Author Topic: What comes after the ACA?  (Read 779478 times)

MDM

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Re: What comes after the ACA?
« Reply #3800 on: October 25, 2017, 08:29:12 PM »
Trump doesn't have to resume Obamacare health care subsidies, judge rules.

Quote
"The state of California is standing on the courthouse steps denouncing the president for taking away people's health care, when the truth is that California has come up with a solution to that issue that is going to result in better health care for a lot of people"

sol

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Re: What comes after the ACA?
« Reply #3801 on: October 25, 2017, 08:45:59 PM »
Trump doesn't have to resume Obamacare health care subsidies, judge rules.

Quote
"The state of California is standing on the courthouse steps denouncing the president for taking away people's health care, when the truth is that California has come up with a solution to that issue that is going to result in better health care for a lot of people"

Only Fox News could spin this situation as a win for the President.  Blue states have successfully found a way to make the federal government spend MORE on subsidized healthcare by cancelling the CSRs and creating a fake insurance plan that jacks up the straight market subsidy by the same amount (google "silver switcharoo" and read all about it).  Red states have refused this fix, and people there will pay more for insurance.

Republicans want the government to pay less for healthcare and cover fewer people, but by cancelling the CSRs they're instead going to have to pay more to subsidize MORE people.  In blue states.  In red states, people will just lose the subsidy and have to pay more.  In what way is this a victory for Republicans?

MDM

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Re: What comes after the ACA?
« Reply #3802 on: October 25, 2017, 08:52:04 PM »
Only Fox News....
It's reported pretty much the same way in the NY Times and Wash. Post.

boarder42

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Re: What comes after the ACA?
« Reply #3803 on: October 26, 2017, 03:40:46 AM »
Man Trump really did make these plans cost less. When I enter our expected spending and expected ages and family at fire in 5-6 years.  We get free healthcare because of how all the silver plans were increased in this state but not the bronze.  I can even go up to an insane 95k per year spending and the cheapest plan is only 151 a month. 

justchristine

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Re: What comes after the ACA?
« Reply #3804 on: October 26, 2017, 06:13:17 AM »
Man Trump really did make these plans cost less. When I enter our expected spending and expected ages and family at fire in 5-6 years.  We get free healthcare because of how all the silver plans were increased in this state but not the bronze.  I can even go up to an insane 95k per year spending and the cheapest plan is only 151 a month.
Holy Crap, I just checked and it's changed pretty dramatically from the last time I checked earlier this year.  With my desired retirement income of $40k, a bronze plan with a $6550 deductible and OOP Max runs from $156/mo at my current age of 42, $100/mo at 50yo  and $0 at 60yo. The ACA just keeps getting better and better for me.  I wasn't expecting good results living in a red state with a jackass for a governor.

jim555

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Re: What comes after the ACA?
« Reply #3805 on: October 26, 2017, 06:31:26 AM »
Shhhh...  Maybe they won't realize they are now spending billions more for the ACA. 

protostache

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Re: What comes after the ACA?
« Reply #3806 on: October 26, 2017, 07:48:08 AM »
Shhhh...  Maybe they won't realize they are now spending billions more for the ACA.

The process will be even smoother for 2019 but I wouldn't expect it to last too long. Unsubsidized people are still getting screwed. And no, the second lowest cost silver isn't a "fake plan". Millions of people are buying the second lowest cost silver this year, but they're almost all going to have subsidies. Nobody without subsidies is going to buy an on-exchange silver.

I would expect something like Alexander-Murray to pass via the end of year must-pass budget bill, but that won't immediately bring costs down. It might not even change 2019 at this point because the regulations it talks about will take months to work up and pass, by which time insurance companies will already have their rating models set up for 2019.

The biggest thing that's going to change the market for the better is if every state adopted an Alaska or Minnesota style reinsurance plan. Those basically transfer risk for claims > $50k to the state, and the state absorbs them by shifting around the premium tax credits that the Federal government would have been paying absent the reinsurance program. This allows everyone to have lower premiums and usually saves the Feds money, or is at least revenue neutral.

sol

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Re: What comes after the ACA?
« Reply #3807 on: October 26, 2017, 08:54:46 AM »
The basic consequence of the ending the Cost Sharing Reductions is that health insurance plans got more expensive across the board.  But since they kept the premium tax credits that pay people under 400% of the federal poverty level, the increased cost of the plan just means those people get larger tax credits.  And since the amount of the tax credit is tied to the second lowest silver plan, which got more expensive, everyone under 400% gets a larger subsidy no matter what kind of plan they buy.

Trump wanted to save the government money so he stopped the subsidy that lowered deductibles on just the silver plans, but the states found this work-around plan that ended up costing the government more money for the other subsidy, the one that lowers the cost of every insurance plan.  Republicans tried to make insurance more expensive, and instead made it cheaper because they were stymied by blue state insurance techs who understand the law better.

And no, the second lowest cost silver isn't a "fake plan".

My comment about the "fake" plan wasn't about the silver plan, it was about the off-exchange identical silver plan that insurers have to create to make this fix work.  Read all about it here:  http://acasignups.net/17/10/12/there-will-be-math-silver-switcharoo-how-make-trumps-csr-sabotage-backfire

Quote
HOWEVER...there's also option number 5. This is the goofy workaround that Covered California appears to have already decided upon, and which other insurance carriers and state regulators appear to be moving towards. Here's how that would work:

The ACA says that if a carrier offers a policy on the exchange, they also have to offer it off the exchange at the same price.
However, a carrier can offer a different policy off-exchange only.
Therefore, the carrier could create a second, "new" Silver policy which is very close to the same as the on exchange version...but only offer the "new" Silver policy off exchange.
The full $6.1 million in anticpated CSR losses would now be spread across the 7,600 on-exchange Silver enrollees, or around $803/ea or $67/mo extra
Assuming the state regulators signed off on the "Silver Switcharoo" plan, here's what rates would look like for 2018:

ON EXCHANGE (full price):

Bronze: $390/mo
Silver (Plan A): $517/mo
Gold: $570/mo
Platinum: $680/mo
OFF EXCHANGE (full price):

Bronze: $390/mo
Silver (Plan A): $517/mo
Silver (Plan B): $450/mo
Gold: $570/mo
Platinum: $680/mo
At first, this sounds even worse: Fewer people screwed, but they'd be screwed by even more, right? Also, why would anyone off-exchange buy Silver Plan A when they could get virtually-identical Plan B for 13% less?

The answer to the second question is simple: They wouldn't. In fact, the insurance carriers would probably not promote Silver Plan A to their off-exchange market at all...it would be listed in their official product offerings, but completely ignored in all marketing materials and so forth; Silver A would become a phantom plan for the off-exchange market. They'd actively promote Silver Plan B off exchange, however.

That leaves the 7,600 on-exchange Silver plan enrollees.

The 6,100 CSR recipients would still receive CSR assistance and would see their APTC assistance increase by another $67/month, so their rates likely wouldn't go up at all, or only nominally.

The 400 on-exchange Silver plan enrollees who receive APTC but not CSR would also see their APTC increase by $67/mo, and again, wouldn't notice much of a change in what they actually pay.

Finally, there's the 1,100 on-exchange Silver plan enrollees who don't receive any subsidies. They would see their rates increase by $67/month...but there's a simple solution for them:

Drop their on-exchange Silver Plan A and switch the virtually-identical OFF-exchange Silver Plan B, which would be priced $67/month lower.

jorjor

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Re: What comes after the ACA?
« Reply #3808 on: October 26, 2017, 09:02:51 AM »
The process will be even smoother for 2019 but I wouldn't expect it to last too long. Unsubsidized people are still getting screwed. And no, the second lowest cost silver isn't a "fake plan". Millions of people are buying the second lowest cost silver this year, but they're almost all going to have subsidies. Nobody without subsidies is going to buy an on-exchange silver.

And they don't need to. The only reason the on-Exchange part matters is to get subsidies.

In twenty states they can buy an off-Exchange silver from any carrier on the market at a price not loaded for CSR defunding. In a handful of others at least one carrier has an off-Exchange silver without a CSR defunding load, even though not all do.

In eighteen others they can avoid the markup by buying a bronze or gold plan, since only silvers were loaded. They are screwed a tad if they really really wanted a silver, but the range of metal levels was widened this year so you can make a gold or (especially) bronze that isn't all that different from a silver anyway.

A couple others didn't allow for an increase at all.

At last count, five states spread the cost over all metal levels. Unsubsidized people will get screwed in those states.
« Last Edit: October 26, 2017, 09:07:44 AM by jorjor »

brooklynguy

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Re: What comes after the ACA?
« Reply #3809 on: October 26, 2017, 10:12:52 AM »
The consequences of the loss of CSR payments, and the potential workarounds available to the state, are different in New York and Minnesota, which are the only states to have availed themselves of the option to establish a "Basic Health Program" under the ACA (referred to in NY as the "Essential Plan").  In these two states, under the Basic Health Program, affordable coverage is made available to individuals with incomes below 200% of the federal poverty level in lieu of subsidized exchange plans.  The federal government, instead of paying premium tax credits to individuals and CSR payments to insurance companies, pays 95% of the amount of both of those types of subsidies that enrollees otherwise would have benefited from directly to the states in order to fund the Basic Health Program.  So the termination of the CSR-based component of the federal funding would have the effect of blowing a large hole in the state budget, imperiling its Basic Health Program.  (Unlike in other states, there would be almost no counterbalancing increase in the size of federal premium tax credits to offset the loss of the CSR payments, because most CSR-eligible consumers are enrolled in the Basic Health Program instead of the exchange-based plans on which premium tax credit amounts are based, so the dynamic Sol described above (i.e., elimination of CSR payments leading to increases in premiums leading to increases in premium tax credits) would not occur.)

It is currently unclear whether the Trump administration intends to cut off the CSR-based component of the federal funding for Basic Health Programs.  The official executive pronouncements of the discontinuation of the CSR payments appear to refer only to CSR payments made directly to insurers, which is not the case for the federal funding of Basic Health Programs.  But I believe the underlying rationale for the discontinuation of the payments--the purported unconstitutionality of paying them by virtue of the failure of Congress to specifically appropriate funds to do so--applies equally to the CSR-based component of the federal funding for Basic Health Programs.

GuitarStv

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Re: What comes after the ACA?
« Reply #3810 on: October 26, 2017, 10:58:42 AM »
The basic consequence of the ending the Cost Sharing Reductions is that health insurance plans got more expensive across the board.  But since they kept the premium tax credits that pay people under 400% of the federal poverty level, the increased cost of the plan just means those people get larger tax credits.  And since the amount of the tax credit is tied to the second lowest silver plan, which got more expensive, everyone under 400% gets a larger subsidy no matter what kind of plan they buy.

Trump wanted to save the government money so he stopped the subsidy that lowered deductibles on just the silver plans, but the states found this work-around plan that ended up costing the government more money for the other subsidy, the one that lowers the cost of every insurance plan.  Republicans tried to make insurance more expensive, and instead made it cheaper because they were stymied by blue state insurance techs who understand the law better.

And no, the second lowest cost silver isn't a "fake plan".

My comment about the "fake" plan wasn't about the silver plan, it was about the off-exchange identical silver plan that insurers have to create to make this fix work.  Read all about it here:  http://acasignups.net/17/10/12/there-will-be-math-silver-switcharoo-how-make-trumps-csr-sabotage-backfire

Quote
HOWEVER...there's also option number 5. This is the goofy workaround that Covered California appears to have already decided upon, and which other insurance carriers and state regulators appear to be moving towards. Here's how that would work:

The ACA says that if a carrier offers a policy on the exchange, they also have to offer it off the exchange at the same price.
However, a carrier can offer a different policy off-exchange only.
Therefore, the carrier could create a second, "new" Silver policy which is very close to the same as the on exchange version...but only offer the "new" Silver policy off exchange.
The full $6.1 million in anticpated CSR losses would now be spread across the 7,600 on-exchange Silver enrollees, or around $803/ea or $67/mo extra
Assuming the state regulators signed off on the "Silver Switcharoo" plan, here's what rates would look like for 2018:

ON EXCHANGE (full price):

Bronze: $390/mo
Silver (Plan A): $517/mo
Gold: $570/mo
Platinum: $680/mo
OFF EXCHANGE (full price):

Bronze: $390/mo
Silver (Plan A): $517/mo
Silver (Plan B): $450/mo
Gold: $570/mo
Platinum: $680/mo
At first, this sounds even worse: Fewer people screwed, but they'd be screwed by even more, right? Also, why would anyone off-exchange buy Silver Plan A when they could get virtually-identical Plan B for 13% less?

The answer to the second question is simple: They wouldn't. In fact, the insurance carriers would probably not promote Silver Plan A to their off-exchange market at all...it would be listed in their official product offerings, but completely ignored in all marketing materials and so forth; Silver A would become a phantom plan for the off-exchange market. They'd actively promote Silver Plan B off exchange, however.

That leaves the 7,600 on-exchange Silver plan enrollees.

The 6,100 CSR recipients would still receive CSR assistance and would see their APTC assistance increase by another $67/month, so their rates likely wouldn't go up at all, or only nominally.

The 400 on-exchange Silver plan enrollees who receive APTC but not CSR would also see their APTC increase by $67/mo, and again, wouldn't notice much of a change in what they actually pay.

Finally, there's the 1,100 on-exchange Silver plan enrollees who don't receive any subsidies. They would see their rates increase by $67/month...but there's a simple solution for them:

Drop their on-exchange Silver Plan A and switch the virtually-identical OFF-exchange Silver Plan B, which would be priced $67/month lower.


Sounds like a case of AMAGA . . .


Accidentally Making America Great Again.

jim555

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Re: What comes after the ACA?
« Reply #3811 on: October 26, 2017, 11:21:05 AM »
Sounds like a case of AMAGA . . .


Accidentally Making America Great Again.
God emperor 4D chess at work. 

Exflyboy

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Re: What comes after the ACA?
« Reply #3812 on: October 26, 2017, 11:21:18 AM »
Sure enough, putting in the same information in Oregon but increasing our ages by one year means our monthly payment has gone from $36/m down to $28.

Go Trump!

boarder42

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Re: What comes after the ACA?
« Reply #3813 on: October 26, 2017, 11:24:27 AM »
Sure enough, putting in the same information in Oregon but increasing our ages by one year means our monthly payment has gone from $36/m down to $28.

Go Trump!

he secretly knows what he's doing he's really smart #s

DavidAnnArbor

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Re: What comes after the ACA?
« Reply #3814 on: October 26, 2017, 02:47:53 PM »
The consequences of the loss of CSR payments, and the potential workarounds available to the state, are different in New York and Minnesota, which are the only states to have availed themselves of the option to establish a "Basic Health Program" under the ACA (referred to in NY as the "Essential Plan").  In these two states, under the Basic Health Program, affordable coverage is made available to individuals with incomes below 200% of the federal poverty level in lieu of subsidized exchange plans.  The federal government, instead of paying premium tax credits to individuals and CSR payments to insurance companies, pays 95% of the amount of both of those types of subsidies that enrollees otherwise would have benefited from directly to the states in order to fund the Basic Health Program.  So the termination of the CSR-based component of the federal funding would have the effect of blowing a large hole in the state budget, imperiling its Basic Health Program.  (Unlike in other states, there would be almost no counterbalancing increase in the size of federal premium tax credits to offset the loss of the CSR payments, because most CSR-eligible consumers are enrolled in the Basic Health Program instead of the exchange-based plans on which premium tax credit amounts are based, so the dynamic Sol described above (i.e., elimination of CSR payments leading to increases in premiums leading to increases in premium tax credits) would not occur.)

It is currently unclear whether the Trump administration intends to cut off the CSR-based component of the federal funding for Basic Health Programs.  The official executive pronouncements of the discontinuation of the CSR payments appear to refer only to CSR payments made directly to insurers, which is not the case for the federal funding of Basic Health Programs.  But I believe the underlying rationale for the discontinuation of the payments--the purported unconstitutionality of paying them by virtue of the failure of Congress to specifically appropriate funds to do so--applies equally to the CSR-based component of the federal funding for Basic Health Programs.

Despite the ruling from the judge in California, the ACA law is written that the federal government pays for these CSR subsidies. If Congress refuses to authorize payment, that doesn't negate the law. The case will now go to trial and the Trump administration will lose, and the subsidies will be paid. The Trump administration is not above the law, and there are judges and juries that will see to that.

brooklynguy

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Re: What comes after the ACA?
« Reply #3815 on: October 26, 2017, 02:58:58 PM »
Despite the ruling from the judge in California, the ACA law is written that the federal government pays for these CSR subsidies. If Congress refuses to authorize payment, that doesn't negate the law.

Yes, the law as written requires the federal government to make these payments.  But that requirement is in conflict with the US Constitution (specifically, the appropriations clause), to the extent the funds required to make the payments were not properly appropriated by Congress (and I express no view on whether or not that is actually the case).

I still remain cautiously optimistic that Congress will specifically appropriate the funds for the CSR payments before the year is out and thereby render the issue moot. 

AdrianC

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Re: What comes after the ACA?
« Reply #3816 on: October 27, 2017, 07:37:45 AM »
Our "Low Premium Silver" plan premium (on exchange) will be increasing by exactly 80% for 2018, with no subsidy. I posted more in the other thread. To summarize, it's OK, for 2018 we are looking at an "estimated premium tax credit" of $1,038/month. Thank you, president Trump! It looks like we'll have to downgrade to a Bronze plan, with a monthly premium of about $350. That's a third of what we are paying this year with no subsidy.

Mrbeardedbigbucks

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Re: What comes after the ACA?
« Reply #3817 on: October 27, 2017, 01:13:44 PM »
I'm hoping one of you ACA experts can help me out with a question. Perhaps I should post this under the "case study" section of this forum but thought i'd try here first.

My wife and I will likely FIRE in March 2018 (wife already called it quits in June). I'm trying to get a good feel for how ACA works. We'll be buying our insurance on the exchange when I leave my job. I'd like to keep my MAGI under $32400 next year. For a Silver level plan, this will keep our premium at $127 month, deductible around $1500 and max out of pocket $2900. The problem is, I have a taxable account of about 400k in a blend of cash, ETF's and a handful of stocks that pay a dividend. My MAGI could potentially go higher than $32400 due to increase in interest on my money market and/or more dividends than I anticipated.  If I go above $32400, the deductible increases to $4500 and max out of pocket will be $11700. 

When I file my 2018 tax returns and if my MAGI turns out to be over $32400, I know I'll owe money for premiums but what about the deductible? If we have healthcare expenses that exceed the $1500 deductible in 2018, will we have to pay those costs above the $1500 that the insurance picked up? (until I bump into the higher $4500 deductible)

I'm sure it's out there but I can't seem to find a definitive answer on this. Thanks for your help!

jim555

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Re: What comes after the ACA?
« Reply #3818 on: October 27, 2017, 01:38:44 PM »
I'm hoping one of you ACA experts can help me out with a question. Perhaps I should post this under the "case study" section of this forum but thought i'd try here first.

My wife and I will likely FIRE in March 2018 (wife already called it quits in June). I'm trying to get a good feel for how ACA works. We'll be buying our insurance on the exchange when I leave my job. I'd like to keep my MAGI under $32400 next year. For a Silver level plan, this will keep our premium at $127 month, deductible around $1500 and max out of pocket $2900. The problem is, I have a taxable account of about 400k in a blend of cash, ETF's and a handful of stocks that pay a dividend. My MAGI could potentially go higher than $32400 due to increase in interest on my money market and/or more dividends than I anticipated.  If I go above $32400, the deductible increases to $4500 and max out of pocket will be $11700. 

When I file my 2018 tax returns and if my MAGI turns out to be over $32400, I know I'll owe money for premiums but what about the deductible? If we have healthcare expenses that exceed the $1500 deductible in 2018, will we have to pay those costs above the $1500 that the insurance picked up? (until I bump into the higher $4500 deductible)

I'm sure it's out there but I can't seem to find a definitive answer on this. Thanks for your help!
The CSR reduced deductible is not reconcilable like the PTC subsidies are at the end of the year. 

« Last Edit: October 27, 2017, 01:43:58 PM by jim555 »

Mrbeardedbigbucks

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Re: What comes after the ACA?
« Reply #3819 on: October 27, 2017, 03:06:18 PM »
I'm hoping one of you ACA experts can help me out with a question. Perhaps I should post this under the "case study" section of this forum but thought i'd try here first.

My wife and I will likely FIRE in March 2018 (wife already called it quits in June). I'm trying to get a good feel for how ACA works. We'll be buying our insurance on the exchange when I leave my job. I'd like to keep my MAGI under $32400 next year. For a Silver level plan, this will keep our premium at $127 month, deductible around $1500 and max out of pocket $2900. The problem is, I have a taxable account of about 400k in a blend of cash, ETF's and a handful of stocks that pay a dividend. My MAGI could potentially go higher than $32400 due to increase in interest on my money market and/or more dividends than I anticipated.  If I go above $32400, the deductible increases to $4500 and max out of pocket will be $11700. 

When I file my 2018 tax returns and if my MAGI turns out to be over $32400, I know I'll owe money for premiums but what about the deductible? If we have healthcare expenses that exceed the $1500 deductible in 2018, will we have to pay those costs above the $1500 that the insurance picked up? (until I bump into the higher $4500 deductible)

I'm sure it's out there but I can't seem to find a definitive answer on this. Thanks for your help!
The CSR reduced deductible is not reconcilable like the PTC subsidies are at the end of the year. 




So that means it's possible for anyone to intentionally underestimate their income to at least lock in a lower deductible and lower max out of pocket and then come tax time, just pay the different in premiums. I must be misunderstanding something because that seems like a pretty big loophole.

DavidAnnArbor

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Re: What comes after the ACA?
« Reply #3820 on: October 27, 2017, 03:12:00 PM »
I'm hoping one of you ACA experts can help me out with a question. Perhaps I should post this under the "case study" section of this forum but thought i'd try here first.

My wife and I will likely FIRE in March 2018 (wife already called it quits in June). I'm trying to get a good feel for how ACA works. We'll be buying our insurance on the exchange when I leave my job. I'd like to keep my MAGI under $32400 next year. For a Silver level plan, this will keep our premium at $127 month, deductible around $1500 and max out of pocket $2900. The problem is, I have a taxable account of about 400k in a blend of cash, ETF's and a handful of stocks that pay a dividend. My MAGI could potentially go higher than $32400 due to increase in interest on my money market and/or more dividends than I anticipated.  If I go above $32400, the deductible increases to $4500 and max out of pocket will be $11700. 

When I file my 2018 tax returns and if my MAGI turns out to be over $32400, I know I'll owe money for premiums but what about the deductible? If we have healthcare expenses that exceed the $1500 deductible in 2018, will we have to pay those costs above the $1500 that the insurance picked up? (until I bump into the higher $4500 deductible)

I'm sure it's out there but I can't seem to find a definitive answer on this. Thanks for your help!
The CSR reduced deductible is not reconcilable like the PTC subsidies are at the end of the year. 




So that means it's possible for anyone to intentionally underestimate their income to at least lock in a lower deductible and lower max out of pocket and then come tax time, just pay the different in premiums. I must be misunderstanding something because that seems like a pretty big loophole.

If your underestimate is so ridiculous then when you apply for the health insurance through the exchange they are going to flag your application. Then you better have proof of that lowered income.

Mrbeardedbigbucks

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Re: What comes after the ACA?
« Reply #3821 on: October 27, 2017, 03:35:19 PM »
I'm hoping one of you ACA experts can help me out with a question. Perhaps I should post this under the "case study" section of this forum but thought i'd try here first.

My wife and I will likely FIRE in March 2018 (wife already called it quits in June). I'm trying to get a good feel for how ACA works. We'll be buying our insurance on the exchange when I leave my job. I'd like to keep my MAGI under $32400 next year. For a Silver level plan, this will keep our premium at $127 month, deductible around $1500 and max out of pocket $2900. The problem is, I have a taxable account of about 400k in a blend of cash, ETF's and a handful of stocks that pay a dividend. My MAGI could potentially go higher than $32400 due to increase in interest on my money market and/or more dividends than I anticipated.  If I go above $32400, the deductible increases to $4500 and max out of pocket will be $11700. 

When I file my 2018 tax returns and if my MAGI turns out to be over $32400, I know I'll owe money for premiums but what about the deductible? If we have healthcare expenses that exceed the $1500 deductible in 2018, will we have to pay those costs above the $1500 that the insurance picked up? (until I bump into the higher $4500 deductible)

I'm sure it's out there but I can't seem to find a definitive answer on this. Thanks for your help!
The CSR reduced deductible is not reconcilable like the PTC subsidies are at the end of the year. 




So that means it's possible for anyone to intentionally underestimate their income to at least lock in a lower deductible and lower max out of pocket and then come tax time, just pay the different in premiums. I must be misunderstanding something because that seems like a pretty big loophole.

If your underestimate is so ridiculous then when you apply for the health insurance through the exchange they are going to flag your application. Then you better have proof of that lowered income.

But how would they actually know if it's ridiculous underestimate? They could flag my application right from the start?

They don't know if I'd get a part time job or realize some capital gains sometime during the year. Do they investigate income from previous years?


DavidAnnArbor

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Re: What comes after the ACA?
« Reply #3822 on: October 27, 2017, 04:48:47 PM »
I'm hoping one of you ACA experts can help me out with a question. Perhaps I should post this under the "case study" section of this forum but thought i'd try here first.

My wife and I will likely FIRE in March 2018 (wife already called it quits in June). I'm trying to get a good feel for how ACA works. We'll be buying our insurance on the exchange when I leave my job. I'd like to keep my MAGI under $32400 next year. For a Silver level plan, this will keep our premium at $127 month, deductible around $1500 and max out of pocket $2900. The problem is, I have a taxable account of about 400k in a blend of cash, ETF's and a handful of stocks that pay a dividend. My MAGI could potentially go higher than $32400 due to increase in interest on my money market and/or more dividends than I anticipated.  If I go above $32400, the deductible increases to $4500 and max out of pocket will be $11700. 

When I file my 2018 tax returns and if my MAGI turns out to be over $32400, I know I'll owe money for premiums but what about the deductible? If we have healthcare expenses that exceed the $1500 deductible in 2018, will we have to pay those costs above the $1500 that the insurance picked up? (until I bump into the higher $4500 deductible)

I'm sure it's out there but I can't seem to find a definitive answer on this. Thanks for your help!
The CSR reduced deductible is not reconcilable like the PTC subsidies are at the end of the year. 




So that means it's possible for anyone to intentionally underestimate their income to at least lock in a lower deductible and lower max out of pocket and then come tax time, just pay the different in premiums. I must be misunderstanding something because that seems like a pretty big loophole.

If your underestimate is so ridiculous then when you apply for the health insurance through the exchange they are going to flag your application. Then you better have proof of that lowered income.

But how would they actually know if it's ridiculous underestimate? They could flag my application right from the start?

They don't know if I'd get a part time job or realize some capital gains sometime during the year. Do they investigate income from previous years?

yes they do

geekette

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Re: What comes after the ACA?
« Reply #3823 on: October 27, 2017, 05:12:36 PM »
You're supposed to report changes in income during the year.

Mrbeardedbigbucks

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Re: What comes after the ACA?
« Reply #3824 on: October 27, 2017, 05:59:15 PM »
You're supposed to report changes in income during the year.

If they don't reconcile the deductible like they do with the premiums tax credits then why would I want to report any changes? Do they hit you with a penalty or kick you off the exchange? What would be the consequence of not reporting changes to my income through out the year and just reporting my real income when i file my taxes?

If I leave my job in March and I expect my income to be about 32k for the year, we would get the $1500 deductible for 2018. When I file our taxes and our income actually turns out to be 40k, I would just pay some of the tax credits back but the whole year I was at a much lower deductible and lower max out of pocket.

I'm probably over simplifying this so bear with me.


DavidAnnArbor

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Re: What comes after the ACA?
« Reply #3825 on: October 27, 2017, 06:14:07 PM »
You're supposed to report changes in income during the year.

If they don't reconcile the deductible like they do with the premiums tax credits then why would I want to report any changes? Do they hit you with a penalty or kick you off the exchange? What would be the consequence of not reporting changes to my income through out the year and just reporting my real income when i file my taxes?

If I leave my job in March and I expect my income to be about 32k for the year, we would get the $1500 deductible for 2018. When I file our taxes and our income actually turns out to be 40k, I would just pay some of the tax credits back but the whole year I was at a much lower deductible and lower max out of pocket.

I'm probably over simplifying this so bear with me.

They're not going to claw back cost sharing reductions, only premium subsidies are affected.
But they will look at last year's AGI, and if you have a very different number on your application you have to explain it.

Mrbeardedbigbucks

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Re: What comes after the ACA?
« Reply #3826 on: October 27, 2017, 06:44:26 PM »
You're supposed to report changes in income during the year.

If they don't reconcile the deductible like they do with the premiums tax credits then why would I want to report any changes? Do they hit you with a penalty or kick you off the exchange? What would be the consequence of not reporting changes to my income through out the year and just reporting my real income when i file my taxes?

If I leave my job in March and I expect my income to be about 32k for the year, we would get the $1500 deductible for 2018. When I file our taxes and our income actually turns out to be 40k, I would just pay some of the tax credits back but the whole year I was at a much lower deductible and lower max out of pocket.

I'm probably over simplifying this so bear with me.

They're not going to claw back cost sharing reductions, only premium subsidies are affected.
But they will look at last year's AGI, and if you have a very different number on your application you have to explain it.

I will have a huge income discrepancy when I first apply next year, 150k in 2017 vs 32k in 2018. Hopefully early retirement will be a good enough explanation.

In future years (if there are future years for the ACA), if we're straddling the deductible cliff drop, we can just slightly underestimate our income to get the lower deductible.  Or maybe it's not that easy.

ixtap

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Re: What comes after the ACA?
« Reply #3827 on: October 27, 2017, 07:31:47 PM »
SO had an MRI.

He received the insurance adjusted bill and paid it.

A couple of weeks later he received a second bill, from.his doctor, but not really, it was from the facility where he had the MRI done, but for the doctor's time, but no insurance adjustment. He decided to ignore it. When he got the second one, I made him call. The two separate entities didn't share the insurance info and doctors didn't think this at all odd, evidently.

boarder42

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Re: What comes after the ACA?
« Reply #3828 on: October 28, 2017, 05:42:42 AM »
The calculator must have been off I just ran it again and our subsidy was much lower and closer to last year's prices for insurance.

chasesfish

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Re: What comes after the ACA?
« Reply #3829 on: October 28, 2017, 05:46:43 AM »
Is there anywhere that's published the best state rates for an unsubsidized plan?

If I pull the plug next year, I'm going to have to pay an unsubsidized rate for a year and a half before I can manage my income down.  My comp is front-loaded and its better to work 1-2 quarters into a new year.   We'll probably travel a bunch, so I'm trying to figure out if its worth domiciling myself in a low insurance-cost state.

Have to carry an exchange plan, going uninsured or with a health-share isn't an option, my spouse is at risk of recurrence of a health issue.

DavidAnnArbor

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Re: What comes after the ACA?
« Reply #3830 on: October 28, 2017, 07:06:33 AM »
Is there anywhere that's published the best state rates for an unsubsidized plan?

If I pull the plug next year, I'm going to have to pay an unsubsidized rate for a year and a half before I can manage my income down.  My comp is front-loaded and its better to work 1-2 quarters into a new year.   We'll probably travel a bunch, so I'm trying to figure out if its worth domiciling myself in a low insurance-cost state.

Have to carry an exchange plan, going uninsured or with a health-share isn't an option, my spouse is at risk of recurrence of a health issue.

Definitely look at the off-exchange plans.

talltexan

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Re: What comes after the ACA?
« Reply #3831 on: November 01, 2017, 11:29:22 AM »
I'm not sure if the American system of government really works for modern America. Or anywhere else, to be honest. Most countries that apply American-style constitutional democracy seem to collapse into endless bickering, gridlock and corruption pretty quickly. No, what you need is the swift, authoritative action of a parliamentary system, preferably under the oversight of a divinely-appointed monar- *is dragged off and dumped in Boston harbour*


And good riddance to you, sir! Haha.

Shush dont tell anyone but I am a bit of a monarchist myself. Bring back the Stuarts!

Virescit Vulnere Virtus!
 

House of Hanover, Byotches!

DavidAnnArbor

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Re: What comes after the ACA?
« Reply #3832 on: November 01, 2017, 02:34:56 PM »
Somehow my health insurance bill is going from $110 a month to only $25 a month due to the drastic increase in premium subsidies because of the spike in costs for a silver plan. I have a bronze plan.

sol

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Re: What comes after the ACA?
« Reply #3833 on: November 01, 2017, 02:48:10 PM »
Somehow my health insurance bill is going from $110 a month to only $25 a month due to the drastic increase in premium subsidies because of the spike in costs for a silver plan. I have a bronze plan.

As long as your income is under 400% of the federal poverty level, your subsidy went up dramatically because it is tied to the cost of a silver plan that got much more expensive this year.  Your insurance costs more this year, but uncle Sam is picking up a bigger share of the tab, so the cost to you is lower.

It's really only the people above 400% ego are getting screwed by this.  Interestingly, they are the demographic who hated Obamacare the most in the first place, and will now hate it more as a result of Trump's brinkmanship, so I'm not sure if they'll blame Obama or Trump for their shitty situation.


bacchi

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Re: What comes after the ACA?
« Reply #3834 on: November 01, 2017, 02:58:34 PM »
Somehow my health insurance bill is going from $110 a month to only $25 a month due to the drastic increase in premium subsidies because of the spike in costs for a silver plan. I have a bronze plan.

As long as your income is under 400% of the federal poverty level, your subsidy went up dramatically because it is tied to the cost of a silver plan that got much more expensive this year.  Your insurance costs more this year, but uncle Sam is picking up a bigger share of the tab, so the cost to you is lower.

It's really only the people above 400% ego are getting screwed by this.  Interestingly, they are the demographic who hated Obamacare the most in the first place, and will now hate it more as a result of Trump's brinkmanship, so I'm not sure if they'll blame Obama or Trump for their shitty situation.

My non-subsidy bronze plan is going up by $10/month but it now covers a lot more providers, including my primary care physician. Given that I was paying out-of-pocket for an annual, it'll save me money. Thanks, Obama!

nereo

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Re: What comes after the ACA?
« Reply #3835 on: November 01, 2017, 03:05:08 PM »
Somehow my health insurance bill is going from $110 a month to only $25 a month due to the drastic increase in premium subsidies because of the spike in costs for a silver plan. I have a bronze plan.

As long as your income is under 400% of the federal poverty level, your subsidy went up dramatically because it is tied to the cost of a silver plan that got much more expensive this year.  Your insurance costs more this year, but uncle Sam is picking up a bigger share of the tab, so the cost to you is lower.

It's really only the people above 400% ego are getting screwed by this.  Interestingly, they are the demographic who hated Obamacare the most in the first place, and will now hate it more as a result of Trump's brinkmanship, so I'm not sure if they'll blame Obama or Trump for their shitty situation.

Seriously?  You can't guess which person this demographic who already hated Obamacare (often for false or inarticulate reasons) is going to blame for their increasing premiums?  Sure, us here on this thread know why premiums are now changing, but I'm pretty certain who that demographic already blames, and it ain't a white guy.

Exflyboy

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Re: What comes after the ACA?
« Reply #3836 on: November 01, 2017, 04:32:14 PM »
We just signed up and (setting our income to $32,000 ($17k rent, $12k after tax dividends + $3k slush) we get to pay $15/month for the same Bronze plan we had before.

We have roughly 2 years of spending in cash so no need to dispose of any after tax assets at this point.


mousebandit

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Re: What comes after the ACA?
« Reply #3837 on: November 01, 2017, 08:34:50 PM »
Exflyboy, is there a site you can use to preview Oregon plans with alternate income levels, or do you have to go through the whole application thing at healthcare .gov? IIRC, that was a pain for comparing different income levels. 

Paul der Krake

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Re: What comes after the ACA?
« Reply #3838 on: November 01, 2017, 08:46:19 PM »
Exflyboy, is there a site you can use to preview Oregon plans with alternate income levels, or do you have to go through the whole application thing at healthcare .gov? IIRC, that was a pain for comparing different income levels. 
You don't have to do an application. Use the link below to preview plans, and you can keep adjusting your income.

https://www.healthcare.gov/see-plans/

Exflyboy

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Re: What comes after the ACA?
« Reply #3839 on: November 01, 2017, 11:16:27 PM »
As Paul said.. its easy to check.

In a way I feel guilty for taking a subsidy. I mean without a mortgage and a couple of years of cash, our "income" can be virtually non existent. Heck after taking out depreciation and some expenses our rental income can be around $15k plus $12k for after tax divs.. less $7750 for an HSA and we'd be in Medicaid!

The again, why on Earth did they write the ACA based purely on income?

Come to think of it.. $30k/year is about what we spend anyway so in theory we could play this game of not selling assets for a very long time.

"I see RMD people!"

boarder42

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Re: What comes after the ACA?
« Reply #3840 on: November 02, 2017, 05:52:35 AM »
As Paul said.. its easy to check.

In a way I feel guilty for taking a subsidy. I mean without a mortgage and a couple of years of cash, our "income" can be virtually non existent. Heck after taking out depreciation and some expenses our rental income can be around $15k plus $12k for after tax divs.. less $7750 for an HSA and we'd be in Medicaid!

The again, why on Earth did they write the ACA based purely on income?

Come to think of it.. $30k/year is about what we spend anyway so in theory we could play this game of not selling assets for a very long time.

"I see RMD people!"

Dont even start the talk of tapping total assets to determine pay for insurance.  this starts to open the door for talk of tapping total assets for basis of tax.  The govt already has a retirement problem in that no one has money.  we cant start discouraging saving by taxing those who choose to keep their money vs spend it all.

talltexan

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Re: What comes after the ACA?
« Reply #3841 on: November 03, 2017, 11:18:43 AM »
I haven't seen it mentioned here:

The tax reform plan that's being discussed right now in Cogress (and perhaps in other threads of this community) will probably include a repeal of the ACA mandate. Part of a stealth-/synthetic-repeal.

boarder42

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Re: What comes after the ACA?
« Reply #3842 on: November 03, 2017, 11:30:20 AM »
I haven't seen it mentioned here:

The tax reform plan that's being discussed right now in Cogress (and perhaps in other threads of this community) will probably include a repeal of the ACA mandate. Part of a stealth-/synthetic-repeal.

it doesnt currently and congress/the white house has intentionally kept the health care issues out of this so as not to change what the bill is supposed to be about.

jim555

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Re: What comes after the ACA?
« Reply #3843 on: November 03, 2017, 11:45:35 AM »
Free Bronzes, thanks Donnie.

"New analysis from Avalere finds that nearly 98% of counties with exchanges operated by HealthCare.gov will have free bronze plan options for low-income consumers aged 50 earning 150% of poverty or less ($18,090 for an individual or $36,900 for a family of four)."

http://avalere.com/expertise/managed-care/insights/most-counties-will-have-free-2018-exchange-plans-for-low-income-enrollees

OurTown

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Re: What comes after the ACA?
« Reply #3844 on: November 03, 2017, 12:46:45 PM »
Unintended consequences can go both ways apparently.

Exflyboy

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Re: What comes after the ACA?
« Reply #3845 on: November 03, 2017, 12:49:21 PM »
I'm not complaining, especially as we are "poor" only "earning" 200% FPL.

Go Trump!

DavidAnnArbor

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Re: What comes after the ACA?
« Reply #3846 on: November 03, 2017, 01:22:21 PM »
I haven't seen it mentioned here:

The tax reform plan that's being discussed right now in Cogress (and perhaps in other threads of this community) will probably include a repeal of the ACA mandate. Part of a stealth-/synthetic-repeal.

it doesnt currently and congress/the white house has intentionally kept the health care issues out of this so as not to change what the bill is supposed to be about.

I hope you're right Boarder. Sounds scary.

waltworks

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Re: What comes after the ACA?
« Reply #3847 on: November 03, 2017, 05:37:52 PM »
Indeed, our bronze plan is going from $285/mo to ... $0.38.

What a world.

-W

keyvaluepair

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Re: What comes after the ACA?
« Reply #3848 on: November 06, 2017, 07:15:11 AM »
Our family (myself, my wife and our 7 year old) are about to sign up for the ACA. We want to make sure that we don't get moved into the Medicaid category since the plans there don't cover the doctors we want. We estimate that we need between $60-70K of expenses yearly (max), and that we can generate that from our investments at a 3% rate. Here are my questions:

(1) Since I want to avoid medicaid and still get federal premium tax credits, what kind of projected AGI should I be putting down?
(2) What is the formula that the IRS uses to calculate the ranges of AGI within which you are not eligible for Medicaid but eligible for the tax credit?

jim555

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Re: What comes after the ACA?
« Reply #3849 on: November 06, 2017, 07:49:32 AM »
Our family (myself, my wife and our 7 year old) are about to sign up for the ACA. We want to make sure that we don't get moved into the Medicaid category since the plans there don't cover the doctors we want. We estimate that we need between $60-70K of expenses yearly (max), and that we can generate that from our investments at a 3% rate. Here are my questions:

(1) Since I want to avoid medicaid and still get federal premium tax credits, what kind of projected AGI should I be putting down?
(2) What is the formula that the IRS uses to calculate the ranges of AGI within which you are not eligible for Medicaid but eligible for the tax credit?
Family of 3 around $28,180.  But children fall into CHIP (children's medicaid) which has a higher number.