Poll: Who's going to try to get ACA subsidies by staying under the threshold?

[RunningBum]

Also try to limit or eliminate state tax refunds. Those show up on line 10 of 1040 and therefore are part of MAGI. A Roth recharacterization is likely to result in a refund, so it may not be to your advantage to go over the edge and recharacterize back. It won't affect the current year but it will the following year.

[pb4uski]

Quote:

Originally Posted by samclem .....Sound close?

Yes, except remember that we're talking about keeping O-MAGI less than 400% FPL, so exemptions and itemized deductions are not include in O-MAGI.

It would include Form 1040 AGI + any foreign earned income exemption + tax-exempt interest + and non-taxable SS.

My plan is to essentially do an estimated return in December and take gains for 400% FPL - estimated O-MAGI based on everything I know - $1,000 and cross my fingers. I could instead fill up with $5,000 or so of Roth conversion and recharacterize any excess once I complete my return.

[pb4uski]

Quote:

Originally Posted by RunningBum Also try to limit or eliminate state tax refunds. Those show up on line 10 of 1040 and therefore are part of MAGI. A Roth recharacterization is likely to result in a refund, so it may not be to your advantage to go over the edge and recharacterize back. It won't affect the current year but it will the following year.

True, but you'll know the amount of any prior state income tax refunds to add back if you itemized the prior year so I don't see "income" from prior year refunds as being problematic.

[gerrym51]

One thing to be careful of.

the states will base the value on the silver plan in your area that is the second lowest priced.

if you pick a silver plan but it is more expensive the the 2nd lowest priced you will have to pay the difference between say 2nd lowest and 4 th lowest also.

say their are 10 silver plan providers

1, 100 a month
2,200
3 300
4 400
5 500
6 600
7 700
8 800
9.900
10. 1000

I don't think there will be that much difference between silver providers-i used big round numbers. but say #2 provider 200 anonth and you pick #5 500 a month you will also have to pick up difference between 2 and 5.

just another thing to think about

[RunningBum]

Quote:

Originally Posted by pb4uski True, but you'll know the amount of any prior state income tax refunds to add back if you itemized the prior year so I don't see "income" from prior year refunds as being problematic.

Sure, you'll know it, but if you leave yourself a large state refund, it cuts into the Roth conversion that you can do. Or if you're on the edge with a conversion as I am, a big refund can send you over the cliff.

[gerrym51]

another issue to be aware of. Exchange plans in order to be as inexpensive as possible are allowed by federal government to have only 1 prescription drug available per class. unless your state establishes their own exchange they will have no control of this.

Prescription Drug Prices Coverage Under Obamacare


http://healthblog.ncpa.org/navigatin...amacare-rules/


Separate rules apply to coverage for prescription drugs. For each therapeutic category or class of prescription drugs (for example, as defined by the United States Pharmacopeia or USP), health plans must cover the greater of one drug per class or category, or the same number of drugs per class or category as covered by the benchmark plan. Drugs in a class or category must be therapeutically distinct (for example, different doses of the same drug are counted as one drug, as are brand drugs and their generic equivalents.)



some states are trying to overcome this flaw-they all have own exchanges


http://thinkprogress.org/health/2012...han-obamacare/

[MichaelB]

Quote:

Originally Posted by gerrym51 Exchange plans in order to be as inexpensive as possible are allowed by federal government to have only 1 prescription drug available per class. unless your state establishes their own exchange they will have no control of this.

The PPACA mandates a series of "essential health benefits" and requires every eligible policy to have at least one drug in every category. That does not mean plans will only have one drug per category and has nothing to do with who runs the exchange.

[gerrym51]

Quote:

Originally Posted by MichaelB The PPACA mandates a series of "essential health benefits" and requires every eligible policy to have at least one drug in every category. That does not mean plans will only have one drug per category and has nothing to do with who runs the exchange.

no -but it does mean mroe restrictive formularies of drugs.

when you buy a ppaca plan make sure

1.doctor is in it
2. local hospitals are in it.
3. drug(s) you use are in it.

seems prudent to me.

[MichaelB]

Quote:

Originally Posted by gerrym51 no -but it does mean mroe restrictive formularies of drugs.

You are using your own interpretation and calling it fact. We will not know if this is the case until the plans are available on the exchanges.

[gerrym51]

Quote:

Originally Posted by MichaelB You are using your own interpretation and calling it fact. We will not know if this is the case until the plans are available on the exchanges.

michael,

go to this link on california plans. look at the plans on right. 2nd to right 20 dollar co-pay for GENERICS. far right 25 dollar co-pay for generics i just recently semi-retired as a pharmacist.

In all my years i have never seen more than a 10 dollar co-pay for generics. Most of the people on this board if they qualify will probably get get this for subsidy. and those co-pays start after rx deductible..
http://www.coveredca.com/PDFs/Englis...itsSummary.pdf



i'm sure most if not all generics for these plans will be covered. i'm also sure brands that have generics will not be covered and you will have to get your doctor to fight with your insurance.

brands that don't have generics yet-since most new drugs are just me to drugs of same therapeutic catagories will not be covered. good luck getting an approval for nexium or crestor this happens on some insurances now but the more Value networks rarely get approvals


in the insurance companies defense they had to submit based on plan decided by california exchange wth california setting the copays. it would have made sense (at least to me) to raise the co-insurance parts to 25 percent from 20 and decrease the generic rx copays to 10 dollars. or increase the brand rx dedictible and decrease the generic co pay. these plans are not as good as they seem

[MichaelB]

The link says nothing about restricting drugs by class or category or more restrictive formularies. It has nothing to do with drug availability, which was your earlier post.

Isn't drug co-pay part of actuarial value? Higher co-pays mean lower deductibles, and vice-versa? The overall expected cost of the plan does not change.

[gerrym51]

Quote:

Originally Posted by MichaelB The link says nothing about restricting drugs by class or category or more restrictive formularies. It has nothing to do with drug availability, which was your earlier post. Isn't drug co-pay part of actuarial value? Higher co-pays mean lower deductibles, and vice-versa? The overall expected cost of the plan does not change.

insurances use co-pays to affect usage. the higher the co-pay the lesser the use. a 25 dollar copay for a generic IS a very high price especially if you have to fill it every month.

[kevink]

I guess it's another poll since the option wasn't included on this one, but surely there must be folks who'll keep their AGI low enought not just for subsidies but for Medicaid eligibility. If you're a childless single or couple living solely off off assets in a tax-efficient portfolio and have a modest lifestyle that looks quite do-able.

[gerrym51]

Quote:

Originally Posted by kevink I guess it's another poll since the option wasn't included on this one, but surely there must be folks who'll keep their AGI low enought not just for subsidies but for Medicaid eligibility. If you're a childless single or couple living solely off off assets in a tax-efficient portfolio and have a modest lifestyle that looks quite do-able.

medicaid eligibility means medicaid networks. lower co-pays-but tougher to find providers.

1.make sure doctor in it
2. generics in my experience always covered. brands with generics never covered. some classes of drugs excluded.
3. as far as i know all hospitals are in medicaid

[Z3Dreamer]

I estimate my income at 200% FPL and receive the appropriate subsidy and low deductible plan. I am a heavy user. At year end I get those unintended, unknown Cap Gain distributions. Oh, golly, I owe the difference between the 350% FPL and 200% FPL premiums. But do I get to keep the savings of being on a low deductible, low copay plan? I don't see how they will deal with this, although anything is possible.

[gerrym51]

Quote:

Originally Posted by Z3Dreamer I estimate my income at 200% FPL and receive the appropriate subsidy and low deductible plan. I am a heavy user. At year end I get those unintended, unknown Cap Gain distributions. Oh, golly, I owe the difference between the 350% FPL and 200% FPL premiums. But do I get to keep the savings of being on a low deductible, low copay plan? I don't see how they will deal with this, although anything is possible.

i think they make adjustmants in the following years' tax form

[pb4uski]

Quote:

Originally Posted by Z3Dreamer I estimate my income at 200% FPL and receive the appropriate subsidy and low deductible plan. I am a heavy user. At year end I get those unintended, unknown Cap Gain distributions. Oh, golly, I owe the difference between the 350% FPL and 200% FPL premiums. But do I get to keep the savings of being on a low deductible, low copay plan? I don't see how they will deal with this, although anything is possible.

In the tax form for the year in question you would need to pay back to the government the excess of the subsidies you received (based on 200% FPL) and the subsidies you deserved (based on 350% FPL). So if this happened in 2014, the payment would accompany your 2014 tax return filed in 2015.

[Z3Dreamer]

But what about the difference in co-pays and deductibles? Your responses to my question were only addressing the subsidy, but those with higher subsidies also receive less out of pocket. This cannot possibly be addressed on a tax return. Only the subsidy can be addressed.

[Z3Dreamer]

From the "Covered California" chart, a couple at 400% FPL should pay roughly $6,000 net ($491 times 12). 200% is about $2,000 ($163 times 12). So if I underestimate my income I must pay $4,000 on my tax return. Lets say that during the year, I had so much in claims that I hit the Maximum OOP of $4,500. I should have had a Maximum OOP of $12,800. How does that get refunded. The government already collected their subsidy overpayment from me at tax time. Do I get to keep that extra $8,300?

[MichaelB]

Quote:

Originally Posted by Z3Dreamer But what about the difference in co-pays and deductibles? Your responses to my question were only addressing the subsidy, but those with higher subsidies also receive less out of pocket. This cannot possibly be addressed on a tax return. Only the subsidy can be addressed.

The only thing that is reconciled is the premium / subsidy you are expected to pay. Everything else is included.