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Fun with Federal poverty levels.
Old 01-26-2015, 08:15 PM   #1
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Fun with Federal poverty levels.

It really is obscene, but even though I have substantial assets I just qualified for Medicaid because my net income from rent and dividends is around $12k/year. I was applying for an ACA plan, but according to the rules I get Medicaid. In 18 months I'll be 55 and able to start my pension and pay $100/month for ex-employer health insurance. I now realize that if I defer the pension and keep spending carefully from my after tax accounts to keep my income low I can continue on Medicaid and save myself $1200/year in insurance premiums.........so because I've got plenty of money, but little income I can keep the Medicaid........this really is a case of the 99% getting ripped off by the 1%.
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Old 01-26-2015, 08:26 PM   #2
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this really is a case of the 99% getting ripped off by the 1%.
It's not "the 1%" who designed that law, so I'm not sure why we'd accuse "them" (or you, in this case) of ripping anyone off. Anyway, enjoy the savings.
Be sure to check on the availability of care in your area for those insured under Medicaid. Being covered under insurance and being able to get good, timely health care are not at all the same thing. There are lots of people in your situation who deliberately increase their earnings to be above the Medicaid cutoff but low enough to qualify for the very generous subsidies (both premium subsidies and cost-sharing subsidies). They do this because they find the availability of health care to be a lot better for a fairly small additional expense (out of their pocket, anyway. Nobody knows what the true costs are anymore).
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Old 01-26-2015, 08:36 PM   #3
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Well, the alternative is a verification of assets, and that gets tricky. So let's see what a $40,000 COLA pension at age 55 (probably not a rarity in the public sector) is worth on the open market. I'll be a lot of those people would argue that they are not the '1%'. And some people will hide assets.

I know it doesn't feel right, but I bet the tests for compliance would cost more than the few millionaires who are able to keep their taxable income at those levels.

I'm not familiar with the details, but I thought some here were trying to make sure they were above Medicaid levels, but low enough to get some subsidies. There may be some negatives to going Medicaid (some doctors may not be too interested in your business). You could probably do a Roth conversion to increase taxable income?

edit( I see I cross posted with samclem)

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Old 01-26-2015, 08:50 PM   #4
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It was a political decision to go with the income test alone. They determined that the number of rich people with minimal income was minuscule in the grand scheme of things. The complexity of resource tests would create an enforcement nightmare that would discourage people from signing up.

Now if they could just get rid of estate recovery! I read that after estate recovery they only recoup 0.8% of nursing home expenditures. So it is basically a useless pain for no good reason.
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Old 01-26-2015, 09:04 PM   #5
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But of course the modern state enjoys harassing upper middle class people; it's what they do best.
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Old 01-26-2015, 09:39 PM   #6
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FYI, you can convert 401k or traditional IRA assets to Roths if you need to create income to get just above the 100% or 133% FPL to qualify for heavy subsidies for a regular health insurance plan.

We're planning on doing exactly that.

I figure by the time I'm 70.5, I'll start handing back some serious dough through RMDs, even with my Roth IRA conversion plans.
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Old 01-26-2015, 10:47 PM   #7
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Well, the alternative is a verification of assets, and that gets tricky. So let's see what a $40,000 COLA pension at age 55 (probably not a rarity in the public sector) is worth on the open market. I'll be a lot of those people would argue that they are not the '1%'. And some people will hide assets.

I know it doesn't feel right, but I bet the tests for compliance would cost more than the few millionaires who are able to keep their taxable income at those levels.

I'm not familiar with the details, but I thought some here were trying to make sure they were above Medicaid levels, but low enough to get some subsidies. There may be some negatives to going Medicaid (some doctors may not be too interested in your business). You could probably do a Roth conversion to increase taxable income?

edit( I see I cross posted with samclem)

-ERD50
In another thread I mentioned that I have the same PCP on Medicare as on my previous Cadillac health plan. My insurer is the same one that I would have chosen if I had qualified for ACA and the in network Hospitals are the same. I do get better out of state coverage on my Cadillac plan though. My point is that I could easily keep spending and qualifying for Medicare under the current rules......my tax bill would also be basically zero as well.
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Old 01-27-2015, 01:23 AM   #8
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It was a political decision to go with the income test alone. They determined that the number of rich people with minimal income was minuscule in the grand scheme of things. The complexity of resource tests would create an enforcement nightmare that would discourage people from signing up.
On a similar subject, in recent years, many states have eliminated the asset test for food stamps. I was really surprised when I discovered that, as I had always thought of food stamp benefits as being intended only for people with little or no savings. In other words, people who might well not have enough money to eat properly were it not for SNAP.

I thought that perhaps the reason for eliminating the asset test for food stamps was because politicians (for whatever reason) were looking for a way to increase the subsidies to food producers and distributors, and getting rid of the resource test was thought of as a possible way to achieve this. Thinking of it now though, jim584672's reason probably applies here too - that the cost and complexity of enforcing the asset test simply wasn't thought to be worth it.

The last time I mentioned food stamps in this forum, the thread was closed down. It's not my intention to introduce dischord; I realize that it's a controversial subject for some. It's just that I found it interesting that it would be possible to be a millionaire, with half your portfolio in tax-sheltered, and the other half in taxable accounts, for instance, and you could legitimately qualify for food stamps.

The following is a map of the states that have eliminated the asset test for SNAP. Personally, I'm just looking forward to hitting 65, when the senior citizen discounts will really kick in

http://frac.org/newsite/wp-content/u...asset_test.pdf
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Old 01-27-2015, 05:34 AM   #9
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In another thread I mentioned that I have the same PCP on Medicare as on my previous Cadillac health plan. My insurer is the same one that I would have chosen if I had qualified for ACA and the in network Hospitals are the same. I do get better out of state coverage on my Cadillac plan though. My point is that I could easily keep spending and qualifying for Medicare under the current rules......my tax bill would also be basically zero as well.
All my doctors from my Megacorp plan are in the Medicaid Managed Care plan in my state. So once my income drops time to apply for it. The good thing about a retiree plan is that you can basically make as much money as you want without loosing your health coverage. Then you only have to worry about plain old taxes.
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Old 01-27-2015, 06:18 AM   #10
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In principle, I agree that assets tests make sense in order to target benefits to those who need them most. In practice, however, asset tests are really cumbersome and expensive to manage for administrators and intrusive for benefits recipients. Often asset test have lots of rules around exemptions for principal residences, cars, tools for tradespeople, education savings, retirement savings, special provisions for people with disabilities.... Income tests, on the other hand, can often be administered just through tax returns or pay stubs. The principle is good, but for the sake of efficiency, it often makes sense to do without them.
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Old 01-27-2015, 11:15 AM   #11
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.......this really is a case of the 99% getting ripped off by the 1%.
I used to feel guilty about things like that.

Most of the time, the tide flows the other way.

After paying into the system for half a century and seeing so much blatant abuse, I've adopted a new mantra: "Where's mine".
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Old 01-27-2015, 11:26 AM   #12
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I view it as recovery of stolen property. If I add up all the taxes paid over my working life I will only recover a small percentage of it by getting benefits.
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Old 01-27-2015, 04:14 PM   #13
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In another thread I mentioned that I have the same PCP on Medicare as on my previous Cadillac health plan. My insurer is the same one that I would have chosen if I had qualified for ACA and the in network Hospitals are the same. I do get better out of state coverage on my Cadillac plan though. My point is that I could easily keep spending and qualifying for Medicare under the current rules......my tax bill would also be basically zero as well.
Nun, I wish you the best.

I was considering Medicaid in Pa, but decided to go with a regular insurance plan via ACA, heavily subsidized, because of the lack of information about Medicaid in Pa. You may have a Medicaid plan under the same insurer as your Mega insurance, but their Medicaid version may be different from the regular version. i.e., services may be denied or reduced under the Medicaid version. I hope not but....

More power to you, and I hope Medicaid works well for you. Actually, it may be better than my conventional health insurance (out-of-network nonsense, non-covered services, attempts at balance billing, waivers they want you to sign, no way to know in advance what things will cost, etc!!)

Just saying I haven't been able to get a good feeling about going onto Medicaid, but I am rooting for you.

Keep us posted!
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Old 01-27-2015, 04:30 PM   #14
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But of course the modern state enjoys harassing upper middle class people; it's what they do best.
I've pondered as to why it always seems like that, and I'm guessing that a) people with more money can do something about it and b) people with less money don't care because of the the 'blood out of a turnip' thing. That leaves upper middle class as the only people that care but can't do anything about it. leading to possible frustration if one lets it bother them.
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Old 01-27-2015, 06:49 PM   #15
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I have a friend on Medicaid here because he is poor & it is very difficult to find any providers that will take it.
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Old 01-27-2015, 07:42 PM   #16
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I have a friend on Medicaid here because he is poor & it is very difficult to find any providers that will take it.
It should be noted that community health centers typically take medicaid, and in states that have expanded medicaid many free clinics are moving to take medicaid also. So the care might not be as good, more like a college health service but it is care. (Much more available in a big city). Note that CVS minute clinics and Walgreens clinics in general take Medicaid also. So medicaid is a step up from uninsured, but down from regular insurance.
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Old 01-27-2015, 08:06 PM   #17
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While many Dr's take Medicaid patients if you end up in the hospital for something serious it may not be quite the same situation. Certain tests, procedures, etc may not be medicare eligible which might not be the case with your retiree medical.
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Old 01-27-2015, 09:53 PM   #18
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I work in a specialty clinic and while we see Medicaid and Medicare patients there are fewer openings per day for these folks due to poor reimbursement. And we are the only clinic with our specialty in our area that takes patients with these types of insurance. Bottom line is that if you need specialty care your choices may be more limited and your wait times longer.
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Old 01-28-2015, 07:42 AM   #19
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We are going to increase our income through conversions or capital gain sales to qualify for a silver plan over Medicaid. We are mostly doing this because of continuous travel during the year from state to state which likely would make Medicaid a nightmare.
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