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View Poll Results: Will you try to get the ACA subsidy?
Yes, the thousands saved would be worth the reduced budget 80 42.55%
No, the threshold is too low for the planned budget 23 12.23%
Undecided, still looking for more info. on how the subsidies would work 43 22.87%
Don't plan to use ACA plan, have alternative health care 42 22.34%
Voters: 188. You may not vote on this poll

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Old 04-05-2013, 09:49 PM   #141
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The subsidies apply to premiums - "Consumer Portion of Monthly Premium For Silver Plans (Balance paid by Federal subsidy)" (emphasis added) - no mention of subsidies applying to out-of-pocket costs.

did you read the columns-NO DEDUCTIBLE-in the first 2 plans-lower out of pocket costs. you should read.this is supplied by california-has nothing to do with premiums

another-cost sharing 3/4 page down under part about tax credits

http://www.coveredca.com/getting-cov...milies/#faq-11
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Old 04-05-2013, 09:52 PM   #142
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Originally Posted by gerrym51 View Post
this is my last try. read this article . 6th or 7th paragraph down.

the head of Aetna telling about creating low cost restrictive networks for the exchanges.

AETNA CEO Warns Health Insurance Premiums Will Double Under ObamaCare | FrontPage Magazine
Reading the article in the website you linked - and the full Forbe's article the website quoted - leaves me with the following conclusion: some insurers (Aetna) may try to lowball the coverage available through exchanges but others (Humana) don't think that strategy will work.

Quote:
Bertolini also elaborated on the type of insurance that Aetna would provide on Obamacare’s exchanges. “It’s about having the right products at the right cost structure, [with] narrow networks, low-cost networks,” he said. That is to say, Aetna’s exchange products will aggressively steer patients to low-cost doctors and hospitals so as to keep premiums low.
The website failed to include other information from the Forbes article which is in sharp contrast to Aetna's plans:

Quote:
...counterparts at Humana don’t think that insurers will be able to get away with ultra-low Medicaid rates on the exchanges. “If you go down to Nashville and you ask [hospital chain] HCA about that, they’ll laugh you out of the room,” said Humana executive Bruce Perkins at Humana’s November analyst meeting. “This idea that it’s going to be Medicaid rates—that’s a joke.”
Thanks for the link.
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Old 04-05-2013, 09:52 PM   #143
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this is my last try. read this article . 6th or 7th paragraph down.

the head of Aetna telling about creating low cost restrictive networks for the exchanges.

AETNA CEO Warns Health Insurance Premiums Will Double Under ObamaCare | FrontPage Magazine
Here's the problem: You've pasted in many links like this. They say the exchanges will have to have low cost providers. We all get that. But you also said that somehow subsidized plans will be in a different category from unsubsidized plans. You haven't provided any links or your own thoughts (with or without capitals and punctuation) to substantiate this.
The reason you can't show it is because it isn't so. Any medical plan offered through the exchanges can be bought by people with and without subsidies. The "subsidized plans" are no different in content or quality from "unsubsidized plans."
I'm talking about all medical plans offered through the exchanges here. Medicaid is something different--it will continue to be entirely "subsidized" and it will still be substandard care.
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Old 04-05-2013, 09:56 PM   #144
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Now I give up.
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Old 04-05-2013, 09:58 PM   #145
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Here's the problem: You've pasted in many links like this. They say the exchanges will have to have low cost providers. We all get that. But you also said that somehow subsidized plans will be in a different category from unsubsidized plans. You haven't provided any links or your own thoughts (with or without capitals and punctuation) to substantiate this.
The reason you can't show it is because it isn't so. Any medical plan offered through the exchanges can be bought by people with and without subsidies. The "subsidized plans" are no different in content or quality from "unsubsidized plans."
I'm talking about all medical plans offered through the exchanges here. Medicaid is something different--it will continue to be entirely "subsidized" and it will still be substandard care.

there is no difference to insurance coverage-but there is a difference in number and location of providers-thats all i saying-the odds are you will have to change doctors
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Old 04-05-2013, 10:01 PM   #146
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Here's the problem: You've pasted in many links like this. They say the exchanges will have to have low cost providers. We all get that. But you also said that somehow subsidized plans will be in a different category from unsubsidized plans. You haven't provided any links or your own thoughts (with or without capitals and punctuation) to substantiate this.
The reason you can't show it is because it isn't so. Any medical plan offered through the exchanges can be bought by people with and without subsidies. The "subsidized plans" are no different in content or quality from "unsubsidized plans."
I'm talking about all medical plans offered through the exchanges here. Medicaid is something different--it will continue to be entirely "subsidized" and it will still be substandard care.
+1
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Old 04-05-2013, 10:02 PM   #147
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Now I give up.
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Old 04-05-2013, 11:38 PM   #148
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OK, I'll add one more wrinkle for folks to consider. My family is currently on a high deductible plan that qualifies for an HSA account. The plan (incl. out of pocket costs) currently costs me around $5K/yr. I plan to enroll in a qualified silver ACA plan, which will probably cost around $14K/yr, but expect to receive about $9K in subsidies.

Although the net cost will be lower with the ACA plan, there are some finer points that make this narrower than you might think:

- giving up the HSA will cause me to lose around $1K/yr in tax savings
- I also lose the ability to harvest capital gains at 0% since I will be trying to keep my income as low as possible. Last year, I was able to harvest almost $50K in capital gains at 0%, so to me, this could potentially cost me $50K x 15% = $7.5K in future years depending on what happens with capital gains taxes in the future.

Finally, the decision to use an ACA plan is solely based on the expected tax subsidy - if there was no subsidy, I am guaranteed to be better off staying on my HSA plan, even if I hit my max out of pocket. So it's not simply a matter of maximizing my credit for something I would have bought anyways - it's actually impacting what I should be buying (expectexcept I won't know until after the fact!).

What a mess...
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Old 04-05-2013, 11:52 PM   #149
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What a mess...
Yep. The loss of the 0% CG rate (to the top of the 15% bracket) will impact a lot of folks. And others will be avoiding 72T withdrawals or other 401K/IRA withdrawals prior to reaching Medicare age in order to reduce taxable income and qualify for subsidies--this will possibly add to their tax liabilities later. But with what appears to be a growing rate of "change" in the rules, people will bias toward getting the benefits they can right now rather than betting the rules will stay the same so they can benefit later.

It's a shame to see HDHPs go by the wayside, they were one of the proven ways to reduce medical expenditures. Oh, well, progress . . .
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Old 04-06-2013, 12:08 AM   #150
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It's a shame to see HDHPs go by the wayside, they were one of the proven ways to reduce medical expenditures. Oh, well, progress . . .
I am a firm believer in HDHP - it has certainly changed how my family approaches health costs (I think in a good way). But I'm OK with a more traditional plan as long as it doesn't cost me more $$'s - of course, figuring that out is the whole problem here...

BTW, does anyone know if it's still an option to stay on a HDHP after ACA goes fully into effect? I've read some contradictory articles recently that makes me wonder if it's an option to just stay on my HSA qualified plan (and continue to grow my HSA and harvest capital gains while the 0% CG rate stays in effect).

The contradictory part (or rather, the confusing part for me) being that a HDHP does/does not result in me being considered inadequately covered and requires me to pay the equivalent 'uninsured' penalty...
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Old 04-06-2013, 05:43 AM   #151
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It's a shame to see HDHPs go by the wayside, they were one of the proven ways to reduce medical expenditures. Oh, well, progress . . .
Not sure what is proven and what isn't, but we do know that HDHP plans will continue, as will HSA accounts.
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Old 04-06-2013, 07:46 AM   #152
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OK, I'll add one more wrinkle for folks to consider. My family is currently on a high deductible plan that qualifies for an HSA account. The plan (incl. out of pocket costs) currently costs me around $5K/yr. I plan to enroll in a qualified silver ACA plan, which will probably cost around $14K/yr, but expect to receive about $9K in subsidies.

Although the net cost will be lower with the ACA plan, there are some finer points that make this narrower than you might think:

- giving up the HSA will cause me to lose around $1K/yr in tax savings
- I also lose the ability to harvest capital gains at 0% since I will be trying to keep my income as low as possible. Last year, I was able to harvest almost $50K in capital gains at 0%, so to me, this could potentially cost me $50K x 15% = $7.5K in future years depending on what happens with capital gains taxes in the future.

Finally, the decision to use an ACA plan is solely based on the expected tax subsidy - if there was no subsidy, I am guaranteed to be better off staying on my HSA plan, even if I hit my max out of pocket. So it's not simply a matter of maximizing my credit for something I would have bought anyways - it's actually impacting what I should be buying (expectexcept I won't know until after the fact!).

What a mess...
I believe that some HDHP/HSA-eligible plans will qualify for ACA subsidies so the first concern may be moot. In my case I am going to need to cut my 0% capital gains in half in order to stay under 400% FPL but the value of the lost subsidy is so large compared to the incremental capital gains that it is well worth it to me. YMMV.
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Old 04-06-2013, 10:12 AM   #153
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OK, I'll add one more wrinkle for folks to consider. My family is currently on a high deductible plan that qualifies for an HSA account. The plan (incl. out of pocket costs) currently costs me around $5K/yr. I plan to enroll in a qualified silver ACA plan, which will probably cost around $14K/yr, but expect to receive about $9K in subsidies.

Although the net cost will be lower with the ACA plan, there are some finer points that make this narrower than you might think:

- giving up the HSA will cause me to lose around $1K/yr in tax savings
- I also lose the ability to harvest capital gains at 0% since I will be trying to keep my income as low as possible. Last year, I was able to harvest almost $50K in capital gains at 0%, so to me, this could potentially cost me $50K x 15% = $7.5K in future years depending on what happens with capital gains taxes in the future.

Finally, the decision to use an ACA plan is solely based on the expected tax subsidy - if there was no subsidy, I am guaranteed to be better off staying on my HSA plan, even if I hit my max out of pocket. So it's not simply a matter of maximizing my credit for something I would have bought anyways - it's actually impacting what I should be buying (expectexcept I won't know until after the fact!).

What a mess...

california was allowed a 5000 deductible bronze plan. I assume that will be allowed all over the country.

its the one on the far right of the chart

http://www.coveredca.com/media/10748...risonChart.pdf
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Old 04-06-2013, 10:46 AM   #154
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Bronze level coverage requires an AV of 60% and total out of pocket is limited to $6350. This can be allocated to deductible and co-pay. This is also well within the limits for an HSA policy
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Old 04-06-2013, 11:03 AM   #155
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GM51/MB - Thanks for the responses. I'm glad to hear that I may be able to keep an HDHP as a Bronze option within the ACA. After some thought, however, I realized that the HSA portion is not very relevant for me under ACA. The reduction in income to achieve <400% FPL means that the HSA deduction does nothing for my federal taxes (which is already effectively 0% as all my income is CG and I'm in the 15% bracket), and California doesn't allow HSA contributions as a deduction anyways.

I did a little more research and found that, while the ACA tax credit applies to any type of ACA plan, it does not allow for cash back if you pick a plan that is cheaper than your ACA credit (I read discussion earlier in the thread about this, but wanted to check on my own):

How New Health Insurance Subsidies Will Work - The Best Life (usnews.com)

The relevant portion (the dollar amount below is tied to an example earlier in the article):

"While this tax credit is tied to a silver plan, the family is free to buy any plan in the exchange it can afford. Whatever the premium is for the plan, the family will be able to reduce its payment by the amount of its credit: $7,095.70. The only exception is that if it decides to buy a cheaper policy with total premiums of less than this amount, it will not get any money back."

So, if I decide to reduce my income to qualify for tax credits under ACA, it doesn't seem like there would be any benefit to selecting the bronze option (assuming the cost is somewhat comparable to what I pay now for my HDHP).

Which means, for me at least, it's still probably down to comparing costs/savings for:

- harvest CG at 0%, not qualify for ACA tax credits, purchase bronze exchange plan
or
- give up CG harvesting, qualify for ACA tax credits, purchase silver exchange plan

Lots of food for thought - and I'm sure there will be more details as October closes in...
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Old 04-06-2013, 11:10 AM   #156
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GM51/MB - Thanks for the responses. I'm glad to hear that I may be able to keep an HDHP as a Bronze option within the ACA. After some thought, however, I realized that the HSA portion is not very relevant for me under ACA. The reduction in income to achieve <400% FPL means that the HSA deduction does nothing for my federal taxes (which is already effectively 0% as all my income is CG and I'm in the 15% bracket), and California doesn't allow HSA contributions as a deduction anyways.

I did a little more research and found that, while the ACA tax credit applies to any type of ACA plan, it does not allow for cash back if you pick a plan that is cheaper than your ACA credit (I read discussion earlier in the thread about this, but wanted to check on my own):

How New Health Insurance Subsidies Will Work - The Best Life (usnews.com)

The relevant portion (the dollar amount below is tied to an example earlier in the article):

"While this tax credit is tied to a silver plan, the family is free to buy any plan in the exchange it can afford. Whatever the premium is for the plan, the family will be able to reduce its payment by the amount of its credit: $7,095.70. The only exception is that if it decides to buy a cheaper policy with total premiums of less than this amount, it will not get any money back."

So, if I decide to reduce my income to qualify for tax credits under ACA, it doesn't seem like there would be any benefit to selecting the bronze option (assuming the cost is somewhat comparable to what I pay now for my HDHP).

Which means, for me at least, it's still probably down to comparing costs/savings for:

- harvest CG at 0%, not qualify for ACA tax credits, purchase bronze exchange plan
or
- give up CG harvesting, qualify for ACA tax credits, purchase silver exchange plan

Lots of food for thought - and I'm sure there will be more details as October closes in...
not that i totally know your info-but not paying taxers is not the decider for subsidies- i also will be paying no taxes starting 2014

however the MAGI calculation will be close
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Old 04-06-2013, 12:58 PM   #157
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Doing my tax return, which shows my 1099-DIV forms add up to almost $70k.

So there is no easy way to manage to fit the income below the limits to be eligible for the subsidies, unless I switch my funds to those that have really minimal dividends and cap gains distributions.

But they're all low-cost index funds, Admiral shares of Wellsley and then Total Stock Market, a couple of international funds.

Of course, even if there are funds that have minimal dividend and cap gains, they probably are likely to have lower returns.

So there must be many others in the same boat, which might account for those who answered "No" to the poll.
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Old 04-06-2013, 04:01 PM   #158
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....Which means, for me at least, it's still probably down to comparing costs/savings for:

- harvest CG at 0%, not qualify for ACA tax credits, purchase bronze exchange plan
or
- give up CG harvesting, qualify for ACA tax credits, purchase silver exchange plan

Lots of food for thought - and I'm sure there will be more details as October closes in...
I guess it depends on how close you are to 400% FPL before capital gains.

I expect to be about 77% FPL before capital gains (qualified dividends - HSA contributions) so I can take ~50k of 0% capital gains a year and still stay within 400% FPL.

It seems my state will offer a silver plan that is HSA and ACA eligible that will be ~$225 a month (before subsidies) more than I pay now so I'll probably go with that. After subsidies, I expect to pay about ~$135/month less than I pay now with broadly similar deductibles and OOPMs.

The lost subsidy above 400% FPL makes it very costly for me to harvest gains that cause me to go above 400% FPL, even at 0% federal income tax.

If I took additional gains to being me to the end of the 15% bracket, even though my CG tax would be zero, my lost subsidy would be ~39% of the incremental gains (plus some stat tax effects that would puch the incremental cost to ~50% of the incremental gains).
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Old 04-06-2013, 04:38 PM   #159
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I expect to be about 77% FPL before capital gains (qualified dividends - HSA contributions) so I can take ~50k of 0% capital gains a year and still stay within 400% FPL.
. . . .
The lost subsidy above 400% FPL makes it very costly for me to harvest gains that cause me to go above 400% FPL, even at 0% federal income tax.

If I took additional gains to being me to the end of the 15% bracket, even though my CG tax would be zero, my lost subsidy would be ~39% of the incremental gains (plus some stat tax effects that would puch the incremental cost to ~50% of the incremental gains).
So, as a practical matter, what do we think is a good way to approach "the line" without going over? Unfortunately, lots of decisions (e.g. how much CG to take at 0% taxes) have to be made before 31 December, and we don't have full info on all our income sources by that time. One post-Dec fine-tuning mechanism available to us is tIRA-to-Roth recharacterizations.

So, it might work like this:
- Mid December: Estimate "can't help it" income from employment, taxable interest, SS, pensions, etc.
- Subtract carried-over losses, deductions, exemptions to determine headroom before hitting "the cliff" (which might be 400% of FPL for those getting health insurance subsidies, or top of the 15% bracket for those not getting subsidies)
- Harvest CG to reset the basis in appreciated shares held in taxable accounts. Do this only up to a safe buffer zone below "the cliff" to assure the subsidy isn't jeopardized.
- Then convert tIRA to Roth IRA up to "the cliff", or even beyond it.
- After all the 1099s are received and we are ready to file taxes, recharacterize that portion of the tIRA-to_Roth that ends up being in excess of "the cliff."

Sound close?
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Old 04-06-2013, 05:16 PM   #160
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Sound close?
You're hired. Oh, wait, that's a "bad word" on this site. Or in December just key it all into an early version of TaxCut (or HR Block blah blah, whatever they renamed it to) and let that determine the tIRA conversion. I bet that the TaxCut people are already working on the "interview" screens for telling you you'll get socked in the gut if you make $1 over the 400% FPL.
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