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Old 03-23-2010, 10:13 AM   #41
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state Medicaid programs will expand to cover people living between 133 and 400 percent of the federal poverty level.
To simplify this, you'll get subsidized insurance if your income is less than about $43K, $58K, $73K, or $88K for a family of 1, 2, 3, or 4, respectively (based on this).
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Old 03-23-2010, 11:25 AM   #42
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Wait a second, that isn't as ridiculous as it sounds. Word it like this, and it makes more sense:

A family with a per-capita income of $40K pays $3,800 for health insurance.
A family with a per-capita income of $10K gets subsidies, and pays $2,178 for health insurance.

In other words, if you're single and making $40K, you're doing fine and don't need help. If you are supporting four people on that income, the government is worried that you won't get health insurance, and that you'll burden the system by not treating medical conditions early, and by visiting the emergency room and not being able to pay. To avoid this, you will receive subsidies.
Thanks Al, that is a useful wait to frame it. If we were doing this with a single payer approach, like Medicare for all, the "premiums" might be in the form of income taxes which many of us prefer to be progressive. When the costs are laid out in subsidies like this it makes the progressive nature more evident. That is probably a good thing.
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Old 03-23-2010, 11:27 AM   #43
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One aspect of "What Now" that I haven't seen mentioned is the immediate impact on small businesses. They will get tax credits of up to 30% this year to offer health insurance to employees. Anyone here working for a small business that might be encouraged to offer a policy with such a credit?
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Old 03-23-2010, 11:45 AM   #44
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I just read they are reducing Flexible Spending Accounts from the current $5K limit to $2500?
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Old 03-23-2010, 11:55 AM   #45
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I just read they are reducing Flexible Spending Accounts from the current $5K limit to $2500?
Yes, the limit will be $2500 starting in 2013. After that, it will go up with inflation (I assume that's "CPI", not medical cost inflation).
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Old 03-23-2010, 11:57 AM   #46
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Medicare Advantage (which is not Medicare) will gradually have its supplements cut.
True, it is not the "traditional Medicare", but it does allow for a range of services that traditional Medicare did not.

My (disabled) son is on Medicare Advantage and has been for a few years. Compared to traditional Medicare (which he was on), it is a better program, for the person enrolled.

His option is to go back to traditional Medicare, of course. In his case, this bill/law is a negative.

So as a disabled person, working in a sheltered workshop and trying to make it on his own, will be expected to fund (yes, he pays Medicare tax) others.

Yeah, this is fair ...
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Old 03-23-2010, 12:06 PM   #47
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True, it is not the "traditional Medicare", but it does allow for a range of services that traditional Medicare did not.

My (disabled) son is on Medicare Advantage and has been for a few years. Compared to traditional Medicare (which he was on), it is a better program, for the person enrolled.

His option is to go back to traditional Medicare, of course. In his case, this bill/law is a negative.

So as a disabled person, working in a sheltered workshop and trying to make it on his own, will be expected to fund (yes, he pays Medicare tax) others.

Yeah, this is fair ...
Agreed. Medicare Advantage programs are a great deal for those who took them. But they are being supplemented by out tax dollars. You should take advantage of that break while it is available. In the future tax dollars will supplement a different group.

Is there anything in the new law that will help you pay for Medicare supplemental policies or anything?
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Old 03-23-2010, 12:30 PM   #48
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Is there anything in the new law that will help you pay for Medicare supplemental policies or anything?
Our expectation that whatever is "law" will be to his disavantage (regardless of polical party).

There are hundreds of million folks in the U.S. Whoever is in political power is going to be "pandering for votes" (sorry to be political).

Whatever is good for the masses will be less than perfect to those in need, IMHO.

For me, it's as simple as that (T.G. I'm old and don't have to put up with this cr** much longer )...

And to answer your question, there is no offer to help him in his situation. He will be paying the same for less (as he has in the past).
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Old 03-23-2010, 12:36 PM   #49
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Here's a thought. Let's say you are a married, joint-filing family of 4 on a $60K income. You're self-employed, so you have to buy your own health insurance and are looking at help from the government subsidy.

You're struggling to make ends meet so you think you may want to work a little longer and harder to make a little extra money.

But for every dollar you earn there, you lose 15 cents to federal income tax, you lose about 15 cents of your health insurance subsidy and you lose about 14 cents to self-employment taxes (15.3% less the deductibility of half of it). In a state with an income tax you could lose another 5 cents to state income tax.

Of that dollar you earned, you only keep about half of it. At this point you have to ask yourself if it's really worth busting your chops to earn a little more. And since the subsidy is still phasing out once you hit the 28% bracket, before it completely phases out there's a "bracket" where you lose about 60 cents on the dollar if not a little more to taxes and lost subsidies.
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Old 03-23-2010, 12:36 PM   #50
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I just read they are reducing Flexible Spending Accounts from the current $5K limit to $2500?
Any word on HSA's? I read that they would be impacted based on an earlier version of the bill but not sure if it made the final cut.
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Old 03-23-2010, 12:38 PM   #51
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Of that dollar you earned, you only keep about half of it. At this point you have to ask yourself if it's really worth busting your chops to earn a little more. And since the subsidy is still phasing out once you hit the 28% bracket, before it completely phases out there's a "bracket" where you lose about 60 cents on the dollar if not a little more to taxes and lost subsidies.
I think you have discovered the nuance of the law. It's another measure to encourage you to either shoot for the moon or acquiesce to mediocrity.
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Old 03-23-2010, 12:39 PM   #52
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Any word on HSA's? I read that they would be impacted based on an earlier version of the bill but not sure if it made the final cut.
I *think* the only current impact is that premature withdrawals for non-medical purposes would be subject to a 20% penalty instead of 10%. Not sure that made the final cut but I think it was in the bill the Senate passed so I assume it did.

[Edit to add: I think it also removes the HSA eligibility of OTC medical expenses, now that I think of it. Again, haven't seen the full analysis of the final law's impact on HSAs otherwise.]
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Old 03-23-2010, 12:42 PM   #53
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I *think* the only current impact is that premature withdrawals for non-medical purposes would be subject to a 20% penalty instead of 10%. Not sure that made the final cut but I think it was in the bill the Senate passed so I assume it did.
Ok. I wonder if High deductible plans will continue to pass muster under the new minimum requirements that all insurance plans will have to meet in the future? In other words, will I continue to be able to contribute to an HSA and retain our HDHP from DW's job?
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Old 03-23-2010, 02:03 PM   #54
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One aspect of "What Now" that I haven't seen mentioned is the immediate impact on small businesses. They will get tax credits of up to 30% this year to offer health insurance to employees. Anyone here working for a small business that might be encouraged to offer a policy with such a credit?
Good point.
A number of years ago, the business I worked at paid for the full amount of health insurance for all employees (about 10-25 employees).
This credit would definately allow the company to either hire more, or make more capital investments to grow the business.
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Old 03-23-2010, 02:07 PM   #55
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In my case I'll probably consider switching to a more expensive plan during even years (while I am subsidized) and probably only getting a catastrophic HSA eligible plan on odd years.
I was at a meeting last week where an economist who has made numerous appearances on CNBC spoke. Turns out his wife is a pediatrician. This was before the vote, but he simply told everyone to go get themselves an HSA and fund it, like he did.
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Old 03-23-2010, 02:15 PM   #56
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One aspect of "What Now" that I haven't seen mentioned is the immediate impact on small businesses. They will get tax credits of up to 30% this year to offer health insurance to employees. Anyone here working for a small business that might be encouraged to offer a policy with such a credit?
Or the flip side. What will be the impact on small businesses that are subject to the penalty for not providing health insurance? Fire enough employees to get under the size threshold so you won't be subject to the penalty?
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Old 03-23-2010, 02:20 PM   #57
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I've come across some folks who are concerned that companies (especially those not receiving a subsidy) will modify their benefit package to comply with the letter of the law. The least expensive thing to do is for them to offer insurance only for the employee, and not the employee's family (thereby avoiding any penalty). If this happens, then the rest of the family would go to the exchanges to buy their insurance. I assume they'd get some sort of subsidy, but not the entire "family amount" since the employee still has employer-provided insurance.
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Old 03-23-2010, 02:39 PM   #58
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I've come across some folks who are concerned that companies (especially those not receiving a subsidy) will modify their benefit package to comply with the letter of the law. The least expensive thing to do is for them to offer insurance only for the employee, and not the employee's family (thereby avoiding any penalty). If this happens, then the rest of the family would go to the exchanges to buy their insurance. I assume they'd get some sort of subsidy, but not the entire "family amount" since the employee still has employer-provided insurance.
I'm not 100% clear on how it works, but the employee may opt to forgo the employer provided coverage and get subsidized family coverage from the exchanges or privately (and get the subsidy). Particularly if the exchange provided plan is better than the employer provided, and their premiums wouldn't change.

I think if that happens, then the employer will be penalized on all employees if even just 1 employee opts for the subsidized insurance. I didn't really understand that part though. How would an employer handle vindictive or simply unique employees that opted for publicly subsidized coverage and ended up costing the company tens of thousands of dollars? Fire them?
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Old 03-23-2010, 02:49 PM   #59
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Or the flip side. What will be the impact on small businesses that are subject to the penalty for not providing health insurance? Fire enough employees to get under the size threshold so you won't be subject to the penalty?
Never underestimate the law of unintended consequences.

Usually they define "small business" as 50 employees or less when it comes to giving "small business" extra goodies or exemptions from costly regulatory laws affecting larger businesses.

Which is why I'd be constantly living in fear if I worked for an employer with, say, 52 employees. If you have 80 employees, you probably won't let 30 of them go because of the impact to your business, but if you were just barely over 50, you'd think about finding ways to squeeze a little more out of the 49 who remained...
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Old 03-23-2010, 02:53 PM   #60
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Never underestimate the law of unintended consequences.

Usually they define "small business" as 50 employees or less when it comes to giving "small business" extra goodies or exemptions from costly regulatory laws affecting larger businesses.

Which is why I'd be constantly living in fear if I worked for an employer with, say, 52 employees.
I think I saw 100 employees as a number they were using.

I don't want to exaggerate the effect the law will have on those businesses with 101 or 102 employees. Many probably already provide insurance that complies or substantially complies (and can be brought into compliance easily and cheaply). But in terms of competitiveness, there are some businesses for which it may not be a feasible employee benefit (along with paying minimum wage). A business with 101 employees may not be able to compete with one that has 90-95 employees but does not have expensive insurance to buy or a penalty to pay.
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