Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 09-16-2013, 02:29 PM   #41
Recycles dryer sheets
 
Join Date: May 2012
Posts: 403
Quote:
Originally Posted by pb4uski View Post
Yes, at that level the cost over 10% of AGI would be deductible, and the tax benefit would help somewhat IF the family's itemized deductions exceed the standard deduction. If the family was already itemizing, the incremental tax benefit would probably be ~$700 - better than nothing but not a huge help.
In late December last year, I was doing calculations with TurboTax to see how large a LTCG I could harvest and still pay 0% federal income tax on the LTCG. I was paying for COBRA most of last year and it was the first year I was ever above the threshold for deducting medical expenses. But as I harvested more LTCG, the threshold for deducting medical expenses would increase and therefore my deduction would decrease. The same thing will happen this year. Oh well, you can't win 'em all.
__________________

__________________
anethum is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-16-2013, 02:36 PM   #42
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Quote:
Originally Posted by pb4uski View Post
Yes, at that level the cost over 10% of AGI would be deductible, and the tax benefit would help somewhat IF the family's itemized deductions exceed the standard deduction. If the family was already itemizing, the incremental tax benefit would probably be ~$700 - better than nothing but not a huge help.
Very few people making less than $100,000 itemize per IRS data. You have to have a very high mortgage, property taxes, charity contributions and/or medical bills to beat the standard deduction. Itemized deductions are generally for the "wealthy."

Paying for your own, unsubsidized health insurance could make it happen but it will definitely make people "insurance poor." I suspect in that case we'll see lots of people not buying the insurance.
__________________

__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 09-16-2013, 02:52 PM   #43
Dryer sheet wannabe
 
Join Date: Jun 2013
Location: SoCal
Posts: 16
Quote:
Originally Posted by daylatedollarshort View Post
In California the lowest paid (or lowest MAGI anyway) get either Medi-Cal or subsisized premiums and on the enhanced silver plan, lower co-pay and deductibles, too.

It will be fantastic for us. This year we will spend maybe $50K on COBRA / conversion policy premiums plus out of pocket maxes. Medical expenses are a major cause on bankruptcy in the US, even among people who have health insurance.

Next year with subsidized exchange insurance and we hope to spend very little on health care, maybe 3K or less.
Do you mean $5K == $5000? $50K is $50,000 and if you're successfully paying $50K on cobra payments, I can't think of a way you'd get subsidized exchange coverage?
__________________
No_Such_Reality is offline   Reply With Quote
Old 09-16-2013, 03:13 PM   #44
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,326
Quote:
Originally Posted by No_Such_Reality View Post
Do you mean $5K == $5000? $50K is $50,000 and if you're successfully paying $50K on cobra payments, I can't think of a way you'd get subsidized exchange coverage?
I mean ~$50,000, and that includes premiums, out of pocket max and out of network costs. Medical bills are the most common reason families go bankrupt, even those that have insurance.

For 2014, health care subsidies are not indexed to assets or gross income, just MAGI on 2014 tax returns. What we paid in costs for 2013 has no relationship to our subsidy eligibility for 2014.

Without the affordable care act, many people here in their 50s or 60s with kids still at home who lost insurance from a megacorp job and had a family member or two develop a serious illness or be in a car accident could easily be in the same boat as we are now.
__________________
daylatedollarshort is offline   Reply With Quote
Old 09-16-2013, 03:36 PM   #45
Dryer sheet wannabe
 
Join Date: Jun 2013
Location: SoCal
Posts: 16
Sorry to hear that daylate, I didn't consider tapping assets to cover medical bills and was thinking $50K for Cobra coverage premiums and not the bills.

Your reality has been one of the main concern holding me back on my FIRE plans. Okay, that and the fickle nature of not being sure I'd be able to get insurance even if I could pay. I'm in the same boat, we had our child late in life and I'll be carrying him on insurance thru my 50s.
__________________
No_Such_Reality is offline   Reply With Quote
Old 09-16-2013, 03:56 PM   #46
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,427
Quote:
Originally Posted by 2B View Post
Very few people making less than $100,000 itemize per IRS data. You have to have a very high mortgage, property taxes, charity contributions and/or medical bills to beat the standard deduction. Itemized deductions are generally for the "wealthy."

Paying for your own, unsubsidized health insurance could make it happen but it will definitely make people "insurance poor." I suspect in that case we'll see lots of people not buying the insurance.
Many middle class taxpayers itemize deductions - itemized deductions are NOT generally only for the wealthy as you suggest. But, please don't let facts get in the way of your arguments.

24.3% of all tax filers with AGI from $0 to $100k itemize.

65.8% of all tax filers that itemized deductions had AGI of less than $100k and the itemized deductions claimed by those with AGI up to $100k represented 45.0% of all itemized deductions claimed, so I think it is folly to claim that itemized deductions are generally for the wealthy - itemized deductions are a significant benefit to many middle income families.

See Table 1 and Figure 1 in: http://www.fas.org/sgp/crs/misc/R43012.pdf
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 09-16-2013, 04:22 PM   #47
Thinks s/he gets paid by the post
 
Join Date: Apr 2011
Posts: 1,538
The ACA is about getting young adults to subsidize the health care of older adults when the older adults are the higher income group. What a gig.
__________________
gerntz is offline   Reply With Quote
Old 09-16-2013, 04:54 PM   #48
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,326
Quote:
Originally Posted by gerntz View Post
The ACA is about getting young adults to subsidize the health care of older adults when the older adults are the higher income group. What a gig.
I think the ACA is more about having affordable health care coverage for all - not just those 65 and over or households with coverage through their employers. The U.S. stands almost entirely alone among developed nations that lack universal health care -

Here's a Map of the Countries That Provide Universal Health Care (America's Still Not on It) - Max Fisher - The Atlantic

And in other countries, universal coverage or not, health costs are often a small fraction of comparable tests and services in the U.S. -

http://www.washingtonpost.com/blogs/...are-ludicrous/
__________________
daylatedollarshort is offline   Reply With Quote
Old 09-16-2013, 07:34 PM   #49
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Posts: 1,649
Quote:
Originally Posted by Mulligan View Post
Yes sir, I agree. And unfortunately for me, some of that cost shifting is being squarely dumped on my back.
And mine. I remain hopeful that there may be some sliding scale as more and more people realize what may happen.

Kind of sad really that those of us who have income we have no hopes of controlling are thinking about asking our companies and family businesses to keep it!

Equally sad is all who will be trying to stay under the 400% for the subsidy.

Meaning, it is THAT huge of a difference.

We may see tax revenues drop accordingly. Another unintended consequence perhaps.
__________________
sheehs1 is offline   Reply With Quote
Old 09-17-2013, 12:38 PM   #50
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
Quote:
Originally Posted by gerntz View Post
The ACA is about getting young adults to subsidize the health care of older adults when the older adults are the higher income group. What a gig.
And employer provided insurance, with one cost for young and old doesn't do an even better job of that?
__________________
Animorph is offline   Reply With Quote
Old 09-17-2013, 01:04 PM   #51
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,379
Quote:
Originally Posted by Animorph View Post

And employer provided insurance, with one cost for young and old doesn't do an even better job of that?
Now don't be bringing up employer provided insurance, Animorph, or I will have to get back on my soapbox and complain about why the company and worker get the insurance benefit tax free, and I have to pay with after tax dollars!
__________________
Mulligan is offline   Reply With Quote
Old 09-17-2013, 01:26 PM   #52
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
I am beginning to detect a distinct aroma of pork.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 09-17-2013, 01:30 PM   #53
Recycles dryer sheets
killingme's Avatar
 
Join Date: Apr 2013
Posts: 85
I saw this and thought it , if you ignore the title, both entertaining and intriguing as it does highlight the absurdity of health care cost in the US. His First 4 Sentences Are Interesting. The 5th Blew My Mind. And Made Me A Little Sick.
__________________
killingme is offline   Reply With Quote
Old 09-17-2013, 01:44 PM   #54
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,326
Quote:
Originally Posted by killingme View Post
I saw this and thought it , if you ignore the title, both entertaining and intriguing as it does highlight the absurdity of health care cost in the US. His First 4 Sentences Are Interesting. The 5th Blew My Mind. And Made Me A Little Sick.
Excellent points. Thanks for posting that.
__________________
daylatedollarshort is offline   Reply With Quote
Old 09-17-2013, 03:36 PM   #55
Moderator Emeritus
 
Join Date: Oct 2007
Posts: 4,929
Quote:
Originally Posted by pb4uski View Post
It seems to me obscene that a couple earning a little over 400% FPL would be expected to spend 20% or more of their earnings for health insurance. If they had health issues with deductibles and copays it would be even more.
Obscene? Welcome to my life...

Medical Expenses as a Percentage of Gross Income in Retirement:
2012 25.1%
2011 20.2%
2010 27.0%
2009 29.5%

Being retired ain't cheap. MAGI was above 400% of the Federal Poverty Level for 2009-2011. We were under by about $650 for 2012.
__________________
M Paquette is offline   Reply With Quote
Old 09-17-2013, 04:16 PM   #56
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,379
Quote:
Originally Posted by M Paquette View Post

Obscene? Welcome to my life...

Medical Expenses as a Percentage of Gross Income in Retirement:
2012 25.1%
2011 20.2%
2010 27.0%
2009 29.5%

Being retired ain't cheap. MAGI was above 400% of the Federal Poverty Level for 2009-2011. We were under by about $650 for 2012.
Ouch! My deepest sympathy,M. Granted my income is way above the 400% threshold for a single, but still 25% of my gross would put me back in the workforce, yesterday. Underwritten, high deductible plan with HSA deduction, low premium, and no healthcare costs other than dental cleanings have kept mine below 0% of my gross income the past 4 years. I will get one more year of it, then the party is over for me.
__________________
Mulligan is offline   Reply With Quote
Old 09-17-2013, 04:53 PM   #57
Recycles dryer sheets
 
Join Date: Nov 2011
Posts: 127
Quote:
Originally Posted by pb4uski View Post
The reason I suggested that the subsidies are merely a different form of cost shifting is because the subsidies are funded by taxpayers so it ends up being those with higher incomes (who don't get a subsidy but pay the taxes that provide for the subsidy) subsidizing those with lower incomes (who get the subsidy but pay little in taxes).

So at the end of the day the poor pay less than the actual cost of providing their care and the rich pay more than the actual cost of providing for their care. It seems like cost shifting to me.
Of course you are correct. A subsidy is clearly an entitlement. Websters defines an entitlement as "a type of financial help provided by the government for members of a particular group." Entitlement - Definition and More from the Free Merriam-Webster Dictionary
The question is will there be enough payers for those getting a subsidy/entitlement.

I have yet to talk to one 26 year old college graduate with a job with no healthcare that plans to sign up after looking at the rates (student loans, and all other priorities), and I have talked to more than a few. I would be interested to know if any of you have family/friends/co-workers etc. in this category, in case I have a sampling error.
__________________
Malcolm2 is offline   Reply With Quote
Old 09-17-2013, 05:11 PM   #58
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,427
Quote:
Originally Posted by Malcolm2 View Post
...I have yet to talk to one 26 year old college graduate with a job with no healthcare that plans to sign up after looking at the rates, and I have talked to more than a few. I would be interested to know if any of you have family/friends in this category, in case I have a sampling error.
DS will be 26 next month. His health insurance would be $346 for a bronze plan and $417 for a silver plan before subsidy but would be $14 and $84 respectively after the subsidy based on his income. However, he recently started a new job that currently offers health insurance to its employees after a probationary period so he will be on that if they retain the current plan.

Still waiting to hear what his new employer will do for 2014. I will insist that he get/keep health insurance and get the subsidy if his new employer doesn't provide it. i don't want to be in a position where he need medical care and is uninsured and I end up getting stuck with the bill.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 09-17-2013, 05:25 PM   #59
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 2,423
Quote:
Originally Posted by Malcolm2 View Post

I have yet to talk to one 26 year old college graduate with a job with no healthcare that plans to sign up after looking at the rates (student loans, and all other priorities), and I have talked to more than a few. I would be interested to know if any of you have family/friends/co-workers etc. in this category, in case I have a sampling error.
Our younger son will be 27 in January 2014. He was on our insurance until last January when he turned 26, reimbursing us for his $40/mo premium. He has a college degree and is self employed. He went without insurance in 2013 and is planning on using Obamacare in 2014. Looking at the info so far he can easily afford a bronze plan or a catastrophic plan.

He has no student loans, no debt at all. His priorities are working and saving, not playing and partying. I'll admit he's not typical in this respect.
__________________
Married, both 62. DH retired June, 2010. I have a pleasant little part time job.
Sue J is offline   Reply With Quote
Old 09-17-2013, 05:29 PM   #60
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by Sue J View Post
He has no student loans, no debt at all. His priorities are working and saving, not playing and partying. I'll admit he's not typical in this respect.
If it makes him feel better about his choices, I was the same way as a 20-something -- always saving and investing, for a down payment, for paying cash on a car, for retirement. And that is *the* reason why I could get laid off at 47 and feel like I could consider myself retired.
__________________

__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 05:18 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.