Obamacare - more incentive to early retire?

[marko]

Another question for MA residents is: How is the state subsidy going to be reconciled with the federal law's subsidy? I'm pretty sure "double dipping" won't be allowed.

Are you kidding? This is a Mass scamster's dream! Double dipping won't be allowed unless you have 'connections'.

 

[BLS53]

I don't know if Medicaid will be defined differently under the new health care act, but as it is now, it is considered a welfare program. For those that are planning to ER on income within the Medicaid guidelines, I doubt that any non-disabled person under 65 will be allowed to do this.

I tried this with food stamps when I retired from the Navy at age 42 back in 1995. Even though my pension income was within food stamp guidelines, I was told to get a j*b. I went to w*rk for another 5 years, and then was fortunate enough to receive an inheritance, that with my pension, allowed me to comfortably ER.

I'm not saying that this will work the same way with this health care law, but I would be surprised if they let someone with say a $500k portfolio, throwing off $20k per year, go on Medicaid.

 

[donheff]

I don't know if Medicaid will be defined differently under the new health care act, but as it is now, it is considered a welfare program. For those that are planning to ER on income within the Medicaid guidelines, I doubt that any non-disabled person under 65 will be allowed to do this.

This is an expansion of Medicaid to cover able bodied people earning up to 133% of the poverty level (or something close to that) - no requirement that they have dependent children or anything. It is because it is substantially different than the original Medicaid that Roberts justified treating it as a "new" program and concluding that the Feds can't deny funding for the old program if states don't agree to take this new one on.

 

[BLS53]

This is an expansion of Medicaid to cover able bodied people earning up to 133% of the poverty level (or something close to that) - no requirement that they have dependent children or anything. It is because it is substantially different than the original Medicaid that Roberts justified treating it as a "new" program and concluding that the Feds can't deny funding for the old program if states don't agree to take this new one on.

It's just when I hear Medicaid, I think welfare. Meaning the individual is incapable of earning enough money to provide health care for themselves and/or their dependents. I don't see able bodied young retirees falling into that category, just because they called it quits, and decided to live a spartan lifestyle.

 

[M Paquette]

It's just when I hear Medicaid, I think welfare. Meaning the individual is incapable of earning enough money to provide health care for themselves and/or their dependents. I don't see able bodied young retirees falling into that category, just because they called it quits, and decided to live a spartan lifestyle.

Folks earring 133% or less of the federal poverty level don't have to go on Medicaid. They are eligible for the subsidy and any plans offered through their state health insurance exchange program. In general, if someone can afford it, they will probably prefer the more flexible alternatives to Medicare coverage. Subsidies at this low income level will be such that they shouldn't have to pay more than 2% of their earnings for the second lowest priced Silver plan on their exchange.

 

[FUEGO]

It's just when I hear Medicaid, I think welfare. Meaning the individual is incapable of earning enough money to provide health care for themselves and/or their dependents. I don't see able bodied young retirees falling into that category, just because they called it quits, and decided to live a spartan lifestyle.

Right now able bodied adults can get their kids on medicaid with moderately high incomes. I believe our family could have an AGI of somewhere in the 40-45k per year range and still qualify for the free children's health insurance that is medicaid (although they have a name for it in my state - Children's Health Insurance Program or something). No assets test, just income.

My fully insured able bodied sister in law also switched to medicaid when she became pregnant since they pay basically 100% of maternity costs (instead of leaving her with thousands in copays, coinsurance, and deductibles on her employer provided plan). Again, no assets test, just income test.

Sure you can call it welfare, but the only question is do you qualify per the terms of the program?

 

[easysurfer]

I wonder if even under the expanded medicaid will access to doctors be equal to someone with health insurance not using medicaid. Similar to HMO vs PPO in today's health insurance world.

 

[youbet]

You guys got it all wrong. It's not surcharge medicare tax on $250K of investment income, it's on the additional investment income above $250K. The first $250k pays regular rates.

I'm not sure we could get by ... but I'd sure like a shot at it.

The number, for a tax payer filing as a single, is $200k, not $250k.

 

[MichaelB]

The number, for a tax payer filing as a single, is $200k, not $250k.

Right.

 

[donheff]

It's just when I hear Medicaid, I think welfare. Meaning the individual is incapable of earning enough money to provide health care for themselves and/or their dependents. I don't see able bodied young retirees falling into that category, just because they called it quits, and decided to live a spartan lifestyle.

I agree with you on this although it would be hard to monitor. Long term unemployed would fit into the "incapable" category but filtering out the malingerers (us ERs) would be difficult.

Folks earring 133% or less of the federal poverty level don't have to go on Medicaid. They are eligible for the subsidy and any plans offered through their state health insurance exchange program. In general, if someone can afford it, they will probably prefer the more flexible alternatives to Medicare coverage. Subsidies at this low income level will be such that they shouldn't have to pay more than 2% of their earnings for the second lowest priced Silver plan on their exchange.

I think this makes more sense than Medicaid for a low income ER. Medicaid covers more than Medicare but it isn't equivalent to Medicare A&B plus a supplement, is it? Most ERs will want pretty comprehensive coverage so the supplement will probably be the better choice.

 

[BLS53]

Folks earring 133% or less of the federal poverty level don't have to go on Medicaid. They are eligible for the subsidy and any plans offered through their state health insurance exchange program. In general, if someone can afford it, they will probably prefer the more flexible alternatives to Medicare coverage. Subsidies at this low income level will be such that they shouldn't have to pay more than 2% of their earnings for the second lowest priced Silver plan on their exchange.[/QUOTE

Yes, but if you look at those charts presented earlier in the thread, the terminology being used for the 133% of poverty level and below, is "Medicaid".

I find it interesting that they chose to use the name "Medicaid" if the term has a different definition than what we have traditionally known as Medicaid. If they wanted the subsidy to be something different, they would have given it a different name. I don't think young people (under 65) who don't want to work, are going to be able to pull this off.

Two scenarios. One not uncommon in today's world, the other a little far fetched. Neither involves what we think of as ER, but the principle is the same.

1. An adult child living with their parents. Parent likes having them around, and doesn't care if they work or not. Child turns 26, goes off the provision allowing the carriage on parent's policy. Child then notifies the government they don't plan to work, and they want their "Medicaid" subsidy.

2. Person turns 18, decides they're going "into the wild" and live off the land all their life. They want their "Medicaid" too.

Both of these situations aren't much different than a bare bones ER lifestyle. The common factor being they involve able bodied, non-seniors, wanting free government health care.

Right now, Medicaid is not easy to get. You need to be disabled or have dependent children. If you're able bodied, you need to have a full-time job, or be looking for one. The common denominator being that despite your best efforts, you are incapable of earning enough income to provide healthcare for yourself or dependents.

If this 133% of poverty level provision is the free-for-all some think it is, no wonder there is such resistance to it's implementation by fiscal conservatives.

 

[M Paquette]

Yes, but if you look at those charts presented earlier in the thread, the terminology being used for the 133% of poverty level and below, is "Medicaid".

I find it interesting that they chose to use the name "Medicaid" if the term has a different definition than what we have traditionally known as Medicaid. If they wanted the subsidy to be something different, they would have given it a different name. I don't think young people (under 65) who don't want to work, are going to be able to pull this off.

The subsidy program and Medicaid are two different programs.

The Medicaid coverage available in the expanded Medicaid program is pretty much today's current Medicaid coverage. There will be some doctors that will accept it, and some that won't. It's pretty bare-bones stuff.

The Medicaid expansion is in terms of who will be eligible. Right now a single adult, or in some jurisdictions a married couple with no dependent children won't qualify for Medicaid. Care for indigent persons not eligible for Medicaid is typically through county programs where available, charity clinics when and where available, and hospital emergency rooms (under the Emergency Medical Treatment And Active Labor Act of 1986). Under the expansion, all persons with income under 133% of the federal poverty level will be eligible for Medicaid coverage. This means that hospitals and clinics that have been providing care to these folks under EMTALA and passing the costs along to paying patients will be able to get some reimbursement through Medicaid. (Part of your hospital bill goes to cover the roughly one in ten patients that are uninsured and can't afford to pay, but are treated under EMTALA and similar state rules.)

1. An adult child living with their parents. Parent likes having them around, and doesn't care if they work or not. Child turns 26, goes off the provision allowing the carriage on parent's policy. Child then notifies the government they don't plan to work, and they want their "Medicaid" subsidy.

2. Person turns 18, decides they're going "into the wild" and live off the land all their life. They want their "Medicaid" too.

Both of these situations aren't much different than a bare bones ER lifestyle. The common factor being they involve able bodied, non-seniors, wanting free government health care.

They can apply for it, and hospital acute care will be covered, along with the other bare-bones items that Medicare does (minimal wellness programs for immunizations and whatnot in most states, chronic care outside of the ER, like training in using a nebulizer, eventual physician access, and so on. Being on Medicaid is something like living those horror stories some folks like to tell about medical care in Canada or Europe.

The subsidy program is used to partially cover the cost of buying private insurance, for folks with an adjusted gross income below 400% of the federal poverty level. A full subsidy is paid at incomes of 133% of the poverty level, and is scaled back as income rises to the 400% level. This is used to buy private insurance or HMO coverage, like United Health Care, Blue Cross, or Kaiser Permanente. Any of these, even the Bronze level plans, would be preferable to Medicaid.

 

[Wasting]

The increased tax (ie the 3.8% medicare tax on dividends and interest) far exceeds any possible savings I would get on lower premiums. They would have to pay me to take insurance before I would see a net reduction in costs.

 

[M Paquette]

The increased tax (ie the 3.8% medicare tax on dividends and interest) far exceeds any possible savings I would get on lower premiums. They would have to pay me to take insurance before I would see a net reduction in costs.

The good news is that the first $250,000 ($200,000 if single) of income from dividends and interest is exempt from that tax. The key to minimizing that tax is to keep your dividend and interest income down. Careful planning in your taxable accounts should let you replace some of that dividend income with capital gains, which could then be cancelled out with realized losses.

This is one of those things where aggressive tax loss harvesting a few years ago comes in handy. ("Yeah. NOW he tells me...")

 

[donheff]

The increased tax (ie the 3.8% medicare tax on dividends and interest) far exceeds any possible savings I would get on lower premiums. They would have to pay me to take insurance before I would see a net reduction in costs.

So what are you earning, 450k/yr?

 

[Wasting]

So what are you earning, 450k/yr?

Double that, and its mostly interest and dividends and cap gains. Not much is ordinary income.

 

[Wasting]

This is one of those things where aggressive tax loss harvesting a few years ago comes in handy. ("Yeah. NOW he tells me...")

I did aggressive tax harvesting november 2010 because the bush tax cuts were set to sunset. All that got me was a huge tax bill.

 

[pb4uski]

Double that, and its mostly interest and dividends and cap gains. Not much is ordinary income.

Then you can afford whatever health insurance costs.

 

[grasshopper]

Double that, and its mostly interest and dividends and cap gains. Not much is ordinary income.

Thank you for supporting me in my life of leisure.

 

[Wasting]

Then you can afford whatever health insurance costs.

I'm not complaining about the cost of insurance. I've had insurance for 20+ years and I'm still insured to this day. My point was about the general comment that some folks (not you) say that the cost of insurance is or will be going down. Technically, perhaps, but when I factor into that the increased taxes (the 3.8%), my cost is definately not going down. What also concerns me is the triggers in the bill that if the savings are not achieved (and I have no confidence they will be), then the taxes go higher yet. Now what might lower my costs, is going expat. I haven't done all my homework on that yet, but its a thought.

 

[M Paquette]

I did aggressive tax harvesting november 2010 because the bush tax cuts were set to sunset. All that got me was a huge tax bill.

Tax LOSS harvesting. Realizing capital gains on anticipation of future tax related events is... Well... You found out how that works.

I expect that with PPACA, the cost of medical care and insurance will rise. I expect that if the law were repealed, or never existed the cost of medical care and insurance would rise. It's just not a cost containment plan. What it does do is give me access to medical insurance, and sets measures in place to keep insurers from yanking that insurance in the event of an expensive illness.

I prefer to insure against catastrophic events, and cover routine expenses out of pocket. That would be a high deductible HSA plan of some sort. I was actually turned down for some of these on some rather dubious underwriting decisions when I first retired. I did finally find plans, without riders, for my family. The current law makes it very unlikely I'll have to go through that again.

 

[Wasting]

Tax LOSS harvesting. Realizing capital gains on anticipation of future events is... Well... You found out how that works

Sorry; yes I do tax loss harvesting every year of course. I don't have a lot of losses as a percentage but I understand some ppl do.

 

[Animorph]

The CBO estimated in 2010 that the law would reduce the amount of labor used in the economy by roughly half a percent.

http://bigstory.ap.org/article/fact-...nt-health-plan

But that’s mostly because the law will give many people the opportunity to retire, stay at home with family or switch to part-time work, since they will be able to get health insurance more easily outside of their jobs."

So CBO is projecting lots of people retiring with the easier availabilty of HI.

 

[Animorph]

But that’s mostly because the law will give many people the opportunity to retire, stay at home with family or switch to part-time work, since they will be able to get health insurance more easily outside of their jobs."

So CBO is projecting lots of people retiring with the easier availabilty of HI.

Quote got kind of mangled, and edited link doesn't work for me. Not much of my words in there, should be mostly quote:

"The CBO estimated in 2010 that the law would reduce the amount of labor used in the economy by roughly half a percent.

But that’s mostly because the law will give many people the opportunity to retire, stay at home with family or switch to part-time work, since they will be able to get health insurance more easily outside of their jobs."

 

[Bestwifeever]

Quote got kind of mangled, and edited link doesn't work for me. Not much of my words in there, should be mostly quote:

For some reason ellipses were substituted for part of the link--try this:

FACT CHECK: On keeping your current health plan