ACA, Subsidies and Better off Americans (which means many FIRE)

[ziggy29]

So people who are saying $900 per month are not taking into account the ACA credit OR they are making a boatload of money....

401% of the FPL is not a "boatload" of money. It's not destitute, though in high cost areas it's barely even a middle class income, but not a boatload. That said, unless you are well over the 400% cliff, many households can probably find a way to engineer an MAGI under the cliff, especially if they have significant earned income; more so if they are over 50.

 

[socca]

401% of the FPL is not a "boatload" of money. It's not destitute, though in high cost areas it's barely even a middle class income, but not a boatload. That said, unless you are well over the 400% cliff, many households can probably find a way to engineer an MAGI under the cliff, especially if they have significant earned income; more so if they are over 50.

Some households acquired business interests prior to ACA where income engineering is not possible. Why should these folks be slammed with unaffordable health insurance premiums (according to the ACA's definition of 'affordability')?

 

[travelover]

Frankly the US does subsidize the cost of drugs in other countries. European health systems regulate drug prices because market forces haven't worked well in healthcare to keep the costs down, as is evident in the US system.

If this is true, then Americans are being shafted. Who is supposed to be looking out for our interests so this does not happen?

 

[nun]

If this is true, then Americans are being shafted. Who is supposed to be looking out for our interests so this does not happen?

There are plenty of articles and papers that describe the higher cost of drugs in the US. It's a common thing for people to get their prescription drugs in Canada or Mexico to avoid the higher prices.

You should talk to your insurance company and representative politicians if this annoys you.

 

[samclem]

Some households acquired business interests prior to ACA where income engineering is not possible. Why should these folks be slammed with unaffordable health insurance premiums (according to the ACA's definition of 'affordability')?

Can you provide an example to clarify the point? The ACA is designed to limit premiums to an "affordable" level, and even provides OOP cost-sharing subsidies for some households at lower income levels. What type of "business interest" causes a family to have an income situation where health care premiums are unaffordable by ACA standards.

 

[socca]

Can you provide an example to clarify the point? The ACA is designed to limit premiums to an "affordable" level, and even provides OOP cost-sharing subsidies for some households at lower income levels. What type of "business interest" causes a family to have an income situation where health care premiums are unaffordable by ACA standards.

(1) Anyone with a MAGI just above the cutoff for subsidies in a county where ACA health insurance premiums have skyrocketed may need to spend more than 8.13% of his/her MAGI to acquire the least expense Bronze plan, which according to the ACA would represent 'unaffordable' insurance for that unfortunate soul. That happens to be the case in my county.

(2) There many examples of business interests where income minimization isn't possible. For example, being in a partnership where the majority of partners desire income maximization rather than income minimization or income 'management'. Each partner's share of the partnership's overall net income is included in that partner's MAGI. Another example would be having a minority interest in an S-corp.

 

[travelover]

............You should talk to your insurance company and representative politicians if this annoys you.

I think "representative politician" is an oxymoron.

 

[NW-Bound]

If this is true, then Americans are being shafted. Who is supposed to be looking out for our interests so this does not happen?

...You should talk to your insurance company and representative politicians if this annoys you.

I don't know if talking to your insurance company would help, but it might help to talk to your policitians.

Not as an individual, but you need a large crowd turn-out. And also if everyone brings a pitchfork.

 

[gerntz]

Yep the US system is very expensive and to make things worse the US has a lower life expectancy than most of the countries on the expenditure graph you posted.

The life expectancy differences have little to do with health care & much to do with lifestyle/choices - teenage pregnancies, murder, traffic deaths, drug overdoses.

 

[gerntz]

For every US company like Pfizer there's a European company like GSK, Bayer or Sanofi doing similar research and the costs or drugs in Europe are no where near as high as in the US. So there is world class research and drug innovation outside the US. I think US pharma has done a good PR job convincing us that the current US cost structures are necessary for innovation and good care, much like the rest of the US healthcare industry which is part of the reason why the US pays so much more than other countries for an arguably poorer system.

First, the data I've seen shows the US doing far & away the most drug research (& that doesn't include equipment. testing/procedures innovations.). It's not one for one in other countries. Second, the US does allow pharma to recover it's research costs in pricing where other countries don't. So US residents shoulders the entire research cost - my point that we ought to claw back those costs on imports from countries that just pay the marginal price for5 the last pill produced. Third, are USA drug companies moving research to ohter countries because it's done cheaper there? I'm not seeing it.

 

[gerntz]

Frankly the US does subsidize the cost of drugs in other countries. European health systems regulate drug prices because market forces haven't worked well in healthcare to keep the costs down, as is evident in the US system.

Agree we do subsidize them - but by us accepting the other countries preventing research costs from being recovered by regulating to pay only the marginal costs of drugs. We need to make them pay for the research costs one way or another rather than being on the shoulders of USA residents only.

 

[Texas Proud]

Why are bronze plans crappy? I can afford any plan I want. I will never qualify for a subsidy. I chose to buy the bronze HSA plans because I think it makes sense to pay for as much of the medical care for my family myself and buy protection for something I couldn't really afford.
The only reason I might complain about bronze plans is they are forced to cover stuff I would rather not have covered (pediatric dental, wellness visits, addition treatment etc).

It is crappy for the people who cannot afford to pay for the huge deductible....

 

[Texas Proud]

For every US company like Pfizer there's a European company like GSK, Bayer or Sanofi doing similar research and the costs or drugs in Europe are no where near as high as in the US. So there is world class research and drug innovation outside the US. I think US pharma has done a good PR job convincing us that the current US cost structures are necessary for innovation and good care, much like the rest of the US healthcare industry which is part of the reason why the US pays so much more than other countries for an arguably poorer system.

I would bet money that the drug companies you cited as being non-US are charging a much higher price on their drugs here then over there...

I think it is a US political problem that will not get fixed until the gvmt starts to do what other countries do... and since the US gvmt pays big money for health care, they should be able to do it...

But I will say... it is not only drugs that we pay way too much for.... look at the F-35 fighter jet.... costs way out of control... and the life cost of the system is over $2 trillion I had read someplace....

 

[Texas Proud]

401% of the FPL is not a "boatload" of money. It's not destitute, though in high cost areas it's barely even a middle class income, but not a boatload. That said, unless you are well over the 400% cliff, many households can probably find a way to engineer an MAGI under the cliff, especially if they have significant earned income; more so if they are over 50.

A boatload when compared to low income people who are getting a credit.... not when compared to higher earners like many on this board....

The stmt was in context of people saying they cannot afford to buy insurance.... and I say they are not looking properly or are just lying...

 

[Texas Proud]

(1) Anyone with a MAGI just above the cutoff for subsidies in a county where ACA health insurance premiums have skyrocketed may need to spend more than 8.13% of his/her MAGI to acquire the least expense Bronze plan, which according to the ACA would represent 'unaffordable' insurance for that unfortunate soul. That happens to be the case in my county.

(2) There many examples of business interests where income minimization isn't possible. For example, being in a partnership where the majority of partners desire income maximization rather than income minimization or income 'management'. Each partner's share of the partnership's overall net income is included in that partner's MAGI. Another example would be having a minority interest in an S-corp.

I do not understand what you are saying about partnership income.... if the partner is earning more than the 400%... they are making decent money.... same for an S-Corp....

I have a minor interest in an S-Corp... my income from it is in the $6 to $8K per year... yes, I put that down as income... I still get an ACA credit...


So yes, the cliff is an important number.... if you go over.... no credit... that is just the way it is... that happened to me the first year when I sold too much stock and had big cap gains, some salary for the year and DW had some also... I still bought insurance for the family....

 

[nun]

Agree we do subsidize them - but by us accepting the other countries preventing research costs from being recovered by regulating to pay only the marginal costs of drugs. We need to make them pay for the research costs one way or another rather than being on the shoulders of USA residents only.

I think that will be difficult to achieve. The multinational nature of the pharmaceutical industry makes it difficult to pin down the cost centers of research, manufacturing and marketing. Sanofi owns Genzyme and Pfizer first developed Viagra in England etc. But there is certainly an enormous domestic pharma industry in Europe and Japan that develops drugs even with the lower costs their consumers pay for those and US drugs. Whether the prices in the US are a true reflection of the development costs or a product of a broken system is something that needs to be honestly investigated.

The fact that those drugs are many times as expensive in the US is something that amazes Europeans/Canadians etc and most Americans when they learn about it. The rest of the world is ok with the status quo and it appears that the US is also ok paying so much more because little to nothing is being done to reduce US drug costs.

 

[travelover]

..........Whether the prices in the US are a true reflection of the development costs or a product of a broken system is something that needs to be honestly investigated.
...........

Given that this is a trillion dollar problem that has been going on for a very long time, why do you think it has not been "honestly investigated"? That is the elephant in the room.

 

[pb4uski]

In this discussion I am conflicted.... the free market person in me says that the gvmt should stay out of it....

But, the practical side of me says that is not working.....

+1 Our past system didn't work, the current system does not work.... we need to make some radical changes... not that success will be guaranteed but we already know incremental changes are a waste of time and resources.

 

[pb4uski]

(1) Anyone with a MAGI just above the cutoff for subsidies in a county where ACA health insurance premiums have skyrocketed may need to spend more than 8.13% of his/her MAGI to acquire the least expense Bronze plan, which according to the ACA would represent 'unaffordable' insurance for that unfortunate soul. That happens to be the case in my county. ....

One thing to note is that under ACA if the lowest cost bronze plan available to you exceeds 8.13% of MAGI then you can buy catastrophic coverage even if you are over 30.

In some states, especially those that are not age-rated, there is a significant difference in premium and not much difference in coverage, so it is a very good deal. In other states, the premium difference is not very significant. In any event, if you are in that situation it is worth checking into.

 

[nun]

Given that this is a trillion dollar problem that has been going on for a very long time, why do you think it has not been "seriously investigated"? That is the elephant in the room.

The "organic" way that healthcare has developed over the years in the US has created a large number of vested interests and it is enormously difficult to change. Frankly I don't see US healthcare getting any less expensive until the market truly takes hold and the system collapses when healthcare becomes completely unaffordable.......let's face it, US healthcare is seriously ill.

 

[travelover]

The "organic" way that healthcare has developed over the years in the US has created a large number of vested interests and it is enormously difficult to change. Frankly I don't see US healthcare getting any less expensive until the market truly takes hold and the system collapses when healthcare becomes completely unaffordable.......let's face it, US healthcare is seriously ill.

I agree - it is what I'd call equilibrium - the tipping point where business and government are unable to absorb the compounded health care costs and Joe Average feels the pain.

 

[nun]

I agree - it is what I'd call equilibrium - the tipping point where business and government are unable to absorb the compounded health care costs and Joe Average feels the pain.

I think we are close to that tipping point.

 

[Fermion]

Compensation for doctors is a lot lower in some other countries yet we really don't see a lot of hollering over that. The average compensation is around $250,000 in the USA and under $100,000 in places like Denmark.

And you are right, it does not cost a billion dollars to bring a drug to market. It is more like two to three billion if you are going to recognize survivor bias. 90% of the small companies fail in trials and lose all of the investor money then disappear.

I was unlucky enough to invest in one of those. Company churned through over $1.5B in a decade and never managed to get a drug through phase 3. It is why the next company I invest in better charge enough to help me make up my previous losses.

 

[travelover]

Compensation for doctors is a lot lower in some other countries yet we really don't see a lot of hollering over that. The average compensation is around $250,000 in the USA and under $100,000 in places like Denmark.

And you are right, it does not cost a billion dollars to bring a drug to market. It is more like two to three billion if you are going to recognize survivor bias. 90% of the small companies fail in trials and lose all of the investor money then disappear.

I was unlucky enough to invest in one of those. Company churned through over $1.5B in a decade and never managed to get a drug through phase 3. It is why the next company I invest in better charge enough to help me make up my previous losses.

Not sure what your point is, but if you think drug companies are not overcharging in the USA, I respectfully disagree.

 

[Fermion]

Not sure what your point is, but if you think drug companies are not overcharging in the USA, I respectfully disagree.

I think perhaps they are undercharging elsewhere which causes them to overcharge here. I like the idea of a tariff on other imports to offset the cost of developing the drugs coupled with a lowering of the price of drugs in the USA.

Or we could lower the standards. From pre-clinical to post phase III approval takes about six years minimum. Imagine designing a phone for six years....it would have to be a hell of a phone for investors to stick with you that long to hope it sells.

We could get some mighty cheap drugs if you could not sue and testing was limited to a year or so.