I'm not "getting taxed" by not getting the Earned Income Tax Credit, or the Lifetime Learning Credit, etc. I'm simply not getting taxpayer funded assistance (credits) for those things because I'm not eligible. So feel free to drop that false premise. Next you'll tell me that since Home Depot offers veterans a discount, they're taxing non-veterans assets by not giving them a discount... (as you can see, false equivalencies suck and should be avoided).

Currently, millionaires can be eligible for taxpayers helping to pay their bills because Congress hasn't bothered closing that loophole, but it doesn't mean that if they do close it that it's a "tax on millionaires".

Many assets are already taxed in this country, they're called property taxes. I do think to get the ACA tax credit there should be an asset test. If you can afford to buy insurance at full cost, why should you get money designed to go those of low financial means? Not getting government assistance money is not the same as a tax.

+1

[jim555]

Who wants to be on Medicaid??  In most states it is garbage coverage.  Most REs go out of their way to avoid being in it.

[rantk81]

Consider two people, John Spendypance, and John Saver.  They both earn a fabulous $200K a year salary, at an identical job, with identical W-2's and 1040s and tax burdens each year.  They both work for 10 years.  They are identical in every way, except their spending/consumption habits.  They both paid an identical amount of federal, state, and fica taxes.

John Spendypance spends every penny he takes home on vacations, bar tabs, restaurants, fancy cars, etc.

John Saver packs his lunch, takes the bus to work, rarely goes out.  He saves every penny he can.

After 10 years of work, the economy takes a downturn, and both John Spendypance and John Saver get laid off from their jobs.  One of them has a bank account (or investments) of hundreds of thousands of dollars. The other one has a bank balance of $0.00.

In this scenario, I don't agree with the premise that one of these folks deserves more financial assistance than the other.  They (both) made their own beds, so to speak.  If you believe otherwise, then wouldn't it be true to say that John Saver has been subsidizing the lifestyle of John Spendypance all along?

[jlcnuke]

Consider two people, John Spendypance, and John Saver.  They both earn a fabulous $200K a year salary, at an identical job, with identical W-2's and 1040s and tax burdens each year.  They both work for 10 years.  They are identical in every way, except their spending/consumption habits.  They both paid an identical amount of federal, state, and fica taxes.

John Spendypance spends every penny he takes home on vacations, bar tabs, restaurants, fancy cars, etc.

John Saver packs his lunch, takes the bus to work, rarely goes out.  He saves every penny he can.

After 10 years of work, the economy takes a downturn, and both John Spendypance and John Saver get laid off from their jobs.  One of them has a bank account (or investments) of hundreds of thousands of dollars. The other one has a bank balance of $0.00.

In this scenario, I don't agree with the premise that one of these folks deserves more financial assistance than the other.  They (both) made their own beds, so to speak.  If you believe otherwise, then wouldn't it be true to say that John Saver has been subsidizing the lifestyle of John Spendypance all along?

Simple question, do you think multi-millionaires should get food stamps? Why or why not?

[MonkeyJenga]

I don't remember the source, but I read that when Medicaid used to means test everyone, it was more expensive and complicated to administer. They didn't have enough staff to verify in a timely manner, so everyone would get approved, then people would retroactively go through the backlog and start kicking people off. Anyone see the same info and know how to verify it?

Also FYI for anyone going to the daily signal link, that's owned by the heritage foundation, one of the biggest conservative policy groups in the US. The kind that wants Medicaid/ACA to not exist at all and will chip away at them by any means necessary.

[rantk81]

Simple question, do you think multi-millionaires should get food stamps? Why or why not?

I believe that if there are government programs in place, paid for by all our taxes, that are meant as a safety net against loss of income, then these programs should be available to everyone, regardless of their past spending patterns.

[jlcnuke]

Simple question, do you think multi-millionaires should get food stamps? Why or why not?

I believe that if there are government programs in place, paid for by all our taxes, that are meant as a safety net against loss of income, then these programs should be available to everyone, regardless of their past spending patterns.

Okay. I don't disagree with that for a program with that intention, however I believe that the only government program in place that is 'meant as a safety net against loss of income' is unemployment insurance. The other programs (including ACA subsidies etc), in my opinion, are meant to assist those who "need assistance". That those aren't all set up to make that explicitly exclude those without actual need probably has as much to do with lawmakers being lazy (it's more complicated to try and envision all the ways it could be used by those without an actual need) as it has to do with the excessive costs mentioned by MonkeyJenga.

[Million2000]

Simple question, do you think multi-millionaires should get food stamps? Why or why not?

I believe that if there are government programs in place, paid for by all our taxes, that are meant as a safety net against loss of income, then these programs should be available to everyone, regardless of their past spending patterns.

Only in America can we have multi-millionaires on food stamps and medicaid, that's pretty perverse.

I don't remember the source, but I read that when Medicaid used to means test everyone, it was more expensive and complicated to administer. They didn't have enough staff to verify in a timely manner, so everyone would get approved, then people would retroactively go through the backlog and start kicking people off. Anyone see the same info and know how to verify it?

Also FYI for anyone going to the daily signal link, that's owned by the heritage foundation, one of the biggest conservative policy groups in the US. The kind that wants Medicaid/ACA to not exist at all and will chip away at them by any means necessary.

This sounds about right, I have no doubt putting in place controls will increase the cost of the program. Yet another reason for single payer.

[Rosy]

There is only one issue here - "unintended eligibility for Medicaid" - medical care for the wealthy including millionaires. 
People seem to have no moral dilemma in taking advantage - because drumroll, it is legal. Forget legal - it is an outrage, period!

What we need in this country is decent Universal Healthcare for all. Not discussions about loopholes and god forbid taxes on assets - we all want to protect our assets!

This is a loophole only open to those who live in expanded Medicaid states - in my state, Florida - the governor refused the Medicaid expansion.
As stated in the article:
 

“It’s distorting the program away from those whom it was designed to help who are most vulnerable and don’t have other options,”

The fact that there are people who save and invest their monies versus people who throw their money out the window has absolutely no bearing on this topic.
It's like saying, "Oh, look shiny!:)

The topic at hand is a loophole that exists in favor of the wealthy - a loophole that should have been shut down immediately when it was discovered!

[MonkeyJenga]

That those aren't all set up to make that explicitly exclude those without actual need probably has as much to do with lawmakers being lazy (it's more complicated to try and envision all the ways it could be used by those without an actual need) as it has to do with the excessive costs mentioned by MonkeyJenga.

Lawmakers, especially Republicans, are never lazy when it comes to limiting the scope of social assistance programs. Ever imaginative when dreaming up all the nefarious ways they could be misused. They also don't have to do it alone, they have far-right think tanks like The Heritage Foundation helping them out. That's why we have/had means testing, work requirements, and other eligibility criteria for many programs.

Simple question, do you think multi-millionaires should get food stamps? Why or why not?

I believe that if there are government programs in place, paid for by all our taxes, that are meant as a safety net against loss of income, then these programs should be available to everyone, regardless of their past spending patterns.

Only in America can we have multi-millionaires on food stamps and medicaid, that's pretty perverse.

Only in America do we not have a decent public option for healthcare for everyone, regardless of income and assets.

Other countries with similar GDP/wealth tend to have a much stronger safety net with fewer restrictions on who uses it.

The topic at hand is a loophole that exists in favor of the wealthy - a loophole that should have been shut down immediately when it was discovered!

But this isn't a new and surprising loophole. Medicaid previously had means testing. Expanded Medicaid doesn't. I'm certain lawmakers discussed means testing while writing the law.

[Laura Ingalls]

I think the Iowa farmland example can be a lot more complicated than the average person might think.  If your cost basis is very low selling the land may not net very much.  The capital gains could be enormous.  Iowa taxes capital gains at the same rate as income so you would loss 10%. To the state.  It costs 10% to sell ag land at auction.  Selling likely is a way to turn $1 million into 500k.  Or maybe it is in a trust and they aren’t legally permitted to sell. 

Long story short is I think it might actually be appropriate sometimes. 

[Rosy]

I think the Iowa farmland example can be a lot more complicated than the average person might think.  If your cost basis is very low selling the land may not net very much.  The capital gains could be enormous.  Iowa taxes capital gains at the same rate as income so you would loss 10%. To the state.  It costs 10% to sell ag land at auction.  Selling likely is a way to turn $1 million into 500k.  Or maybe it is in a trust and they aren’t legally permitted to sell. 

Long story short is I think it might actually be appropriate sometimes.

Yes, I noticed that the Iowa example showed land as wealth. It goes to show what a thorny subject means testing can be. I can't imagine forcing someone to sell their house or land, that does not make sense.
So let me ask you this, do you want someone poor to have to choose between paying the rent or paying for medical coverage? They then become homeless and a burden on society.
Also not a desirable outcome.

I think the key here is that the poor have no other options whereas someone wealthy can find a way to cover their health insurance.
I don't pretend to know the answer and I am aware that no system is ever perfect, but being a difficult problem to solve is not a reason to tolerate this loophole.

Only in America do we not have a decent public option for healthcare for everyone, regardless of income and assets.

Other countries with similar GDP/wealth tend to have a much stronger safety net with fewer restrictions on who uses it.

Quote from: Rosy on Today at 08:07:38 AM
The topic at hand is a loophole that exists in favor of the wealthy - a loophole that should have been shut down immediately when it was discovered!

But this isn't a new and surprising loophole. Medicaid previously had means testing. Expanded Medicaid doesn't. I'm certain lawmakers discussed means testing while writing the law.

You may be right that lawmakers discussed means testing while writing the law, but it makes me wonder now, why they would not use it for expanded Medicaid? Wouldn't it make sense to simply adopt the same means testing in place for standard Medicaid?

@MonkeyJenga -  When you say this isn't a new or surprising loophole that indicates to me, it was left available by the rich for the rich? Wow, that is even worse than I thought - maybe for the first time in my life, I am beginning to seriously object to the underhanded greedy tactics of the rich in the US.
It's like Versailles before the revolution:) - let them eat cake.

 
 

[swampwiz]

Who wants to be on Medicaid??  In most states it is garbage coverage.  Most REs go out of their way to avoid being in it.

I'm on Medicaid, and except for having a reduced network (which is not a problem because I simply go to my state university clinic), it's fine.

I suppose that if you were in the situation to be eligible for Medicaid, you would go and pay for an ACA plan without any premium tax credit (i.e., you wouldn't get the premium tax credit if you were eligible for Medicaid)?

[swampwiz]

Simple question, do you think multi-millionaires should get food stamps? Why or why not?

I believe that if there are government programs in place, paid for by all our taxes, that are meant as a safety net against loss of income, then these programs should be available to everyone, regardless of their past spending patterns.

Only in America can we have multi-millionaires on food stamps and medicaid, that's pretty perverse.

I don't remember the source, but I read that when Medicaid used to means test everyone, it was more expensive and complicated to administer. They didn't have enough staff to verify in a timely manner, so everyone would get approved, then people would retroactively go through the backlog and start kicking people off. Anyone see the same info and know how to verify it?

Also FYI for anyone going to the daily signal link, that's owned by the heritage foundation, one of the biggest conservative policy groups in the US. The kind that wants Medicaid/ACA to not exist at all and will chip away at them by any means necessary.

This sounds about right, I have no doubt putting in place controls will increase the cost of the program. Yet another reason for single payer.

So what is more perverse - a millionaire getting free Medicaid, or a millionaire getting an even more expensive premium tax credit?

[mm1970]

Consider two people, John Spendypance, and John Saver.  They both earn a fabulous $200K a year salary, at an identical job, with identical W-2's and 1040s and tax burdens each year.  They both work for 10 years.  They are identical in every way, except their spending/consumption habits.  They both paid an identical amount of federal, state, and fica taxes.

John Spendypance spends every penny he takes home on vacations, bar tabs, restaurants, fancy cars, etc.

John Saver packs his lunch, takes the bus to work, rarely goes out.  He saves every penny he can.

After 10 years of work, the economy takes a downturn, and both John Spendypance and John Saver get laid off from their jobs.  One of them has a bank account (or investments) of hundreds of thousands of dollars. The other one has a bank balance of $0.00.

In this scenario, I don't agree with the premise that one of these folks deserves more financial assistance than the other.  They (both) made their own beds, so to speak.  If you believe otherwise, then wouldn't it be true to say that John Saver has been subsidizing the lifestyle of John Spendypance all along?

Consider two people Mary Bossman, and Eloise Workerdude.  Mary Bossman decided she wanted to be a BOSS.  So with a little bit of seed money from her parents, and a great idea - she started a company.  Oh, it was slow going and she was the only employee for the first few years. But then she was successful.  And the company grew.  She hires Eloise Workerdude to help her with the basics of running the business.  Mostly office type paperwork, for which Eloise is well-suited. 

Eloise, of course, makes minimum wage at first, but as time goes on, gets small raises - 10 cents here, 20 cents there.  Eventually she's making more than minimum, but still not enough to buy insurance on the open market.   Luckily, Eloise's husband has insurance for the family at a relatively reasonable rate.

Fast forward 15 years and Mary Bossman has hired 15 more people and has been raking in the bucks for well over a decade.  Plowed some into the business, saved the rest.  Eloise still isn't making that much money because - well, why give her a raise if she's willing to work for less?  Mary decides to retire, sells the business to an outsider who lays off most of the employees, including Eloise.  Unfortunately this coincides with Eloise's husband losing his job too, so no more company provided health insurance.

Should both Mary Bossman, whose net worth is approximately $2M by now, and Eloise Workerdude, whose net worth is whatever their house is worth, both be eligible for the same subsidies?

[MonkeyJenga]

Only in America do we not have a decent public option for healthcare for everyone, regardless of income and assets.

Other countries with similar GDP/wealth tend to have a much stronger safety net with fewer restrictions on who uses it.

Quote from: Rosy on Today at 08:07:38 AM
The topic at hand is a loophole that exists in favor of the wealthy - a loophole that should have been shut down immediately when it was discovered!

But this isn't a new and surprising loophole. Medicaid previously had means testing. Expanded Medicaid doesn't. I'm certain lawmakers discussed means testing while writing the law.

You may be right that lawmakers discussed means testing while writing the law, but it makes me wonder now, why they would not use it for expanded Medicaid? Wouldn't it make sense to simply adopt the same means testing in place for standard Medicaid?

@MonkeyJenga -  When you say this isn't a new or surprising loophole that indicates to me, it was left available by the rich for the rich? Wow, that is even worse than I thought - maybe for the first time in my life, I am beginning to seriously object to the underhanded greedy tactics of the rich in the US.
It's like Versailles before the revolution:) - let them eat cake.

One potential reason for eliminating means testing, aside from trying to expand coverage, is because it is complex, expensive, and difficult to administer. Medicaid expansion was not a boondoggle for multimillionaires. There's still a stigma around going on Medicaid, and the truly rich are going to do what they can to avoid it.

I've gotta be honest, I'm confused by your stance on this issue. You say you want "decent universal healthcare for all." One goal of the ACA combined with Medicaid expansion was to get much closer to that goal. But you object to the universal element of Medicaid expansion and want to put restrictions back in place?

Do you find it outrageous that ACA subsidies are not means tested? Do you think anyone with assets over a certain amount should be on their own for healthcare, while also thinking we should have universal healthcare? I am not trying to attack you, I am trying to understand what to me seems like a disconnect.

[jlcnuke]

Only in America do we not have a decent public option for healthcare for everyone, regardless of income and assets.

Other countries with similar GDP/wealth tend to have a much stronger safety net with fewer restrictions on who uses it.

Quote from: Rosy on Today at 08:07:38 AM
The topic at hand is a loophole that exists in favor of the wealthy - a loophole that should have been shut down immediately when it was discovered!

But this isn't a new and surprising loophole. Medicaid previously had means testing. Expanded Medicaid doesn't. I'm certain lawmakers discussed means testing while writing the law.

You may be right that lawmakers discussed means testing while writing the law, but it makes me wonder now, why they would not use it for expanded Medicaid? Wouldn't it make sense to simply adopt the same means testing in place for standard Medicaid?

@MonkeyJenga -  When you say this isn't a new or surprising loophole that indicates to me, it was left available by the rich for the rich? Wow, that is even worse than I thought - maybe for the first time in my life, I am beginning to seriously object to the underhanded greedy tactics of the rich in the US.
It's like Versailles before the revolution:) - let them eat cake.

One potential reason for eliminating means testing, aside from trying to expand coverage, is because it is complex, expensive, and difficult to administer. Medicaid expansion was not a boondoggle for multimillionaires. There's still a stigma around going on Medicaid, and the truly rich are going to do what they can to avoid it.

I've gotta be honest, I'm confused by your stance on this issue. You say you want "decent universal healthcare for all." One goal of the ACA combined with Medicaid expansion was to get much closer to that goal. But you object to the universal element of Medicaid expansion and want to put restrictions back in place?

Do you find it outrageous that ACA subsidies are not means tested? Do you think anyone with assets over a certain amount should be on their own for healthcare, while also thinking we should have universal healthcare? I am not trying to attack you, I am trying to understand what to me seems like a disconnect.

Universal healthcare is, imo, much more preferable to our current system. To me, it's as obvious as "universal road work" or any other infrastructure. Providing basic and necessary medical care to the country should be a priority for any developed nation. Until we get to that point, however, providing subsidies to those who don't need them seems to be an extraordinary waste of taxpayer money which could be better used in other ways.

Lawmakers either didn't care or didn't think it was worth differentiating between "I have $40k/year worth of income and work 3 jobs to get that and barely scrape by with my family of 5" and "I carefully control my income from my millions worth of investments so I can strategically adjust my income to get thousands of dollars in health insurance subsidies" so that I didn't bother working for an extra year or two in my 40's or 50's to comfortably enjoy retirement and pay for my own healthcare costs. 

Person 1. Make $70k/year and save 5% of that to get your employer match = no subsidy at all.
Person 2. Have $50 million dollars in investments but only take enough out of particular accounts so that your tax return gets you 5-figures worth of money back (via ACA credit) on your $0 paid in taxes.
Person 3. Make $30k/year supporting yourself and 2 dependents by working 2 jobs. Get the same subsidies as person 2.

I really don't think the credits were designed such that they "meant them" for Person 2 and 3 while making sure to exclude person 1. Person 2 just wasn't a large enough percentage of the people to bother writing the tax code around imo.  If EVERYONE got the same credits, then it would make sense for everyone, regardless of financial situation, to get them; but the lawmakers specifically designed it so that people of "means" couldn't get the subsidies. They did "means test" the credits but only bothered doing so based on income. That there were ways around that testing so that "the rich" could still get the subsidies wasn't "by design" in my opinion.

[Million2000]

Simple question, do you think multi-millionaires should get food stamps? Why or why not?

I believe that if there are government programs in place, paid for by all our taxes, that are meant as a safety net against loss of income, then these programs should be available to everyone, regardless of their past spending patterns.

Only in America can we have multi-millionaires on food stamps and medicaid, that's pretty perverse.

I don't remember the source, but I read that when Medicaid used to means test everyone, it was more expensive and complicated to administer. They didn't have enough staff to verify in a timely manner, so everyone would get approved, then people would retroactively go through the backlog and start kicking people off. Anyone see the same info and know how to verify it?

Also FYI for anyone going to the daily signal link, that's owned by the heritage foundation, one of the biggest conservative policy groups in the US. The kind that wants Medicaid/ACA to not exist at all and will chip away at them by any means necessary.

This sounds about right, I have no doubt putting in place controls will increase the cost of the program. Yet another reason for single payer.

So what is more perverse - a millionaire getting free Medicaid, or a millionaire getting an even more expensive premium tax credit?

Both are pretty damn perverse.

[MonkeyJenga]

Universal healthcare is, imo, much more preferable to our current system. To me, it's as obvious as "universal road work" or any other infrastructure. Providing basic and necessary medical care to the country should be a priority for any developed nation. Until we get to that point, however, providing subsidies to those who don't need them seems to be an extraordinary waste of taxpayer money which could be better used in other ways.

Lawmakers either didn't care or didn't think it was worth differentiating between "I have $40k/year worth of income and work 3 jobs to get that and barely scrape by with my family of 5" and "I carefully control my income from my millions worth of investments so I can strategically adjust my income to get thousands of dollars in health insurance subsidies" so that I didn't bother working for an extra year or two in my 40's or 50's to comfortably enjoy retirement and pay for my own healthcare costs. 

Person 1. Make $70k/year and save 5% of that to get your employer match = no subsidy at all.
Person 2. Have $50 million dollars in investments but only take enough out of particular accounts so that your tax return gets you 5-figures worth of money back (via ACA credit) on your $0 paid in taxes.
Person 3. Make $30k/year supporting yourself and 2 dependents by working 2 jobs. Get the same subsidies as person 2.

I really don't think the credits were designed such that they "meant them" for Person 2 and 3 while making sure to exclude person 1. Person 2 just wasn't a large enough percentage of the people to bother writing the tax code around imo.

Your final sentence goes back to a reason for eliminating means testing. It adds a lot of bureaucracy and wasteful spending to try to eliminate a rare case where someone might not "deserve" healthcare for the same price as someone else. It also could be why they went for Medicaid expansion as opposed to lowering the income level for the ACA, since Medicaid is cheaper to administer.

Hypothetical question: if it costs the government more to do means testing than it saves in denied health insurance coverage, would you still want to enforce means testing?

[jlcnuke]

Universal healthcare is, imo, much more preferable to our current system. To me, it's as obvious as "universal road work" or any other infrastructure. Providing basic and necessary medical care to the country should be a priority for any developed nation. Until we get to that point, however, providing subsidies to those who don't need them seems to be an extraordinary waste of taxpayer money which could be better used in other ways.

Lawmakers either didn't care or didn't think it was worth differentiating between "I have $40k/year worth of income and work 3 jobs to get that and barely scrape by with my family of 5" and "I carefully control my income from my millions worth of investments so I can strategically adjust my income to get thousands of dollars in health insurance subsidies" so that I didn't bother working for an extra year or two in my 40's or 50's to comfortably enjoy retirement and pay for my own healthcare costs. 

Person 1. Make $70k/year and save 5% of that to get your employer match = no subsidy at all.
Person 2. Have $50 million dollars in investments but only take enough out of particular accounts so that your tax return gets you 5-figures worth of money back (via ACA credit) on your $0 paid in taxes.
Person 3. Make $30k/year supporting yourself and 2 dependents by working 2 jobs. Get the same subsidies as person 2.

I really don't think the credits were designed such that they "meant them" for Person 2 and 3 while making sure to exclude person 1. Person 2 just wasn't a large enough percentage of the people to bother writing the tax code around imo.

Your final sentence goes back to a reason for eliminating means testing. It adds a lot of bureaucracy and wasteful spending to try to eliminate a rare case where someone might not "deserve" healthcare for the same price as someone else. It also could be why they went for Medicaid expansion as opposed to lowering the income level for the ACA, since Medicaid is cheaper to administer.

Hypothetical question: if it costs the government more to do means testing than it saves in denied health insurance coverage, would you still want to enforce means testing?

I assume you meant to ask is I'd want to enforce means testing if it cost more than the government would save in "refusing subsidies for health insurance costs to those without a need" as I have no idea what you meant otherwise, and the answer would be no.

However, I'm certain there are hundreds of thousands (based on people I've read discuss how they're adjusting their incomes to qualify while posting about their substantial assets on the same forums) and likely millions (taking into account all those I don't see posting that are undoubtedly out there) in subsidies paid to people of substantial wealth each year and I can't imagine that adding a couple lines on tax forms such as "do you have assets outside of your primary residence with a fair market value over $x million dollars?" and making the subsidy calculation say "no subsidy" for anyone answering yes. Answering "no" when you in fact should answer "yes" would obviously be fraud and illegal, so I'll just assume that anyone willing to commit tax fraud for one reason is likely to commit tax fraud in another way, so enforcement costs for tax fraud would be a wash in this hypothetical. As such, I can't really see it being a huge issue or cost, but I admit designing means testing for taxpayer subsidies is far from my area of expertise so I could be wrong about how complex it would be. Though "do you have $10 million in liquid investments (brokerage, retirement, savings, checking, CDs, money market, etc accounts?" doesn't seem like a difficult or expensive question to add to a tax form in my lay opinion.

Either way, giving 5-figure subsidies to millionaires/multi-millionaires while refusing to provide any such subsidy to people with little assets but a decent income (not even high income, just "pretty decent" seems pretty asinine to most people I'd imagine.

[FINate]

Back to the OP question. I think it's possible, but not concerned about my personal situation.  We have enough to cover it, and with the mandate going away next year we would probably just go for a high deductible/low premium catastrophic plan. I want health insurance, not prepaid health care.

If an asset test does happen it will mostly hurt the middle class, especially sole proprietors and very small businesses, and the result will be a net negative.

I'm FIRE and get ACA premium subsidies, primarily because of the mandate. Interesting that anyone is surprised about wealthy folks making use of the benefits, that this is somehow a "loophole" or "unintended." I distinctly remember advocates of the law touting the benefits of not being tied to a job for healthcare - that it would create opportunities for new small businesses, gig workers, those who want to volunteer or raise kids. Freedom from corporate shackles. This is how the law was sold to the public. Are we so dumb as a nation that we didn't realize those who could afford to quit a high-paying corp job to volunteer or raise kids or whatever are very likely to have substantial assets?

The U.S. needs to make up its mind: Is healthcare a human right or not? If it's a human right then just get on with single payer/universal coverage and be done with it. It then becomes an entitlement - income, assets, etc. do not matter one iota. If it's not a human right then we need something better than the ACA. The health insurance mandate was always problematic and a prime example of special interests (insurers) swaying legislation in their favor. In my ideal world preexisting conditions would not be allowed for consideration, and to prevent gaming of the system everyone would have an open enrollment window. In essence the entire nation (or state by state) would become a large group plan, and insurers would be allowed to sell whatever level of coverage they want to offer but would have to accept everyone at the same rates.

[Laura Ingalls]

Person 1. Make $70k/year and save 5% of that to get your employer match = no subsidy at all.
Person 2. Have $50 million dollars in investments but only take enough out of particular accounts so that your tax return gets you 5-figures worth of money back (via ACA credit) on your $0 paid in taxes.
Person 3. Make $30k/year supporting yourself and 2 dependents by working 2 jobs. Get the same subsidies as person 2.

Theoretically, one could have a net worth of $50 million and still be person 1 or person 3.  Also it would be exceptionally hard to have 50 mill and keep your income under 400% of poverty.  Just 1% dividends would be 500k a year.  Maybe if you had pre-iPo shares of FAANG stocks in your 401k.  Or if you own a mountain  of Berkshire stock.  You are seriously talking about outliers here. A person with a couple of mil would be more likely.

[DreamFIRE]

This reminds me of a news story I saw on a major television network many years ago, maybe 15 to 20 years ago, about wealthy seniors who use Medicare, which they were fully entitled to.  From what I recall, they were trying to get across the point that these seniors could afford to pay for their own healthcare and shouldn't be entitled to use Medicare.  But the law is what matters, and they are entitled.  There is no "should" or "shouldn't" in that sense as those are just opinions.  All these years later, nothing has changed.

My opinion is that saving should not be disincentivized, which is what happens if you factor in existing wealth for a benefit or entitlement.  Savings rates are low enough as it is.

I like rantk81's example, and is the very thing I was thinking of when I read the OP.  You have two identical earners, one lives frugally and saves throughout his career building a nice nest egg, and the other one is a fool who spends like a drunken sailor having a great time with nothing saved.  Rewarding the fool while penalizing the frugal saver is a terrible idea.  The ACA's method of using income to determine Medicaid and subsidy eligibility makes the most sense, which explains why that's what is actually specified in the law, despite some complaints among a minority of the public.

As to the question in the subject, my answer is a resounding, "No! I am not concerned about that at all."  If you note, the article linked to is over 2 years old, and so is this one  https://www.cnbc.com/2016/01/27/theyre-millionaires-and-they-get-obamacare-subsidies.html .   These days, there are definitely concerns about the ACA that are frequently discussed, especially with the sabotage by the Trump administration (and the removal of the individual mandate in the tax cut law), but this particular issue discussed in this thread is way down the list of what concerns the vast majority of people.  I can't remember it even coming up in any mainstream article recently.  Just like Medicare and that news story from many years ago, I don't expect anything to change for the wealthy individuals who want to take advantage of the law as it is written, and think it is very unlikely there will be an asset test for ACA in the foreseeable future (Medicaid or subsidies.)

For me personally, when I FIRE in about a year, I expect to still have over $1.2M in addition to my fully paid-for residence, and I will take full advantage of ACA subsidies and CSR's as best I can as legally entitled to under the law.   "Shoulds", "shouldn'ts", "designed for" and opinions in general are not a factor.  This will allow me to spend upwards of $30K/yr on my travel budget.  :)

You are seriously talking about outliers here. A person with a couple of mil would be more likely.

Areed.  In the article I linked to, the author mentioned clients with up to $3M.  I don't fit any of the 3 people in the example.  The third person is close in income, but I'm single and plan to regulate my taxable income to about $18K/yr while not working at all, and I have $1.2M invested, which isn't specified for the third person, but I certainly don't have $50M as the second person!

[Dictionary Time]

I thought there was an asset test at least as far as the elderly.  When they go to the nursing home, they have to deplete their assets and sell their houses, etc. before they qualify for Medicaid.  Is that not true any more?

[DreamFIRE]

I thought there was an asset test at least as far as the elderly.  When they go to the nursing home, they have to deplete their assets and sell their houses, etc. before they qualify for Medicaid.  Is that not true any more?

That's not related to the expanded Medicaid under the ACA.  That structure was in place before the ACA.  That is true, for example, about the elderly and long term nursing home care.

On this topic, here's a recent thread where Medicaid work requirements and estate recovery were discussed:

https://forum.mrmoneymustache.com/welcome-to-the-forum/medicaid-work-requirements-for-the-'able-bodied'/

[swampwiz]

Lawmakers either didn't care or didn't think it was worth differentiating between "I have $40k/year worth of income and work 3 jobs to get that and barely scrape by with my family of 5" and "I carefully control my income from my millions worth of investments so I can strategically adjust my income to get thousands of dollars in health insurance subsidies" so that I didn't bother working for an extra year or two in my 40's or 50's to comfortably enjoy retirement and pay for my own healthcare costs. 

Person 1. Make $70k/year and save 5% of that to get your employer match = no subsidy at all.
Person 2. Have $50 million dollars in investments but only take enough out of particular accounts so that your tax return gets you 5-figures worth of money back (via ACA credit) on your $0 paid in taxes.
Person 3. Make $30k/year supporting yourself and 2 dependents by working 2 jobs. Get the same subsidies as person 2.

I really don't think the credits were designed such that they "meant them" for Person 2 and 3 while making sure to exclude person 1. Person 2 just wasn't a large enough percentage of the people to bother writing the tax code around imo.  If EVERYONE got the same credits, then it would make sense for everyone, regardless of financial situation, to get them; but the lawmakers specifically designed it so that people of "means" couldn't get the subsidies. They did "means test" the credits but only bothered doing so based on income. That there were ways around that testing so that "the rich" could still get the subsidies wasn't "by design" in my opinion.

It seems to me that the disconnect is that there is typically a very strong correlation between income and net worth (or at least net worth as a function of age).  Early retirees, especially those that "took the cheese" when the Roth was offered, break this correlation by having a very high net worth but low income.  (Really, such folks with a big Roth should be considered as having paid their taxes early.)

[mathlete]

I hope it does.

[Paul der Krake]

I plan on using ACA subsidies and even Medicaid if necessary, simply because individually I have no say in the matter of how the US government decides to care for its population. Right now, it has decided that a patchwork of outrageously expensive layers is the way to go.

The government does tons of stupid expensive shit and I have no say in it either. I think it could provide much more cost-effective defense that doesn't include keeping 1 million people on active duty payroll in supposedly peace time, but you don't see me refusing coverage and paying my own private militia either.

I also think low gas prices are a terrible public policy that contributes to everything I despise about suburban America and its endless maze of strip malls, but I don't leave a tip at the gas station either.

Why do I have a moral obligation to go out of my way and overpay for health coverage when everybody already agrees the prices are out of control? It's fine to want to impose an asset test, but expecting early retirees to voluntarily refuse the existing subsidies is ludicrous.

[Million2000]

I plan on using ACA subsidies and even Medicaid if necessary, simply because individually I have no say in the matter of how the US government decides to care for its population. Right now, it has decided that a patchwork of outrageously expensive layers is the way to go.

The government does tons of stupid expensive shit and I have no say in it either. I think it could provide much more cost-effective defense that doesn't include keeping 1 million people on active duty payroll in supposedly peace time, but you don't see me refusing coverage and paying my own private militia either.

I also think low gas prices are a terrible public policy that contributes to everything I despise about suburban America and its endless maze of strip malls, but I don't leave a tip at the gas station either.

Why do I have a moral obligation to go out of my way and overpay for health coverage when everybody already agrees the prices are out of control? It's fine to want to impose an asset test, but expecting early retirees to voluntarily refuse the existing subsidies is ludicrous.

I think you're right, and I don't judge those early retirees on here who use medicaid or receive subsidies even though they could afford otherwise. In the current healthcare environment, I don't begrudge anyone for using a loophole or "hack" to save money. Just like at tax time, I plan to use every legal measure I can to reduce what I owe. What I don't get is when people who have sufficient wealth defend or justify this system or think its a good thing to use funds put in place for the poor and lower middle class to reduce their own expenses. But I guess that shouldn't be surprising, money has a way of influencing one's opinion.

[Acastus]

Like Mr. & Ms. Our Next Life , I want to keep retirement income above the Medicaid threshold but still get the ACA subsidies. Unlike them, I am OK with collecting the cost sharing subsidies. I may want or be forced to have a bit higher MAGI than 250% poverty, and I am not worrying about it. I will be well below the 400% poverty cut off.

Is anyone collecting the cost sharing, aka deduction reducing, subsidies? How much are those really worth? I am assuming they pay around $2k of the family deductible, but you have to sign up to see what they are worth. I am not retired quite yet.

[Acastus]

Who wants to be on Medicaid??  In most states it is garbage coverage.  Most REs go out of their way to avoid being in it.

I was on Medicaid in New York a decade ago during an employment gap, and it was the best coverage I had had in several years. I think it was an extended version of Medicaid that NY had at the state level. The network was somewhat restricted, but that never affected me except our choice in dentist. Our existing doctors kept us, but I think it would have been difficult to sign up with a new doctor.

[jim555]

Who wants to be on Medicaid??  In most states it is garbage coverage.  Most REs go out of their way to avoid being in it.

I was on Medicaid in New York a decade ago during an employment gap, and it was the best coverage I had had in several years. I think it was an extended version of Medicaid that NY had at the state level. The network was somewhat restricted, but that never affected me except our choice in dentist. Our existing doctors kept us, but I think it would have been difficult to sign up with a new doctor.

NY is one of the few states where it is not garbage.  Most other states are hostile and it shows.

[Legal Eagle]

Consider two people, John Spendypance, and John Saver.  They both earn a fabulous $200K a year salary, at an identical job, with identical W-2's and 1040s and tax burdens each year.  They both work for 10 years.  They are identical in every way, except their spending/consumption habits.  They both paid an identical amount of federal, state, and fica taxes.

John Spendypance spends every penny he takes home on vacations, bar tabs, restaurants, fancy cars, etc.

John Saver packs his lunch, takes the bus to work, rarely goes out.  He saves every penny he can.

After 10 years of work, the economy takes a downturn, and both John Spendypance and John Saver get laid off from their jobs.  One of them has a bank account (or investments) of hundreds of thousands of dollars. The other one has a bank balance of $0.00.

In this scenario, I don't agree with the premise that one of these folks deserves more financial assistance than the other.  They (both) made their own beds, so to speak.  If you believe otherwise, then wouldn't it be true to say that John Saver has been subsidizing the lifestyle of John Spendypance all along?

Consider two people Mary Bossman, and Eloise Workerdude.  Mary Bossman decided she wanted to be a BOSS.  So with a little bit of seed money from her parents, and a great idea - she started a company.  Oh, it was slow going and she was the only employee for the first few years. But then she was successful.  And the company grew.  She hires Eloise Workerdude to help her with the basics of running the business.  Mostly office type paperwork, for which Eloise is well-suited. 

Eloise, of course, makes minimum wage at first, but as time goes on, gets small raises - 10 cents here, 20 cents there.  Eventually she's making more than minimum, but still not enough to buy insurance on the open market.   Luckily, Eloise's husband has insurance for the family at a relatively reasonable rate.

Fast forward 15 years and Mary Bossman has hired 15 more people and has been raking in the bucks for well over a decade.  Plowed some into the business, saved the rest.  Eloise still isn't making that much money because - well, why give her a raise if she's willing to work for less?  Mary decides to retire, sells the business to an outsider who lays off most of the employees, including Eloise.  Unfortunately this coincides with Eloise's husband losing his job too, so no more company provided health insurance.

Should both Mary Bossman, whose net worth is approximately $2M by now, and Eloise Workerdude, whose net worth is whatever their house is worth, both be eligible for the same subsidies?

Well Mary Bossman has likely paid hundreds of thousands, if not millions, of dollars in taxes over the years.  Eloise Workerdude, on the other hand, has probably paid less in the entirety of her career than Mary Bossman pays in a single year.  Shouldn't Mary Bossman be rewarded in some form or fashion for her generosity to countless government entitlement programs over the years?  After all, she's paid for healthcare for Eloise and a dozen of her closest friends by now.  So I guess it's just wrong that she would expect any similar peace and security when she's decided to bail from corporate slavery?

Oh, and to all the other posts, LOL on all these millionaires standing in line for food stamps.  I'm sure there's rampant abuse of that program by the wealthy.     

[FINate]

Is anyone collecting the cost sharing, aka deduction reducing, subsidies? How much are those really worth? I am assuming they pay around $2k of the family deductible, but you have to sign up to see what they are worth. I am not retired quite yet.

Just filed our taxes. According to Form 1095-A (from the insurance exchange) we got subsidies of about 9k and paid about 1.5k out of pocket for a Bronze level plan for our family of 4. The trick is to be in that sweet spot w.r.t. income, just enough but not too much. If you can engineer this in FIRE then I think it's worth it.

I still think it's weird that we don't withhold any state or federal taxes and yet for the past two years we've gotten a refund, due to certain tax credits. We keep our AGI low because we have no mortgage or other debts and very few expenses. I understand the mechanics of how it works on paper, but after decades of paying taxes up the wazoo it's a strange feeling to be on the other end of things. Makes me think I should have retired sooner :)

[TNT]

Who wants to be on Medicaid??  In most states it is garbage coverage.  Most REs go out of their way to avoid being in it.

ME. I can't imagine the dire straits I would be in if not for Medicaid. I can say that access to mental health services is not ideal, but in the last year, I've received top-notch medical care from some of the best providers in my state, at zero cost. I'm alive because of it.

I probably wouldn't qualify if there were means tests, because I have a small amount of savings and ~$45,000 in an IRA.

[Monkey Uncle]

Like Mr. & Ms. Our Next Life , I want to keep retirement income above the Medicaid threshold but still get the ACA subsidies. Unlike them, I am OK with collecting the cost sharing subsidies. I may want or be forced to have a bit higher MAGI than 250% poverty, and I am not worrying about it. I will be well below the 400% poverty cut off.

Is anyone collecting the cost sharing, aka deduction reducing, subsidies? How much are those really worth? I am assuming they pay around $2k of the family deductible, but you have to sign up to see what they are worth. I am not retired quite yet.

This is my first year on an ACA silver plan (just FIREd in January).  I am getting the cost sharing reduction, and it is worth plenty.  It lopped about $4,800 off of my individual deductible, and almost $1,700 off the max OOP (multiply those numbers by 2 to include my wife).  You have to watch your income pretty closely, though, because the combined PTC and cost sharing cliff is steep enough that if you are getting close to the max subsidy and you increase your income by $10k or so, you could actually lose money on a net basis if you have a major health expense.  Or at least that's the way the numbers work in my case.

Not sure how the NY exchange works, but in my state, which uses the healthcare.gov website, you can plug in all your numbers and get a precise estimate of your PTC and cost share savings without actually signing up.

[Monkey Uncle]

Consider two people, John Spendypance, and John Saver.  They both earn a fabulous $200K a year salary, at an identical job, with identical W-2's and 1040s and tax burdens each year.  They both work for 10 years.  They are identical in every way, except their spending/consumption habits.  They both paid an identical amount of federal, state, and fica taxes.

John Spendypance spends every penny he takes home on vacations, bar tabs, restaurants, fancy cars, etc.

John Saver packs his lunch, takes the bus to work, rarely goes out.  He saves every penny he can.

After 10 years of work, the economy takes a downturn, and both John Spendypance and John Saver get laid off from their jobs.  One of them has a bank account (or investments) of hundreds of thousands of dollars. The other one has a bank balance of $0.00.

In this scenario, I don't agree with the premise that one of these folks deserves more financial assistance than the other.  They (both) made their own beds, so to speak.  If you believe otherwise, then wouldn't it be true to say that John Saver has been subsidizing the lifestyle of John Spendypance all along?

Consider two people Mary Bossman, and Eloise Workerdude.  Mary Bossman decided she wanted to be a BOSS.  So with a little bit of seed money from her parents, and a great idea - she started a company.  Oh, it was slow going and she was the only employee for the first few years. But then she was successful.  And the company grew.  She hires Eloise Workerdude to help her with the basics of running the business.  Mostly office type paperwork, for which Eloise is well-suited. 

Eloise, of course, makes minimum wage at first, but as time goes on, gets small raises - 10 cents here, 20 cents there.  Eventually she's making more than minimum, but still not enough to buy insurance on the open market.   Luckily, Eloise's husband has insurance for the family at a relatively reasonable rate.

Fast forward 15 years and Mary Bossman has hired 15 more people and has been raking in the bucks for well over a decade.  Plowed some into the business, saved the rest.  Eloise still isn't making that much money because - well, why give her a raise if she's willing to work for less?  Mary decides to retire, sells the business to an outsider who lays off most of the employees, including Eloise.  Unfortunately this coincides with Eloise's husband losing his job too, so no more company provided health insurance.

Should both Mary Bossman, whose net worth is approximately $2M by now, and Eloise Workerdude, whose net worth is whatever their house is worth, both be eligible for the same subsidies?

Well Mary Bossman has likely paid hundreds of thousands, if not millions, of dollars in taxes over the years.  Eloise Workerdude, on the other hand, has probably paid less in the entirety of her career than Mary Bossman pays in a single year.  Shouldn't Mary Bossman be rewarded in some form or fashion for her generosity to countless government entitlement programs over the years?  After all, she's paid for healthcare for Eloise and a dozen of her closest friends by now.  So I guess it's just wrong that she would expect any similar peace and security when she's decided to bail from corporate slavery?

Oh, and to all the other posts, LOL on all these millionaires standing in line for food stamps.  I'm sure there's rampant abuse of that program by the wealthy.   

I think it's a bit ridiculous to engage in such contortions to justify why a relatively wealthy person "deserves" subsidies that are meant to help low income people.  It's a loophole, plain and simple.  As a FIREd person, do I take advantage of that loophole?  You bet your sweet ass I do.  But if that loophole gets closed, would I feel like a great injustice had been done to me?  No, I'd just say it was fun while it lasted, and then figure out some other way to get by.

[swampwiz]

Who wants to be on Medicaid??  In most states it is garbage coverage.  Most REs go out of their way to avoid being in it.

I was on Medicaid in New York a decade ago during an employment gap, and it was the best coverage I had had in several years. I think it was an extended version of Medicaid that NY had at the state level. The network was somewhat restricted, but that never affected me except our choice in dentist. Our existing doctors kept us, but I think it would have been difficult to sign up with a new doctor.

NY is one of the few states where it is not garbage.  Most other states are hostile and it shows.

I guess it's not hostile in a redneck state like LA either.  And the dentist I got on Medicaid is one of the best - he has a way of applying the anesthetic so that I can't feel the needle.

[jim555]

The number of people with high NW and very low income is very low.  99.998% have minimal assets.  It isn't worth the administrative hassle to set up an asset verification system, considering 10s of millions are on ACA Medicaid the administration would be an enormous undertaking.  Those states that want a work requirement will soon find out they are spending more on administration than they are saving.  Remember a state only has to put up 10% for ACA Medicaid.  And most of that comes back to them through savings in other places because of the expansion. 

[Legal Eagle]

I think it's a bit ridiculous to engage in such contortions to justify why a relatively wealthy person "deserves" subsidies that are meant to help low income people.  It's a loophole, plain and simple.  As a FIREd person, do I take advantage of that loophole?  You bet your sweet ass I do.  But if that loophole gets closed, would I feel like a great injustice had been done to me?  No, I'd just say it was fun while it lasted, and then figure out some other way to get by.

I agree with your comments, and intend to treat this and all other potential benefits exactly the same (social security being another great example).  I build all my models to get by with no "help" whatsoever.  But if it's there, trust me I'll take it.  I will have darn well paid for it 50 times over, so yes, I'll use it if available.

I just tried to draw out that both side of this include "contortions."  Including the one that I originally responded to, complete with the person of means having gotten their start with a gift of money from their parents.  That's always the way these things go.  Nobody has ever just started from the bottom, earned a bunch of money, paid a bunch of taxes along the way, and positioned themselves nicely.  It's always something that was given to them, something they don't deserve, something that it's "unfair" for them to get, etc.  You are not given the option of opting out of paying for social welfare programs.  So I never get why you should be so freely kicked out of benefiting from them just because you've, in some bureaucrat's eyes, become "rich." 

In a country where the vast majority of people are dead broke, pretty much everyone on Mr. Money Mustache, if they get where they are planning to get, would fail this supposed means test.  So where do we draw the line?  Medicaid?  ACA supplements?  Social security?     

[Monkey Uncle]

I think it's a bit ridiculous to engage in such contortions to justify why a relatively wealthy person "deserves" subsidies that are meant to help low income people.  It's a loophole, plain and simple.  As a FIREd person, do I take advantage of that loophole?  You bet your sweet ass I do.  But if that loophole gets closed, would I feel like a great injustice had been done to me?  No, I'd just say it was fun while it lasted, and then figure out some other way to get by.

I agree with your comments, and intend to treat this and all other potential benefits exactly the same (social security being another great example).  I build all my models to get by with no "help" whatsoever.  But if it's there, trust me I'll take it.  I will have darn well paid for it 50 times over, so yes, I'll use it if available.

I just tried to draw out that both side of this include "contortions."  Including the one that I originally responded to, complete with the person of means having gotten their start with a gift of money from their parents.  That's always the way these things go.  Nobody has ever just started from the bottom, earned a bunch of money, paid a bunch of taxes along the way, and positioned themselves nicely.  It's always something that was given to them, something they don't deserve, something that it's "unfair" for them to get, etc.  You are not given the option of opting out of paying for social welfare programs.  So I never get why you should be so freely kicked out of benefiting from them just because you've, in some bureaucrat's eyes, become "rich." 

In a country where the vast majority of people are dead broke, pretty much everyone on Mr. Money Mustache, if they get where they are planning to get, would fail this supposed means test.  So where do we draw the line?  Medicaid?  ACA supplements?  Social security?     

Yes, I agree that we've all paid our dues in one way or another, and we've all also benefitted from "welfare" in one way or another.  So we shouldn't feel the least bit guilty about taking advantage of whatever is legally available to us.