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Old 08-20-2016, 09:25 AM   #21
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I'd say the odds were about as good as finding a pulled pork sandwich in Mecca.


heh heh - I need to remember that one - for future use.
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Old 08-20-2016, 09:26 AM   #22
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My understanding is the reason some are pulling out of the ACA is because of the high healthcare costs. I don't think subsidies are a problem. The problem is insurers can't afford to pay the over inflated costs that hospitals charge. That is a problem that will be difficult to solve. I think retired millionaires getting subsidies is a relatively small issue that will likely fly under the radar indefinitely.
But don't the insurers submit THEIR rates to state regulators for approval and also conduct negotiate with in network hospitals for payment rates for the following year? Problem seems to be that less efficient players are having trouble competing in a transparent marketplace.

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Old 08-20-2016, 09:30 AM   #23
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I would be more concerned with the 400% of MAGI cutoff for subsidies being lowered rather than a wealth/asset measure being applied

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Old 08-20-2016, 09:35 AM   #24
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Please leave partisan and election comments out of the discussion.
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The talk by both parties is more focused on controlling healthcare and drug costs (that isn't political right? both parties are talking about it).
Good example of both partisan and election. Now that it's out there for everyone to see, we can drop it completely.

Seriously, folks, this is an interesting question that could affect lots of members, so in the interest of keeping the discussion alive .. Pretty please?
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Old 08-20-2016, 09:57 AM   #25
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Simply do IRA->Roth conversions instead.
Doesn't the conversion amount count as income toward ACA premium credits?
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Old 08-20-2016, 10:00 AM   #26
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But don't the insurers submit THEIR rates to state regulators for approval and also conduct negotiate with in network hospitals for payment rates for the following year? Problem seems to be that less efficient players are having trouble competing in a transparent marketplace. ...
For all intents and purposes the health insurance rates are at most, 120% of expected claim costs and the excess of premium over claim costs goes to overhead, taxes and profit... so if claim costs increase 10% then premiums increase 10%.

I dunno whether insurers have sufficient clout to bargain hard with medical providers ... but from the premium increases that we are seeing perhaps not.
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Old 08-20-2016, 10:15 AM   #27
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I would be more concerned with the 400% of MAGI cutoff for subsidies being lowered rather than a wealth/asset measure being applied

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That's a very good point. I wonder why 400% of FPL was decided as the cutoff point. Also, why it was designed as a cliff rather than a slope at the higher incomes.
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Old 08-20-2016, 10:23 AM   #28
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As I recall the reason it was a cliff was because if it was a slope the cost of subsidies would have skyrocketed.
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Old 08-20-2016, 10:24 AM   #29
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I think it is unlikely that a "total assets" means test will be introduced into the ACA subsidy equation. But if it happens, that test will become widely used for all kinds of other government subsidies/taxes, etc to include SS. A lot of folks in the FIRE community have a lot riding on the idea that US taxes and "reverse taxes" (benefits) will continue to be based on income rather than wealth. I wonder if this is a risk worth hedging in some way.

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+1 the reality is that in the whole scheme of things it is a nit in the federal budget and administering and enforcing it would end up being more time and effort than it is worth.

There are 4.6 millionaires in the US. Let's say 10% of them fall into that situation and the average subsidy is $8k a year, that's "only" $3.7 billion a year. The federal budget is about $3.7 trillion so $3.7 billion in savings would reduce the deficit by 0.1% if administration costs were zero.
All true, but I'm not sure how important this "practicality" argument will be. It's all about popular perceptions and sticking it to the folks who "aren't paying their fair share," etc.
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Old 08-20-2016, 01:15 PM   #30
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Doesn't the conversion amount count as income toward ACA premium credits?
Sure does. But if subsidies are off the table I'll do the conversion that we're currently not doing.

It's all about managing income current or future.
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Old 08-20-2016, 01:24 PM   #31
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All true, but I'm not sure how important this "practicality" argument will be. It's all about popular perceptions and sticking it to the folks who "aren't paying their fair share," etc.

I continue to think it highly unlikely, as I see most here do as well. Just hope we're not all bias in our conclusions. Still, every so often I remind myself France has a yearly wealth tax based upon assets starting at 800,000 euros. So it does happen...


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Old 08-20-2016, 01:42 PM   #32
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That's a very good point. I wonder why 400% of FPL was decided as the cutoff point. Also, why it was designed as a cliff rather than a slope at the higher incomes.
If the slope started at 300% and ended at 400% then wouldn't it cost less?
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Old 08-20-2016, 01:46 PM   #33
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That's a very good point. I wonder why 400% of FPL was decided as the cutoff point. Also, why it was designed as a cliff rather than a slope at the higher incomes.
We have to keep in mind, IMO, that the ACA is the product of what is really an unfinished "rough draft". Recall that the bill could never be refined, "fixed" or amended in conference because of the situation where the majority party lost its 60th vote in the Senate. That forced the Senate to take a straight up-or-down vote on a flawed House bill, where they only needed a majority vote, not 60% -- since if the bill were reconciled in conference, the new one would again need 60 votes to even get voted on.

When the House bill was approved no one expected it to be the same version as what was ultimately enacted into law. I think had the process been allowed to work as usual, the final reconciled bill would have looked quite a bit different, and some of the flaws in the ACA may have been rectified. But that's all coulda-shoulda-woulda at this point. And unfortunately, there is no political will to fix even the flaws that both parties largely agree on.
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Old 08-20-2016, 01:47 PM   #34
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I think it is unlikely that a "total assets" means test will be introduced into the ACA subsidy equation. But if it happens, that test will become widely used for all kinds of other government subsidies/taxes, etc to include SS. A lot of folks in the FIRE community have a lot riding on the idea that US taxes and "reverse taxes" (benefits) will continue to be based on income rather than wealth. I wonder if this is a risk worth hedging in some way.


All true, but I'm not sure how important this "practicality" argument will be. It's all about popular perceptions and sticking it to the folks who "aren't paying their fair share," etc.
I agree with all you wrote. The first part would be a firestorm between savers and spenders. Savers have more to lose and would have resources to fight it to the bitter end... plus it would be a bit un-American to penalize "self-made hard-working Americans" so I don't see that ever getting traction.

On the second part there are all sorts of sticky issues as to at what is included in any wealth measure, where phase-outs start and end, etc.

I think the practical reality is between the difficult political and practical administrative that it is unlikely ever to happen in my lifetime (I'm 60), but I could be wrong.
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Old 08-20-2016, 01:49 PM   #35
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I agree with all you wrote. The first part would be a firestorm between savers and spenders. Savers have more to lose and would have resources to fight it to the bitter end... plus it would be a bit un-American to penalize "self-made hard-working Americans" so I don't see that ever getting traction.
Not to mention that savers have been getting shafted by low interest rates for 7-8 years now. They may not be in a good mood as it is with respect to feeling like saving is being punished.
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Old 08-20-2016, 01:50 PM   #36
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If the slope started at 300% and ended at 400% then wouldn't it cost less?
Yes it would cost less but it would also make health insurance much less affordable to those in the 300-400 range, which I suspect includes a lot of people (votes).
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Old 08-20-2016, 01:57 PM   #37
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I would be more concerned with it being eliminated and replaced with something that does not work for those who REALLY need.
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Old 08-20-2016, 02:04 PM   #38
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What do others think is the likelihood that ACA could be modified after election to eliminate subsidies for those with low income, but high assets? In other words many on this Forum...


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Old 08-20-2016, 02:05 PM   #39
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Not to mention that savers have been getting shafted by low interest rates for 7-8 years now. They may not be in a good mood as it is with respect to feeling like saving is being punished.
shareholders have done great though
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Old 08-20-2016, 02:16 PM   #40
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shareholders have done great though
WH... eh, fugetaboutit.
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