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Old 03-24-2014, 07:00 AM   #81
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Keep in mind the largest tax subsidy in the US is paid to employers for the health care deduction, which is much greater than the subsidy paid on the exchanges. In addition, individuals using the exchange, not receiving subsidy and who itemize taxes just saw the deduction for medical expenses decline.
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Old 03-24-2014, 07:58 AM   #82
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I just finished reading all the posts here, but I wasn't quite able to figure out the consensus. Did we agree that if a person voluntarily leaves a job and retires early because s/he is "Financially Independent", then the taxpayers should pay 50%-60%-70%-80% of the health insurance premiums for that person if s/he can live off of assets and avoid declaring too much current income? I know the current law reads that way, but did we decide that we like it that way? I'll soon be faced with the decision about whether to take this subsidy, while holding assets of almost $5M. It doesn't seem right to me that I should qualify for a government subsidy of over 1/2 of my HI premiums when I am in the top few percent in terms of wealth.
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Old 03-24-2014, 08:34 AM   #83
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Originally Posted by scrinch View Post
I just finished reading all the posts here, but I wasn't quite able to figure out the consensus. Did we agree that if a person voluntarily leaves a job and retires early because s/he is "Financially Independent", then the taxpayers should pay 50%-60%-70%-80% of the health insurance premiums for that person if s/he can live off of assets and avoid declaring too much current income? I know the current law reads that way, but did we decide that we like it that way? I'll soon be faced with the decision about whether to take this subsidy, while holding assets of almost $5M. It doesn't seem right to me that I should qualify for a government subsidy of over 1/2 of my HI premiums when I am in the top few percent in terms of wealth.
It is what it is. This is similar to the question of whether I should have voluntarily given money back to the Treasury because I was opposed to the Bush tax cuts when DW and I were earning mega-bucks. To me the answer was no since doing so did not make a systemic change to the system which is what I believed would help. My recommendation is that, if you feel your subsidy is unjust, use the extra money for some targeted charity that achieves goals you approve of.

On the general question of subsidies, I am torn. It seems like it would have been (and certainly currently would be) impossible to get enough consensus to end deductions for employer HI, let alone do away with the employer based HI concept in general. The proposal to extend deductions for individual (non-work linked) HI payments has merit but is problematic for low income people. For them a subsidy works better since it reduces premiums immediately rather than reimbursing them at the end of the year or involving a hard to compute change in W2 withholding thus the subsidy makes it more likely they would be able to afford to get the HI in the first place. Maybe an alternative (good luck getting anyone to negotiate on this) would be to make all HI deductible (above the line) but reduce the deduction dollar for dollar by any subsidy the filer got.
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Old 03-24-2014, 09:05 AM   #84
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...It appears both Sebelius & industry exec's agree HI premiums will be higher next year, though there is disagreement on how much....
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Weren't health care premiums going up every year, faster than inflation, prior to the ACA?
Yes dlds, they were. In the two years since retiring that I have had an individual HI plan, my premiums went up 13% from 2012-2013 and 9% from 2013-2014. And my group plan contributions had increased dramatically each of three years prior to my retiring.

Which is why any prediction that HI premiums will be higher next year is a perceptive glimpse of the obvious and in some cases just more fear-mongering by the anti-ACA crowd.
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Old 03-24-2014, 09:09 AM   #85
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Yes dlds, they were. In the two years since retiring that I have had an individual HI plan, my premiums went up 13% from 2012-2013 and 9% from 2013-2014. And my group plan contributions had increased dramatically each of three years prior to my retiring.

Which is why any prediction that HI premiums will be higher next year is a perceptive glimpse of the obvious and in some cases just more fear-mongering by the anti-ACA crowd.
Premiums rising faster than eight years before Obamacare | The Daily Caller


Health insurance premiums have risen more after Obamacare than the average premium increases over the eight years before it became law, according to the private health exchange eHealthInsurance.

The individual market for health insurance has seen premiums rise by 39 percent since February 2013, eHealth reports. Without a subsidy, the average individual premium is now $274 a month. Families have been hit even harder with an average increase of 56 percent over the same period average premiums are now $663 per family, over $426 last year.

Between 2005 and 2013, average premiums for individual plans increased 37 percent and average family premiums were upped 31 percent. So they have risen faster under Obamacare than in the previous eight years.

Mike
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Old 03-24-2014, 09:11 AM   #86
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Originally Posted by scrinch View Post
I just finished reading all the posts here, but I wasn't quite able to figure out the consensus. Did we agree that if a person voluntarily leaves a job and retires early because s/he is "Financially Independent", then the taxpayers should pay 50%-60%-70%-80% of the health insurance premiums for that person if s/he can live off of assets and avoid declaring too much current income? I know the current law reads that way, but did we decide that we like it that way? I'll soon be faced with the decision about whether to take this subsidy, while holding assets of almost $5M. It doesn't seem right to me that I should qualify for a government subsidy of over 1/2 of my HI premiums when I am in the top few percent in terms of wealth.
While I think many here would concede that it is a silly result that someone with $5m in assets would qualify for a subsidy, the fact is that Congress designs these programs based on income rather than wealth. IMO it is because to design these programs based on a combination of income and/or wealth would make them even more hopelessly complex. We have had other threads debate the morality of "taking advantage" of such benefits. I know in my case I paid mucho taxes (much more than average) during my earning years so if there are legal loopholes that benefit me I'm not losing too much sleep about taking them. That said, I am not taking the subsidy as I have concluded that Roth conversions up to the top of the 15% tax bracket are more beneficial to me than limiting my income to get a subsidy benefit.
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Old 03-24-2014, 09:17 AM   #87
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Premiums rising faster than eight years before Obamacare | The Daily Caller


Health insurance premiums have risen more after Obamacare than the average premium increases over the eight years before it became law, according to the private health exchange eHealthInsurance.

The individual market for health insurance has seen premiums rise by 39 percent since February 2013, eHealth reports. Without a subsidy, the average individual premium is now $274 a month. Families have been hit even harder with an average increase of 56 percent over the same period average premiums are now $663 per family, over $426 last year.

Between 2005 and 2013, average premiums for individual plans increased 37 percent and average family premiums were upped 31 percent. So they have risen faster under Obamacare than in the previous eight years.

Mike
That data is very different from my personal experience. My 9% increase from 2013 to 2014 was the least of the last 5 years (1 year private HI and 4 years group HI). But in any event , the debate was future increases (2015 and beyond) not 2014 compared to previous years.
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Old 03-24-2014, 10:05 AM   #88
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I just finished reading all the posts here, but I wasn't quite able to figure out the consensus. Did we agree that if a person voluntarily leaves a job and retires early because s/he is "Financially Independent", then the taxpayers should pay 50%-60%-70%-80% of the health insurance premiums for that person if s/he can live off of assets and avoid declaring too much current income? I know the current law reads that way, but did we decide that we like it that way? I'll soon be faced with the decision about whether to take this subsidy, while holding assets of almost $5M. It doesn't seem right to me that I should qualify for a government subsidy of over 1/2 of my HI premiums when I am in the top few percent in terms of wealth.
The ACA is a tax credit. Do you take other legal tax credits or deductions? Home mortgage interest? Personal exemptions? 401K deductions? The zero tax bracket on capital gains? Would you feel bad having municipal bond interest? How many people in the U.S. benefit from that tax break?

If you look at the average savings across America, how many people really benefit greatly from 401K deductions? Or the difference in mortgage interest deductions if you have a $600K house versus an $80K house? Would you feel guilty having a nicer house and getting a bigger mortgage interest deduction than the average person?

I know for the last decade or so we paid more in income and SS taxes than the median U.S. household makes in a year. I never complained about that and have always voted in in favor of candidates and propositions (CA) to raise taxes to fund social programs. I am also not going to complain now. For our family with still dependent kids even with the ACA I still budget around $9K a year for dental and medical costs for premiums, co-pays and deductibles. Pre ACA our medical costs were $50K (COBRA conversion policy, premiums, co-pays, deductibles, out of network, etc.) last year due mainly to a single surgery. Few people could ever ER, start a mom and pop business or even work part time with those kind of costs, which adds to the unemployment rate.
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Old 03-24-2014, 10:27 AM   #89
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