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

[LARS]

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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[MichaelB]

What's the likelihood we can talk about it here during an election without the hyperbole or partisan rhetoric that usually leads to a visit by Mr. Porky?

 

[REWahoo]

I'd say the odds were about as good as finding a pulled pork sandwich in Mecca.

 

[LARS]

A political discussion doesn't need be central at all. Given challenges facing ACA by growing noise of insurers the spotlight is on ACA. That suggestions to me increased likelihood that ACA will be/has to be adjusted/tinkered with. So once Pandora's box is opened, do low income/high asset folks find they are caught up in the revamping?


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[LastOfTheBoomers]

Defining high assets would be a tough one to sort out. Would retirement accounts be exempt? Would house equity play into the equation? I would assume HSA accounts would be exempt

What if you moved a large chunk of money to an annuity that started payouts at age 65 - you would be asset poor for now.

5 year look back?

Like many government programs it's not the law but the enforcement of the law that takes the most effort.



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[Hamlet]

I think the odds are reasonably low. It's not going to be at the top of anyone's list of issues to deal with, and I think we will continue to have divided government, so the odds of even high priority items getting dealt with are low.

 

[easysurfer]

What's the likelihood we can talk about it here during an election without the hyperbole or partisan rhetoric that usually leads to a visit by Mr. Porky?

Made me chuckle .

 

[pb4uski]

I'd say the odds were about as good as finding a pulled pork sandwich in Mecca.

+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.

 

[aaronc879]

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.

 

[LARS]

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.

Therein, to some extent, is the issue. To keep the marketplaces viable for insurance companies federal subsidies may have to increase (at the risk of introducing politics [mod edit]. So focus will be on subsidies.

Regardless, I appreciate hearing other opinions on the issue. Never thought I would be happy to reach 65, but it will be nice to be out of private medical insurance market and all the headaches that come with it!


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[REWahoo]

(at the risk of introducing politics...

Now you've done it!

At the risk of being redundant, the forum works like this:

Someone mentions (or strongly alludes to) a particular political party, candidate, or political philosophy.
The moderators take note and delete the political reference and/or caution against introducing politics on the thread.
Members ignore the mod warning and additional political references are posted.
Porky makes an appearance and all discussion ceases .

Next topic...

 

[aaronc879]

Therein, to some extent, is the issue. To keep the marketplaces viable for insurance companies federal subsidies may have to increase (at the risk of introducing politics [mod edit]. So focus will be on subsidies.

Regardless, I appreciate hearing other opinions on the issue. Never thought I would be happy to reach 65, but it will be nice to be out of private medical insurance market and all the headaches that come with it!


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If they really needed to address subsidies then I would think changing the cap to 300% of the poverty level instead of 400% would be better than trying to track everyone's net worth.

 

[MichaelB]

Please leave partisan and election comments out of the discussion.

 

[easysurfer]

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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I think very unlikely just from a logistics standpoint. I don't think something like, "calculate and put down your net worth on your taxes so we can bump that up our verification process" would go over to well.

 

[Fermion]

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).

I bet the odds are quite a bit better you could find a pulled pork sandwich in Mecca than the ACA will switch to means testing.

Think about it. How would you do the means testing and be fair? We just sold our paid off house for ~$300k and now have that $300k in a saving account. We are using that money for living expenses. What about someone who still lives in their $300k home? Would they be forced to sell it to pay their ACA policy or would you exempt homes? If you exempt homes, how would you make it fair to those who rent? What about that diamond necklace you bought your wife? Is that included in the means testing? Artwork? Farmland? Gold coins or stamps in safety deposit box?

I know there are currently (or were) means testing for some LTC that required spend downs, but it was state by state and messy. Imagine how messy it would be if the federal government tried to create a Domesday book of everyone's assets?

 

[photoguy]

+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.

Agree with above. Plus they had an asset test for medicaid and removed it so i think it's not an oversight. They also made some adjustments to AGI to add back in tax exempt interest so they may figure that would catch the multi-millionaires.

Finally AFAIK nobody is calling for this specific modification.

Think about it. How would you do the means testing and be fair? We just sold our paid off house for ~$300k and now have that $300k in a saving account. We are using that money for living expenses. What about someone who still lives in their $300k home?

I assume they could just revert to the same process used for medicaid before ACA (unsure how it worked). But I don't think they will for reasons above.

 

[Beldar]

I think very unlikely just from a logistics standpoint. I don't think something like, "calculate and put down your net worth on your taxes so we can bump that up our verification process" would go over to well.

I have to agree...implementing and verifying some sort of means testing for ~everyone~ receiving a subsidy would be an incredible burden on the IRS. I don't think any form of electronic linking / reporting is mature enough today to reliably make all of that financial data available to screen the returns of those individuals.

_B

 

[travelover]

...........
Someone mentions (or strongly alludes to) a particular political party, candidate, or political philosophy............

Other people make "political" posts. I just point out the obvious truth.

 

[MRG]

As long as I can buy insurance with no regard to preexisting conditions I'm OK. Simply do IRA->Roth conversions instead.

 

[RunningBum]

There's no means testing (that I know of) on unemployment benefits, social security, or any tax credits that are limited or phased out at higher income levels. I don't see them going after this one specifically and I don't see them going after the others. I'm a little surprised they haven't addressed the subsidy cliff.

 

[unclemick]

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.

 

[gauss]

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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[gauss]

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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[MichaelB]

Please leave partisan and election comments out of the discussion.

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?

 

[jimbee]

Simply do IRA->Roth conversions instead.

Doesn't the conversion amount count as income toward ACA premium credits?