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Old 06-12-2015, 03:41 PM   #41
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I realize this is anecdotal, but here is an example of ACA not working. A friend of mine was complaining that his HI premium was going to increase from $400/month to $800/month in 2014. So he dropped his HI. He also mentioned that he had to pay a $900 penalty for 2014. With a 1% of income penalty, I estimate his MAGI at 90k. I have told him that the penalty will go up for the 2015 tax year. He was already aware of this. As background, He and his wife are self employed. They are both in their mid 50s. They are both pretty healthy and don't smoke.

He's in a bad spot income wise, too much for subsidies and too little for the premium to still be a significant part of his income.

I don't know what to tell my friend. I wish he and his wife would get HI. But, I can't be pushy about it. I just hope they don't get sick or injured.

Thanks for listening.
Boy, that's taking a risk. Especially considering that for the self-employed, health insurance premiums are tax deductible so that $400 extra a month gets significantly reduced. Figure in the tax penalty for not having insurance and their net out of pocket looks even better with the insurance. If it were me, I'd do everything to squeeze out the extra bucks to be insured especially at that age when your odds of serious illness dramatically increase. I'd even consider diverting some retirement contributions into offsetting the insurance cost if I had to. I'd also look closely at what bronze plans are available to perhaps reduce the cost further.
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Old 06-12-2015, 03:46 PM   #42
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I doubt the law says you can opt out penalty free if your rates are too high.
Actually, it does. It sets a percentage of income threshold for the premium above which you wouldn't be liable for the penalty if you opted not to pay for insurance. Of course, very few were ever expected to get that exemption due to the subsidies but if they are gone, then lots more will be exempt from the penalty.
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Old 06-12-2015, 04:22 PM   #43
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Boy, that's taking a risk.
Ian, I agree. I forgot to add, she's in the health care industry.

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I'd even consider diverting some retirement contributions
I don't know that they are making retirement contributions.
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Old 06-12-2015, 06:15 PM   #44
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I realize this is anecdotal, but here is an example of ACA not working. A friend of mine was complaining that his HI premium was going to increase from $400/month to $800/month in 2014. So he dropped his HI. He also mentioned that he had to pay a $900 penalty for 2014. With a 1% of income penalty, I estimate his MAGI at 90k. I have told him that the penalty will go up for the 2015 tax year. He was already aware of this. As background, He and his wife are self employed. They are both in their mid 50s. They are both pretty healthy and don't smoke.
I hope that they understand that there is no "free" medical care available through ERs. That is such a common misunderstanding, even for people who aren't political.

Your friends might be able to qualify for a catastrophic care policy despite their age as the rules have been loosened and if they have not shopped through their exchange (or the federal exchange), then they should. We got one of those letters the first year from our (then) insurance company about our soon to rise premium, but we said buh-bye!
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Old 06-12-2015, 06:24 PM   #45
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I think the point was that the law would no longer be in effect.
Why would you think that? They are just determining subsidies for some states... the rest of the law would still be the law...
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Old 06-12-2015, 06:28 PM   #46
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IF the Supreme Court agrees with King about the "four little words," and the subsidies are barred for federal exchanges, I think there's little doubt that many states will quickly work with the federal government to put their state logos on the federal website and do whatever cosmetic steps need to be done to satisfy the letter of the law--making the exchanges "theirs". Their residents will receive subsidies when they go to the exchanges.

Some states will not go along with this. Those presently insured through their employers would remain largely unaffected (except the employer mandate would go away, but most people who get insurance through their employers post ACA already got it that way pre-ACA), all insured through Medicare and Medicaid would remain unaffected. I'd imagine in these states a new market in "non-ACA compliant" high deductible policies would make it possible for many people now on the exchanges to remain insured at reasonable costs. But there will be a lot of people falling through the cracks (esp the sick). This will increase the costs and probably build pressure for those states to establish ACA exchanges or for establishment of an alternate framework from Washington that allows the federal money (paid in part by the residents of those states) to flow to those states and provide benefits. And that "alternate framework" might provide a vehicle for many state laboratories on ways to deliver high-quality care at lower costs. I doubt that anyone thinks the "old way" or ACA is optimum, so we agree there's room for improvement. We can bet Oregon will take a different road than Texas, and maybe we'll figure some things out that benefit everyone.

But we'll know soon if all this thought is wasted effort. Regardless of the result, I don't think there is cause for panic.
Just pointing out a flaw in this thinking...

I was reading that the states had a certain amount of time to establish their exchange and that time has past.. IOW, they cannot just label the Fed site theirs and get the subsidies.....

So, if they decide that the subsidies are not allowed in the states without exchanges there is nothing that can be done under current law.... they will have to pass something allowing them through the federal exchange or give the states more time to establish....

Just a question... does the state have to offer the increased medicaid if they establish an exchange? I thought that was one of the reasons some states did not go along...
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Old 06-12-2015, 06:56 PM   #47
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I was reading that the states had a certain amount of time to establish their exchange and that time has past.. IOW, they cannot just label the Fed site theirs and get the subsidies.....
IIRC, the deadline was for the states to get federal >funding< to establish their exchanges. They can still set them up. It would be tougher in the 8 states that have passed laws expressly forbidding the state establishment of an exchange . . .

Anyway--we've seen many instances so far that demonstrate the executive branch has a great deal of "flexibility" in implementing the law. (employer mandate deadline moved, etc, etc). I think money would be found, there would be a tremendous desire to make that work.

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Just a question... does the state have to offer the increased medicaid if they establish an exchange? I thought that was one of the reasons some states did not go along...
I'm pretty sure all the states that established exchanges also wanted the Medicaid expansion anyway, I don't recall anyone testing the waters on this. The SCOTUS decision was fairly explicit in saying the states couldn't be bludgeoned into accepting the Medicaid expansion. And we know, as a practical matter, that the subsidies can be de-linked from expanded Medicaid and made to work, as it's being done on the federal ACA exchanges in states without the expansion.
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Old 06-12-2015, 09:22 PM   #48
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We are WA state residents right now and so technically would not be directly affected by this since WA has a state run exchange.

Were I in a state using a federal exchange and denied a subsidy by this ruling, I would expect to be able to go without insurance with no penalty, since our MAGI would be $23k and 8% of that is $1840 (nobody will give us a year of ACA qualifying insurance for $150 a month for a mid 40s couple unsubsidized).

I would then have to think about how to beat the system in the event we had a medical issue. The current law allows you to enroll at any time if you change residency. Since we are traveling the country in our RV, we could technically change residency at any time just by driving to a new state and registering our vehicles, apply for a DL, stuff like that. I wouldn't do it for a broken leg, but maybe if one of us was facing 8 uninsured months in the hospital while we were waiting on a new open enrollment period...

Sounds messy. I just want to be able to buy a catastrophic policy and self insure for the small stuff (if all of the subsidized plans go away).
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Old 06-12-2015, 09:34 PM   #49
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Sounds messy. I just want to be able to buy a catastrophic policy and self insure for the small stuff (if all of the subsidized plans go away).
The tricky bit there is that without the ACA, if you develop a pre-existing condition like, say, "old age", your premiums even for catastrophic coverage go the roof again. I live in a very consumer oriented state, but for those who live in a more business oriented state, things can get dicey.
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Old 06-12-2015, 09:50 PM   #50
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The tricky bit there is that without the ACA, if you develop a pre-existing condition like, say, "old age", your premiums even for catastrophic coverage go the roof again. I live in a very consumer oriented state, but for those who live in a more business oriented state, things can get dicey.
True. That is why I said this was messy. No clear cut good choice for early retirees with pre-existing conditions if ACA goes away.

We currently do not have any existing medical conditions but I am sure there are people who have retired under ACA rules who do. I do not know what they would do.
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Old 06-12-2015, 09:58 PM   #51
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Originally Posted by InTheSticks View Post
I realize this is anecdotal, but here is an example of ACA not working. A friend of mine was complaining that his HI premium was going to increase from $400/month to $800/month in 2014. So he dropped his HI. He also mentioned that he had to pay a $900 penalty for 2014. With a 1% of income penalty, I estimate his MAGI at 90k. I have told him that the penalty will go up for the 2015 tax year. He was already aware of this. As background, He and his wife are self employed. They are both in their mid 50s. They are both pretty healthy and don't smoke.

He's in a bad spot income wise, too much for subsidies and too little for the premium to still be a significant part of his income.

I don't know what to tell my friend. I wish he and his wife would get HI. But, I can't be pushy about it. I just hope they don't get sick or injured.

Thanks for listening.

If he is hell bent on not buying health insurance, tell him to relax. Effectively THERE IS NO PENALTY for not having health insurance. There are many ways to get exempted which he may qualify for but the one that trumps all is this......Do not have a tax refund. This is the only way they can seek recourse in payment is by confiscating your tax refund. They cannot garnish your wages or take you to court.
I have already been screwed over many times by this Act (others have benefitted greatly I am aware of, but not me) and if a death spiral occurs, I assure you I will not be the last healthy person paying with all the unhealthy people. And I sure as hell ain't paying the penalty if I don't have the insurance as the law was basically written intentionally only for dumb people to pay the tax.


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Old 06-13-2015, 06:00 AM   #52
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Why would you think that? They are just determining subsidies for some states... the rest of the law would still be the law...
My understanding is that the financial model hinges on nationwide participation (everyone being insured).

If the subsidies end, many people will go back to being uninsured. The law would collapse under its own weight.

Having said that, I could be misinformed; there seems to be a lot of misinformation about how this all works....
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Old 06-13-2015, 10:46 AM   #53
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My understanding is that the financial model hinges on nationwide participation (everyone being insured).

If the subsidies end, many people will go back to being uninsured. The law would collapse under its own weight.

Having said that, I could be misinformed; there seems to be a lot of misinformation about how this all works....
I would agree that the law as written would be difficult for some to afford insurance.... and many insurance companies would opt out of providing plans.... but the law will not be repealed by the decision.... it will still be 'the law'.... it cannot technically collapse under its own weight... someone will have to actually repeal the law or make changes to it so it works....
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Old 06-13-2015, 11:04 AM   #54
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Legally, each state is a separate insurance market. So, an insurance policy offering in Connecticut, for example should be completely unaffected by anything happening, for example, in the insurance market in Texas.
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Old 06-13-2015, 11:21 AM   #55
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Legally, each state is a separate insurance market. So, an insurance policy offering in Connecticut, for example should be completely unaffected by anything happening, for example, in the insurance market in Texas.
But, if sick people do as Fermion has suggested--flow from non-exchange states to those that have state-run exchanges, it could conceivably have an impact. As a practical matter, I don't think there will be enough of this to have a huge impact, but it could make those "lifeboats" take on more water, even if it doesn't sink them.
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Old 06-13-2015, 11:48 AM   #56
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But, if sick people do as Fermion has suggested--flow from non-exchange states to those that have state-run exchanges, it could conceivably have an impact. As a practical matter, I don't think there will be enough of this to have a huge impact, but it could make those "lifeboats" take on more water, even if it doesn't sink them.
This is getting a bit hypothetical for me. Setting up new state residency is not always simple or quick, we haven't seen that happen for Medicaid.

We are speculating what insurance companies will do. Their business is to sell policies and this uncertainty must be a serious challenge to their business model. Even though cross policy subsidization is not allowed, some of them may have done so anyway and this only further complicates their strategy for 2016.
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Old 06-13-2015, 03:23 PM   #57
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But, if sick people do as Fermion has suggested--flow from non-exchange states to those that have state-run exchanges, it could conceivably have an impact. As a practical matter, I don't think there will be enough of this to have a huge impact, but it could make those "lifeboats" take on more water, even if it doesn't sink them.

I would think this will not happen.... welfare is different in the states... and people do not seem to move to the states with the best welfare system just to get more money....

And then the cost of living in the new state might be much higher than the old state....


I still think that the insurance companies will continue to sell policies... as long as they are making a profit they have no reason to stop... you do not have to buy a policy through the exchange.... that is only if you want the subsidy...

A lot of speculation for something that might not happen... and if it does happen I bet there will be a fix... and if neither of these things happen... it will be awhile before the crash and burn.... so I got time on my side to worry about what to do later...

So far today is a good day so I will not worry...
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Old 06-13-2015, 04:51 PM   #58
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I haven't seen this mentioned yet. Does anyone know if our subsidies received so far this year would have to be paid back if the SC rules against them? Say I received a $300/mo subsidy Jan-Jun then the SC rules against them, does that just affect things from that date on or for the whole year, or not until next year's enrollment? I don't want to pay back $1800. That's more than 10% of my income.
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Old 06-13-2015, 07:10 PM   #59
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Some additional 2016 rate data is now available.

More here: (PDF) http://avalere-health-production.s3....ts_revised.pdf

Attachment 21885

LCS is the Lowest Cost Silver plan. SLS refers to the Second Lowest Silver plan.
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Old 06-13-2015, 08:17 PM   #60
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I haven't seen this mentioned yet. Does anyone know if our subsidies received so far this year would have to be paid back if the SC rules against them? Say I received a $300/mo subsidy Jan-Jun then the SC rules against them, does that just affect things from that date on or for the whole year, or not until next year's enrollment? I don't want to pay back $1800. That's more than 10% of my income.
Nobody can answer this question until there is a ruling... one Justice suggested that they delay the ruling until the end of the year (I would assume if they ruled against them)....

That would make it seem that you would not have to pay back anything you have received... but there could be a big surprise....
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