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Old 09-24-2012, 11:43 AM   #21
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For a family of 3 it looks like the FPL is about $76k according to this, so we should still be able to fill up the 15% tax bracket fairly well for a couple of years at least. Until DS gets a job.
Yeah, that sounds like you can use all the 15% bracket without falling off the cliff. I suspect that's what I'd probably be aiming for in your situation.
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Old 09-24-2012, 11:47 AM   #22
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Single doesn't look quite as bad, since the HI premium is lower. It's maxing out at a subsidy of $212/month at $44k income and $560/month HI premium for a 60 year old.
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Old 09-24-2012, 11:53 AM   #23
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Another thing I question about the Berkeley calculator is that it only looks at the age of the youngest covered adult. Let's say there are two families of three: One is a single parent with two college age children (family A); the other is a couple with one college age child (Family B).

Let's say the ages of Family A are: 43, 22, 20.

Let's say the ages of Family B are: 62, 60, 19.

You would think Family B is more costly to insure, right? But if all you look at is the age of the youngest, if *anything* this calculator would indicate Family A would cost more because the youngest is older.

That can't be right... can it?
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Old 09-24-2012, 11:54 AM   #24
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.....

60k -> $791 (397% of FPL)
$60,600 -> $0 (401% of FPL)

That is the most expensive $600 anyone has ever earned. So in this case it's obvious that it's not terribly advantageous to exceed $60,000 in income unless you *greatly* exceed it to the point where the loss of subsidy (to the tune of about $9,500 a year) isn't a major concern.
Absolutely. A 1,582% economic cost ignoring income taxes!!! I think I'll target $58k so I'll have some breathing room for unanticipated items or if a deduction is denied upon audit or something like that.
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Old 09-24-2012, 11:57 AM   #25
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Answer to my own question:
from healthreformgps.org

On October 27th, the House voted 262-157 to pass H.R. 2576, a bill to strike out a “glitch” in the Affordable Care Act (ACA) that would have allowed middle-class couples to enroll in Medicaid starting in 2014. Under the ACA, before the new bill passed, the majority of Social Security benefits were not taxed, and thus not reviewed when determining Medicaid eligibility. A couple earning as $60,000 per year could have gained access to Medicaid. H.R. 2576 moves to include Social Security benefits as income when calculating modified adjusted gross income (MAGI). MAGI is used to determine Medicaid eligibility. On Tuesday, October 25th, the Obama administration publicly supported the bill.
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Old 09-24-2012, 12:00 PM   #26
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Absolutely. A 1,582% economic cost ignoring income taxes!!! I think I'll target $58k so I'll have some breathing room for unanticipated items or if a deduction is denied upon audit or something like that.
Yeah, after DS leaves I'll be at that $60k level I guess. Clearly not worth $10k for an extra $10k-$15k of Roth conversions. But that's a good thing overall. HI will be less than budgeted.
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Old 09-24-2012, 12:04 PM   #27
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If I recall correctly, MAGI does NOT include SS payments. Anyone care to comment?

If that is so, I can think of about 12,000 good reasons to take it as soon as possible.
I think does. This was taken from an IRS bulletin


" MAGI is defined under section 36B as the taxpayer’s adjusted gross income defined under section 62, increased by three components: (1) any amount excluded from gross income under section 911, (2) any amount of interest received or accrued by the taxpayer during the taxable year that is exempt from tax, and (3) the amount of social security benefits of the taxpayer excluded from gross income under section 86 for the tax year."

Full link...

Internal Revenue Bulletin - June 4, 2012 - REG-119632-11
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Old 09-24-2012, 12:33 PM   #28
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If I recall correctly, MAGI does NOT include SS payments. Anyone care to comment?

If that is so, I can think of about 12,000 good reasons to take it as soon as possible.
The only reason to take SS at an early age is if you need the money to survive. IOW - Your portfoilo is not big enough.
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Old 09-24-2012, 12:35 PM   #29
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The only reason to take SS at an early age is if you need the money to survive. IOW - Your portfoilo is not big enough.
Oh, while I agree with you, please don't go there. This thread is on a good tangent and I would hate to see it derailed.
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Old 09-24-2012, 12:38 PM   #30
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The only reason to take SS at an early age is if you need the money to survive. IOW - Your portfoilo is not big enough.

I agree with you as well.
The only reason would be is IF SS was NOT counted in determining MAGI, it would be easier to stay under the $60K subsidy level...that would be good enough reason to take it early and pocket about $10K in subsidies. I assume that's why the law was changed.
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Old 09-24-2012, 02:17 PM   #31
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I plan to have my income be higher than the Medicaid limit because I would rather have private insurance than Medicaid. I'm thinking that I will limit my Roth conversions so I am just inside the subsidy income limit.
That's what I'm thinking, too.
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Old 09-24-2012, 09:33 PM   #32
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Another thing I question about the Berkeley calculator is that it only looks at the age of the youngest covered adult. Let's say there are two families of three: One is a single parent with two college age children (family A); the other is a couple with one college age child (Family B).

Let's say the ages of Family A are: 43, 22, 20.

Let's say the ages of Family B are: 62, 60, 19.

You would think Family B is more costly to insure, right? But if all you look at is the age of the youngest, if *anything* this calculator would indicate Family A would cost more because the youngest is older.

That can't be right... can it?
Doesn't sound right to me. I suspect it is an oversimplification in the website. But it is still more flexible than the Kaiser calculator which could only do singles or family of 4.

Perhaps the more important numbers to focus on is the % of income/premium cost to family since those numbers don't change with age. The subsidy is just the excess of the health insurance premium over the cost to the family (which is a % of income based on family size).
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Old 09-24-2012, 10:17 PM   #33
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Another thing I question about the Berkeley calculator is that it only looks at the age of the youngest covered adult. Let's say there are two families of three: One is a single parent with two college age children (family A); the other is a couple with one college age child (Family B).

Let's say the ages of Family A are: 43, 22, 20.

Let's say the ages of Family B are: 62, 60, 19.

You would think Family B is more costly to insure, right? But if all you look at is the age of the youngest, if *anything* this calculator would indicate Family A would cost more because the youngest is older.

That can't be right... can it?
Note that the age based premiums can vary by a factor of 3.
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Old 09-24-2012, 10:36 PM   #34
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Very interesting thing. I put in 2 people at age 45 youngest (other will be 46).

At 30,200 gross annual income, the premium is $158 a month with limit on co-pays and such at $4033.

At 30,300 gross annual income, the premium is $159 a month with limit on co-pays and such jumping to $6050.

So that extra $100 income could cost you over $2000 a year.

Note these figures are near 200% poverty level and represent a different cliff than the 399% one.

So many sharp edges to this
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Old 09-25-2012, 02:53 AM   #35
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I am not getting the same results with the two calculators (Kaiser and Berkeley). I guess we should wait a few more months to have a clearer idea of how the subsidy / premium combinations work. .
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So many sharp edges to this
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Old 09-25-2012, 12:30 PM   #36
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I think it was this one from berkeley

National Health Reform Calculator
I like this calculator better, too.

So if your family size is 2, then the stated monthly premium is for coverage for both people, correct? My situation is that there are 2 of us in the household but only one of us will need the insurance coverage, DH will be covered by a subsidized retiree plan that will be eliminating coverage for spouses.

I'm still not clear if I should use joint household income or just mine since I'm the only one that needs the insurance. Can I even get insurance for just me or will we have to get coverage for both of us? In the next couple of years DHs subsidy for his retiree plan may drop so low and his cost increase so much that coverage with a plan that covers both of us may be the best solution. But that's a few years down the road. For 2014 through about 2017 I'm looking for coverage for just me.
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Old 09-25-2012, 01:44 PM   #37
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I can see a scenario where it might pay to take a big 401k distribution in 2013 for extra cash on hand. AGI minimization may be a new objective.
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Old 09-25-2012, 02:56 PM   #38
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I can see a scenario where it might pay to take a big 401k distribution in 2013 for extra cash on hand. AGI minimization may be a new objective.
But a big 401k distribution would increase 2013 income and that 2013 income would probably be used to determine either 2015 or 2014 subsidies, so I don't think that is a great idea.

I'm assuming that 2012 tax return data will be used to determine 2014 subsidies, at least initially; and that the 2014 subsidy might be later adjusted to reflect 2013 tax return data. From the information currently available it is not clear.
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Old 09-25-2012, 03:39 PM   #39
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But a big 401k distribution would increase 2013 income and that 2013 income would probably be used to determine either 2015 or 2014 subsidies, so I don't think that is a great idea.

I'm assuming that 2012 tax return data will be used to determine 2014 subsidies, at least initially; and that the 2014 subsidy might be later adjusted to reflect 2013 tax return data. From the information currently available it is not clear.
I hope not! We will be retiring in 2015 and needing this insurance and have a big income in 2013.

I was under the impression the subsidy was a refundable tax credit that they advance you, so it would be based on your income for the year in which the insurance is purchased. So the 2015 subsidy is based on your projected income for 2015. If you miss your projection and make more money in 2015, you have to repay a portion of the advanced tax credit when you file your 2015 tax return.
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Old 09-25-2012, 04:15 PM   #40
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I hope not! We will be retiring in 2015 and needing this insurance and have a big income in 2013.

I was under the impression the subsidy was a refundable tax credit that they advance you, so it would be based on your income for the year in which the insurance is purchased. So the 2015 subsidy is based on your projected income for 2015. If you miss your projection and make more money in 2015, you have to repay a portion of the advanced tax credit when you file your 2015 tax return.
I hope it works the way you think it does. It would make my 2012 tax planning much easier and it will be fun to watch the feds going back and collecting overcredits that they have made to taxpayers.
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