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Old 10-04-2014, 10:26 AM   #61
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People who get healthcare insurance throughout their employer receive more subsidies (compared with ACA) and have been for decades, while ACA based subsidies only began this year. The biggest subsides go to the employees with the most costly health benefits, who tend to be senior executives and among the wealthiest people in the US.
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Old 10-04-2014, 11:13 AM   #62
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People who get healthcare insurance throughout their employer receive more subsidies (compared with ACA) and have been for decades, while ACA based subsidies only began this year. The biggest subsides go to the employees with the most costly health benefits, who tend to be senior executives and among the wealthiest people in the US.
I did the rough math on this for my specific case. 2013 was my last full year of work. Since we could use pretax dollars to buy health, dental, vision, HSA, FSA, and I was in the 28% tax bracket that year, I had a health care related subsidy of approximately $11,000 X .28 = $3080.

My company claimed to pay for 60% of my health plan and they made an $800 contribution to my HSA. Since they were in the 35% corporate tax bracket this means they got a tax break of about $1800. Because the payments to me, or for me, were expenses that reduced revenue.

The government has always used tax breaks to affect the behavior of various tax paying entities. Should the taxpayer subsidize; health care, home purchases, retirement savings, buying an electric car, installing energy efficient items in your house? Everyone of these items has characteristics that benefit some more than others. I just play the hand I am dealt.
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Old 10-04-2014, 11:43 AM   #63
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It does me too. I can't imagine retiring early if it depended on me getting government subsidies. I'd work OMY or two or three until I could afford it.
Many ER types won't necessarily be depending on the subsidies to enable ER, but if since it is offered, they'd be stupid not to take it. This isn't charity provided by well-meaning individuals (in which case it would be immoral to take assistance trhat wasn't needed), it is a government program funded by forcibly taking money from some people and giving it to others. They >want< people to take the money, those who would refuse to do so are thwarting the design and implementation of this whole effort.

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Maybe I'm stuck in another era, but I still think that anyone who chooses early retirement as a lifestyle choice shouldn't be getting subsidies.
It's useful to break this down a bit: Do you mean" "The rules should not allow people who have saved up money and who have voluntarily stopped working to get subsidies" or do you mean "Those who choose to ER and who qualify for subsidies shouldn't take them" ?

As a practical matter, the best way for you to change things, if you qualify for the subsidies, is to take them and then tell all your friends how you are using government money to ER and fund extravagant trips and goodies. There's no faster way to build popular pressure for changing the rules. But be careful what you wish for: wealth-based transfer payments and taxes (as opposed to income-based ones) discourage individuals from providing for themselves and they are highly destructive in other ways.
And as donheff said--in the big picture, there just won't be too many "rich" folks getting subsidies anyway, and "catching" them would involve a lot of collateral damage. It's probably more useful to worry about something else.
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Old 10-04-2014, 11:58 AM   #64
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My comment was also pointing out that there are plenty of other "unfair" examples in our government and the way it transfers wealth.
Ah, the "since something else is unfair too that justifies this" argument. I disagree but guess your entitled to your opinion.

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Look at the healthcare systems in France and Germany, which are both private/public partnerships. They have their drawbacks but they are providing similar and in many ways better care at much less cost than ours.
How are they providing better care at much less cost?

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I like that little bit of socialism ...
Although I would disagree with you vehemently about the degree, I give you a lot of credit for calling it what it is.

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Sure, poor folks need a leg up, I get that.

But the vast majority of folks here are not in poverty.

The OP mentioned "It strikes me as a bit odd that you can actually have a substantial amount of money and still get hefty Obamacare subsides."

It does me too. I can't imagine retiring early if it depended on me getting government subsidies. I'd work OMY or two or three until I could afford it.

Maybe I'm stuck in another era, but I still think that anyone who chooses early retirement as a lifestyle choice shouldn't be getting subsidies.
Agreed 100%.

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.... you can't arrange finances to get a subsidy yourself, I feel sorry for you.
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Everyone of these items has characteristics that benefit some more than others. I just play the hand I am dealt.
Again, I recognize that I'm a loser in this whole deal. I never made more than $100k a year, saved and invested and now have a dividend and small pension income that puts me slightly over the subsidy level and I cannot arrange my finances to reduce my income without incurring significant capital gains by selling positions I would prefer to keep. Maybe if I were in a position to have a big portfolio and still get a big subsidy I would feel differently.

I'll go away now.
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Old 10-04-2014, 11:59 AM   #65
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I have much too high a taxable income to qualify for a subsidy and get my insurance from a retirement plan anyway but I strongly support the subsidy concept and would prefer a single payer system like Medicare for all (with a good faith bipartisan effort to implement improvements). I also understand that I have been and am currently paying a lot more in than I get out since I am in very good health and have a relatively large income. But I also recognize that good health is a bit of a crap shoot and I could be wiped out in a skipped heartbeat if I was responsible for all my costs. I like that little bit of socialism that takes a huge chunk of financial uncertainty out of the equation.
+3. I do qualify for a subsidy although it is not a big one (under $100 per month). Even without the subsidy I'd be quite happy with the Silver plan I signed up for. Before the ACA came into effect, I was paying twice as much (around $700 per month) for an individual plan because here in NY the individual market is brutal. I downgraded, temporarily, to a meager hospital-only plan for 2 years until the ACA kicked in.

When I look at subsidies, I look at the bigger picture. Being childfree, I subsidize the local schools with my school taxes even though I don't use them. So for me it is fine to get something back from a different level of government to mostly even things out.
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Old 10-04-2014, 12:32 PM   #66
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The big deal for me was getting rid of the 'preexisting conditions' riders. I have genetic predispositions towards certain cancers and essential hypertension, and in spite of many years of effort (sunscreens and UV blocking clothing for skin cancer, careful diet management, weight loss and maintenance, consistent exercise, etc. to the point that DW sometimes questions my sanity), the cancers and prehypertension warning signs are all there.

Without the ACA, I'd either have to work until I could get Medicare, retire with no insurance, or with coverage tied to a stack of riders waiving coverage for pretty much everything major that hits an older man. The ACA lets me have insurance, and retire.

For those worried about my destroying America with my ways, there is some good news. Men in my family are dead before age 70 going back as far as we can find in our family tree, so I won't be mooching and looting your Medicare taxes for more than a few years.
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Old 10-04-2014, 12:56 PM   #67
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I'll go away now.
Please don't. A forum is most useful when opinions and experiences differ. If everyone agrees, a good part of the forums value is lost.
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Old 10-04-2014, 01:16 PM   #68
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...I'll go away now.
Have a nice long ride on your high horse.
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Old 10-04-2014, 01:23 PM   #69
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The ACA has also been a boon to entrepreneurial types. I got tired of the megacorp world and all its BS long before I was anywhere near FI. Fortunately, DW always worked "easy" jobs at smaller companies but that had good HI. This allowed me to jump out of the rat race and do my own thing.

But DW really is a work-for-yourself type too and the ACA has enabled her to make that leap, too. Now we are fortunate to have done away with at least half the crap we couldn't stand in regular jobs and working until we hit our final number isn't nearly so much of a burden. Society has benefited too -- we've created jobs and pay more taxes than if we had stayed on a traditional track working for megacorp.
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Old 10-04-2014, 01:33 PM   #70
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How are they providing better care at much less cost?
Here is a recent article that discusses the US health system vs other wealthy nations. Basically the US is the most expensive per capita, and at the same time has the worst ranking.

Mirror, Mirror on the Wall, 2014 Update: How the U.S. Health Care System Compares Internationally - The Commonwealth Fund

But, I would use the UK as an example to pattern after instead of France or Germany. The UK has the second lowest cost per capita, people almost as unhealthy as in the US and yet manages to crush everyone else in the overall ranking.
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Old 10-04-2014, 01:48 PM   #71
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I retired with my budget allowing for full premiums.
I will probably qualify for subsidies next year. Like any tax break - I'm not going to turn it down if I qualify. I didn't retire counting on the subsidies. I did retire counting on the pre-existing condition changes. Both my husband and myself have things that would make medical insurance hard to get. Not expensive conditions... but nonetheless falling in the pre-existing condition arena.

For those that oppose ERs taking subsidies... Do you also object to folks with mortgages taking the interest deductions? Do you oppose parents with minor children claiming their kids? Do you oppose other tax deductions and credits? The subsidies are basically tax credits similar to other deductions or credits.

The law is written the way it is. I budgeted for the full, unsubsidized premiums, but there is no way I'd leave money on the table if I qualify for the tax break. I plan to take the credit. (And also claim my kids, and any other tax credit I legitimately qualify for.)
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Old 10-04-2014, 01:50 PM   #72
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Please don't. A forum is most useful when opinions and experiences differ. If everyone agrees, a good part of the forums value is lost.
Very kind of you. I meant away from the thread, not the forum. But apperantly not everyone agrees with that concept....

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Have a nice long ride on your high horse.
Really? I posted something that deserved this?
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Old 10-04-2014, 01:53 PM   #73
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. . . and now have a dividend and small pension income that puts me slightly over the subsidy level and I cannot arrange my finances to reduce my income without incurring significant capital gains by selling positions I would prefer to keep.
Do take a close look at your situation. If you are only "slightly over the subsidy level", realize that the "cliff" for subsidies is very steep--just reducing your OMAGI enough to squeak under the line can result in thousands of dollars in subsidies. The cap gains taxes you'd suffer would presumably be 1) at least lower than your earned income tax rate, 2) taxes you're only deferring until later anyway, it may be best to pay them now to qualify for the subsidies while you can get them (and, it's very possible tax rates may be higher in the future anyway)and 3) smaller than the subsidies, if you are close to the line.

Sure, it's a game. But if you don't extract all the money possible from this system while you can they'll just find something else to waste it on. Who do you trust to make better use of these funds?
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Old 10-04-2014, 01:56 PM   #74
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Please don't. A forum is most useful when opinions and experiences differ. If everyone agrees, a good part of the forums value is lost.
FWIW, That's why I post.

I may annoy a few folks, but I try to be civil.
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Old 10-04-2014, 02:16 PM   #75
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I retired with my budget allowing for full premiums.
I will probably qualify for subsidies next year. Like any tax break - I'm not going to turn it down if I qualify. I didn't retire counting on the subsidies. I did retire counting on the pre-existing condition changes.
+1000. This is exactly my situation except that I have a fallback if the pre-existing condition changes revert (move to Canada).


I was curious about the size of various tax subsidies and I found the attached table at http://economix.blogs.nytimes.com/20...eaks-a-primer/. I've personally taken advantage of 1,2,3,4,7, and 10. I will take advantage of 6 eventually as I start retirement withdrawals.

I couldn't find a table that include the ACA subsidies but this site ('Hidden' tax deductions cost as much as subsidies for Obamacare) suggests that it's in the order of $100 billion. So it's sizeable but not really much different than the other breaks.

Playing with the calculators on the exchange sites, I'm pretty sure that any subsidy I get is going to be dwarfed by the other tax breaks I've received.
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Old 10-04-2014, 02:59 PM   #76
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....The OP mentioned "It strikes me as a bit odd that you can actually have a substantial amount of money and still get hefty Obamacare subsides."

It does me too. I can't imagine retiring early if it depended on me getting government subsidies. I'd work OMY or two or three until I could afford it.

Maybe I'm stuck in another era, but I still think that anyone who chooses early retirement as a lifestyle choice shouldn't be getting subsidies.
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I understand your view and debated that myself but disagree with you. You're sitting pretty high in the horse there....

I am prioritizing Roth conversions over Obamacare subsidies so our income will be too high for subsidies. While I concede it is stupid that subsidies are based on income rather than assets that is the way Congress designed it. We could have received subsidies had we structured our income correctly, considered it and decided Roth conversions were preferable. It is well established that citizens are entitled to structure their financial affairs as to minimize taxes and IMO the same principle applies to maximizing benefits. To me, it is no different from adopting a SS claiming strategy to maximize the SS benefits a couple is entitled to or tax efficient placement of your portfolio to minimize income taxes.

Besides, in most cases, if someone has saved enough to retire early, it is likely that they have paid lots of income taxes during their higher earning years and if they end up eligible for health insurance subsidies it is just evening the score a little IMO.
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The view's good up here
Your response to mpeirce's post way above
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....Agreed 100%.

I'll go away now.
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Have a nice long ride on your high horse.
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...Really? I posted something that deserved this?
If you had read the thread you'll see I posted the same response to mpeirce's post way above and you agreed 100% so I treated you similarly - after all, I would not want to discriminate. The difference is that mpeirce understood my intent was to give him a good-natured ribbing and you took offence.
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Old 10-04-2014, 03:43 PM   #77
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The difference is that mpeirce understood my intent was to give him a good-natured ribbing and you took offence.
Clearly the difference being the that mpeirce's comments got that mine didn't.
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Old 10-04-2014, 03:47 PM   #78
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Clearly the difference being the that mpeirce's comments got that mine didn't.....
I concede your point but thought you would have caught it in the earlier post. Sorry.
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Old 10-04-2014, 03:50 PM   #79
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I concede your point but thought you would have caught it in the earlier post. Sorry.
And I apologize for my misinterpretation and the balance of my post that I have since deleted. You made a sincere effort to provide me with helpful information earlier (the catastrophic plan option) and I am appreciative.
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Old 10-04-2014, 06:50 PM   #80
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