Will the new healthcare law make it easier for me to retire early?

[MichaelB]

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Originally Posted by TromboneAl Thanks. When it says "Your maximum out-of-pocket costs for deductibles and co-payments would be capped at 27% of the total cost." what does "total cost" refer to?

See here

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What is actuarial value and how does it affect premiums? The actuarial value of a health insurance policy is the percentage of the total covered expenses that the plan would, on average, cover. For example, a plan with a 70% actuarial value means that consumers would on average pay 30% of the cost of health care expenses through features like deductibles and coinsurance. The amount that consumers pay would vary substantially by the amount of services they use. The current Congressional health reform bills specify benchmark levels of coverage for the purposes of premium subsidies using actuarial values. Under both the House and Senate bills, as well as the President's proposal, subsidies would be tied to plans with an actuarial value of 70%, with additional assistance provided for cost sharing based on income (with amounts varying among the proposals). Insurers would have to cover a defined set of health care services and cap the total amount of cost sharing required of consumers at defined levels, but could otherwise vary the structure and degree of cost sharing so long as minimum actuarial value thresholds are met. The illustrative premiums used in the calculator are estimated based on 2009 costs for a single 40 year old, and vary by actuarial value as follows: $2,850 for a 60% actuarial value plan and $3,500 for 70%. Frequently Asked Questions Health Reform Subsidy Calculator -- Premium Assistance for Coverage in Exchanges/Gateways

Can't get any more clear than that

[Rustic23]

I see what it says, now anyone want to take bets on when they will amend the bill to exclude them?

[ERD50]

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Originally Posted by MichaelB Quote: section 1312: the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are (I) created under this Act (or an amendment made by this Act); or (II) offered through an Exchange established under this Act (or an amendment made by this Act). Well, for sure, members of congress. All Federal employees - not sure.

But w/o reading through x,xxx pages, how do we know that there is not some 'special' plan 'created under this Act' just for Congress?

-ERD50

[Rustic23]

Erd50,
It's that last (or an amendment made by this Act)

[FinanceDude]

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Originally Posted by citrine Hopefully from the inflated salaries that the CEO's and higher management have....the pharma company can afford the $90 billion.

Uh ok.........

[MichaelB]

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Originally Posted by ERD50 But w/o reading through x,xxx pages, how do we know that there is not some 'special' plan 'created under this Act' just for Congress? -ERD50

Uh - you only have to read section 1312. Specifically pages 157 and 158.

[donheff]

I read somewhere in this thread (I believe it was here - search doesn't seem to work) that AT&T is posting a big accounting hit to pay for its costs under the health care bill. I expect that real problems of this sort will come up but I also expect them to get distorted to "prove" problems with the legislation that are not real. I just read his about the AT&T maneuver that is being exploited in that fashion:

"Under the 2003 Medicare prescription drug program, companies that provide prescription drug benefits for retirees and employees have been able to receive subsidies covering 28 percent of eligible costs. AT&T got $1.3 billion in government subsidies - meaning they spent roughly $4.64 billion on prescription drug benefits. Under the 2003 law, they could deduct from their taxes the entire amount they spent, PLUS the subsidy. So in addition to the $1.3 billion they got from the government to help pay for retiree drug benefits, they wrote off $5.94 billion on their taxes. The new law states that they can now only deduct the amount they actually spend. So, what AT&T did yesterday was make a NON CASH accounting charge against a perceived future loss of tax deductions through Medicare subsidies.

So the awful "problem" with the bill in this case is that one form of socialized, big-gov health care largess that the complainers would never support in the first place has been taken off the table and companies (correctly, in my view) reflect that on their statements.

[samclem]

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Originally Posted by donheff I read somewhere in this thread (I believe it was here - search doesn't seem to work) that AT&T is posting a big accounting hit to pay for its costs under the health care bill. . . So the awful "problem" with the bill in this case is that one form of socialized, big-gov health care largess that the complainers would never support in the first place has been taken off the table and companies (correctly, in my view) reflect that on their statements.

AT&T, Caterpillar, Verizon, and John Deere are among the companies taking large charges against future earnings ($1 billion in the case of AT&T). The practice appears to be in compliance with existing accounting rules (and all of us should, given recent experience, appreciate it when companies are honest about their financial condition).

What's NOT "cricket" in my view, is Henry Waxman's response. He (and Congressman Stupak--hmmm) are demanding that the companies show up before a congressional committee and explain why they took these write-downs. They also are supposed to bring copies of any internal company emails seen by senior management that addressed the costs of the new law to their companies. Message: If a company does something that may reflect adversely on this new law, expect to be hauled before Congress for a public dressing-down and to have your company's communications scrutinized. Very subtle. Personally, I'm a little surprised at this move, as many in Congress are very eager to change the subject as quickly as possible.

If I were one of these CEOs, I'd wait for the subpoena.

[donheff]

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Originally Posted by samclem What's NOT "cricket" in my view, is Henry Waxman's response. He (and Congressman Stupak--hmmm) are demanding that the companies show up before a congressional committee and explain why they took these write-downs.

This does seem dumb. I agree that the companies should take the write-downs. I just don't think the other side's portrayal was fair. From Waxman's behavior I suspect my side's portrayal is going to be even worse

[FinanceDude]

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Originally Posted by donheff I read somewhere in this thread (I believe it was here - search doesn't seem to work) that AT&T is posting a big accounting hit to pay for its costs under the health care bill. I expect that real problems of this sort will come up but I also expect them to get distorted to "prove" problems with the legislation that are not real. I just read his about the AT&T maneuver that is being exploited in that fashion: "Under the 2003 Medicare prescription drug program, companies that provide prescription drug benefits for retirees and employees have been able to receive subsidies covering 28 percent of eligible costs. AT&T got $1.3 billion in government subsidies - meaning they spent roughly $4.64 billion on prescription drug benefits. Under the 2003 law, they could deduct from their taxes the entire amount they spent, PLUS the subsidy. So in addition to the $1.3 billion they got from the government to help pay for retiree drug benefits, they wrote off $5.94 billion on their taxes. The new law states that they can now only deduct the amount they actually spend. So, what AT&T did yesterday was make a NON CASH accounting charge against a perceived future loss of tax deductions through Medicare subsidies. So the awful "problem" with the bill in this case is that one form of socialized, big-gov health care largess that the complainers would never support in the first place has been taken off the table and companies (correctly, in my view) reflect that on their statements.

Can't companies do what they want under the current accounting laws? Non-cash accounting charges go on all the time in large firms....... Should Congress mandate they can't do anything that "might" make the Bill look less rosy? Seems like a dumb witch hunt to me, with Stupak and Waxman leading the charge. One would think Stupak should keep a VERY LOW profile these days........

[Westernskies]

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Originally Posted by samclem If I were one of these CEOs, I'd wait for the subpoena.

...and then fly in on the company jet.

[MichaelB]

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Can't companies do what they want under the current accounting laws? Non-cash accounting charges go on all the time in large firms.......

I think they were just trying to make a point.

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Should Congress mandate they can't do anything that "might" make the Bill look less rosy? Seems like a dumb witch hunt to me, with Stupak and Waxman leading the charge.

So were they.

It's like having kids at home all over again.

[donheff]

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Originally Posted by FinanceDude Can't companies do what they want under the current accounting laws? Non-cash accounting charges go on all the time in large firms....... Should Congress mandate they can't do anything that "might" make the Bill look less rosy? Seems like a dumb witch hunt to me, with Stupak and Waxman leading the charge. One would think Stupak should keep a VERY LOW profile these days........

Lets be balanced. Waxman, in a move new to me, may be on a dumb witch hunt if the companies are simply taking a charge that is allowed, as it appears to me they are doing. But the first people out of the box were on the other side of the hunt, making this simple write off seem like something it wasn't.

[FinanceDude]

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Originally Posted by donheff Lets be balanced. Waxman, in a move new to me, may be on a dumb witch hunt if the companies are simply taking a charge that is allowed, as it appears to me they are doing. But the first people out of the box were on the other side of the hunt, making this simple write off seem like something it wasn't.

So they are making a political statement? I wouldn't equate it to a Tea Party demonstration or a protest. There is a chance that some of the folks at those big corps are smarter than the govt folks () and maybe they are taking their medicine before things get really ugly..........

Since when is it the business of Congress to meddle in the affairs of folks that are not under TARP and broke no rules we know of? Not everyone thinks the new health bill is a cornucopia........trotting those Fortune 500 CEOs up there may make Congress look even dumber, if that is possible..........

[FinanceDude]

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Originally Posted by Westernskies ...and then fly in on the company jet.

I would ask for fighter escort, A la Nancy Pelosi..........

[donheff]

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Originally Posted by FinanceDude So they are making a political statement? I wouldn't equate it to a Tea Party demonstration or a protest. There is a chance that some of the folks at those big corps are smarter than the govt folks () and maybe they are taking their medicine before things get really ugly..........

Lets drop this one. I am not sure we are even talking about the same thing. I was not talking about corporations making a statement. I agree they should take the write off. I was talking about politicians latching onto corporation write offs to assert that the new health care bill was drastically bashing those corporations' bottom line.

[Westernskies]

I am guessing the root cause of the concerns swirling around the health care bill- and how it affects to people's ability to ER is the billions of dollars in costs- since we just added 32 million people to the medical rolls- is- Who is going to pay for it?

1. Taxpayers (hence the wide-spread angst over this bill. We've all seen Congressional fuzzy math before.)

2. Employers- (hence the preemptive write-offs to cover their anticipated out-of-pocket costs and employees who will be clamoring for raises to make up for their drop in take-home pay.) I think taking the write-offs now is good business acumen - if you have a future liability staring you in the face, better start stockpiling cash now to address it head-on. Proactive beats reactive.

3. Health Insurance Companies - (hence the massive rate hikes just before the bill was enacted) now will be making decisions not based on sound business principals, but based on criteria set up by folks who aren't paying the bills. If they deny coverage for any reason, the Congress-critters will have a media event; the expectation is that they aren't in business to make money but to administer medical welfare programs. Sure, they just got lots of new customers- but are they customers they can afford to do business with?

The money has to come from somewhere. People and companies are justifiably concerned about how this bill is going to impact their wallets and bottom line. For everyone who thinks that this bill will make it easier to ER because of increased access to medical coverage, there is someone else concerned that their ability to save for ER has been impacted.

[oliverdickens]

Hi, many have said if you have insurance from a former employer you are not eligible for subsidy.

How about this situation:

Income is at $42,000
Family of 2, so limit on income is $58,000
By 2014, will be paying about $1000 per month to be part of my former employer self insured insurance plan

Question: Will I be eligible for some subsidy?

Question: In 2014 can I shop for insurance on exchange and perhaps get a better deal than with employer plan? Any restrictions?

Question: Is income based only that which is taxed now? Can I lower income by being in tax free vehicles, such as muni's etc. and thus increase amount of subsidy?

Really would appreciate boards thoughts on these questions.

Thanks

[regnig]

there is a provision (sec 1102 ) that will give your current employer a tax benefit if they continue to pay a portion of your health care..if you leave your job at 55, You have to be 55 , but it does guarantee one form of continuing health insurance at a known cost. It expires when you are eligible for Medicare. I guess it's like bridge reasonable health insurance . they are caling it the reinsurance clause. makes me feel a little safer that i can know the expense.

there will be other forms of insurance availble at better rates. just not until 2014.

[FUEGO]

I wonder what effect this law will have on existing individual policy premiums? Specifically the provisions restricting insurers from excluding pre-existing conditions and not charging different premiums based on health status.

My parents in-law pay out of pocket for their health insurance and they are still 4-8 years from medicare eligibility. I think they are currently paying around $700/month total for very basic coverage. If the premiums go up significantly, then they will likely go bare until 2014 when they can get medicaid coverage.