It passes, What Now?

[Zathras]

A big change for us is that we will require less of a saftey cushion in the event of being dropped by our insurance company. While we will always keep an 'emergency fund'. We won't need a seperate 'emergency medical fund'. As such we can invest this emergency medical fund.
This is all 'pre medicare' as we have a number of years before we get there. So we were feeling especially vulnerable. Now, not nearly as much.

[FinanceGeek]

Quote:

Originally Posted by Rich_in_Tampa So far, this is the best short summary I've seen so far.

Thanks Rich_in_Tampa, but the summary didn't address my question. Reading it straight from Subtitle B, Section 1101, clause d2 (attention all humans: its on page 48) of http://docs.house.gov/rules/hr4872/1..._engrossed.pdf seems to say that only those who have been without coverage for 6 months are eligible for inclusion in this pre-existing pool. Since the provision takes effect 3 months from enactment, I'd have to guess that means someone who has a pre-existing condition and no insurance from approximately "3 months before tomorrow" onwards.

So it seems that those who are forced to keep working to obtain group coverage without pre-existing exclusions are outta luck until 1/1/2014 unless they want to "go naked" for 6 months. Or perhaps they're good 18/36 months before 1/1/2014 assuming their group coverage gives them COBRA eligibility.

Unless the next Senate reconciliation bill changes all this.

[Rustic23]

Preventive care...will be free of copayments or deductibles starting this year.

Rich,
Is an annual physical considered 'Preventive Care'. I believe that Medicare does not cover an annual physical now, will that change? Most likely too soon to ask that question.

[ziggy29]

I think the current subsidy model puts a premium on debt reduction and paying off the house as it allows one to retire sooner and on much less income (and receive a larger subsidy). An unintended consequence, I assume, or one they don't think enough people will trigger to warrant extra asset-based rules, but still, the more production is taxed and the more new goodies are means-tested, the more it pays to get all your debt out the way so you can get off the hamster wheel and get by on a lot less income.

In short, barring more changes it's a great time to be seeking FIRE when you're completely debt-free and live simply and frugally. As long as we don't have too many people do that to maintain solvency.

[DeborahB]

I'm retiring this summer at 62. I can get COBRA for 18 months but then there are those other 17 - 18 months until I am 65. I have preexisting conditions. Have no idea how this will affect me. It should be interesting.

The MO high risk pool is already in existence - the $5K deductible plan is a little over $800 a month and covers pretty much nothing - but I think it limits your out of pocket (not counting premiums? - not sure) to $10K for the year (including the deductible). That keeps me from being bankrupt if I have a medical catastrophe.

Does anyone know if there's a provision going in soon-ish that says they can't exclude for pre-ex conditions if you've had continuous coverage? I thought I saw it, but now I'm not sure.

Also - oh guess what, mega-hospital where I work self-insures. But I can't see that changing.

Hope medicare continues to be available at 65 (or before) - otherwise I'm in trouble. I'm budgeting around $19K a year for medical for that last 18 months. Better than losing the house....

[ziggy29]

Wow. Just looked at that calculator. A single adult earning 40K at age 50 pays $3800 out of pocket to insure one person while a 50 year old with a family of 4 on the same income pays $2178 to insure himself and three others? Wow and double wow. Talk about turning the system on its head.....

[Rich_by_the_Bay]

Quote:

Originally Posted by Rustic23 Preventive care...will be free of copayments or deductibles starting this year. Rich, Is an annual physical considered 'Preventive Care'. I believe that Medicare does not cover an annual physical now, will that change? Most likely too soon to ask that question.

The language suggests that preventive services will be covered if evidence-based but I haven't found the details. Be aware that preventive services that are evidence-based are few and far between.

Then again, I've yet to find a patient who doesn't have some complaint requiring attention. Got a wart? Sore shoulder? Tired? Gas?

[plex]

Quote:

Originally Posted by ziggy29 Wow. Just looked at that calculator. A single adult earning 40K at age 50 pays $3800 out of pocket to insure one person while a 50 year old with a family of 4 on the same income pays $2178 to insure himself and three others? Wow and double wow. Talk about turning the system on its head.....

Wow, didn't notice that, pretty much anyone over 30 that is single is going to pay more than a family of four (and probably couples as well?). Not a lot more, but the subsidy differences are huge. Perhaps this hints that a new law has finally been passed that makes it more beneficial (monetarily) rather than less to be married?

[samclem]

Quote:

Originally Posted by plex Perhaps this hints that a new law has finally been passed that makes it more beneficial (monetarily) rather than less to be married?

Or "married."
Hmmm, a new law that significantly increases the tangible benefits to those who have a certificate of marriage. I wonder if this might possibly have an impact on any other ongoing public debates about society and marriage . . . .

[oliverdickens]

I have not seen any distinction but:

Are self insured plans that many mega corp and small companies use treated any different under this bill than insurance company plans? Specifically for retirees.

Thanks

[SecondCor521]

One could possibly become Amish.

2Cor521

[FinanceDude]

House Republican Jim Sensenbrenner (WI) was on the local news hows today. He said the big problem that NOONE is talking about is where the money is coming from to build infrastructure along with finding doctors and nurses and other health care workers now that 30 million folks are getting coverage. Granted, a bunch of those were ducking into the nearest ER, but what if a few million actually went to the doctor?

His final comment was that finding whatever taxes are put in the bill, the system will fall way short of being funded in a matter of a couple years, and then we have yet another unfunded entitlement program...........

This is not some freshmen Congressmen, he has 31 years in the House..........

[clifp]

Quote:

Originally Posted by ziggy29 I think the current subsidy model puts a premium on debt reduction and paying off the house as it allows one to retire sooner and on much less income (and receive a larger subsidy). An unintended consequence, I assume, or one they don't think enough people will trigger to warrant extra asset-based rules, but still, the more production is taxed and the more new goodies are means-tested, the more it pays to get all your debt out the way so you can get off the hamster wheel and get by on a lot less income. In short, barring more changes it's a great time to be seeking FIRE when you're completely debt-free and live simply and frugally. As long as we don't have too many people do that to maintain solvency.

I think paying off my mortgage a couple of weeks ago looks even smarter.
If the rules change so that dividend are taxed the same as interest or income (this is what happens if the Bush tax cuts expires) I think it also means you will want a portfolio that is heavily weighted toward capital gains. This will allowed you to manipulate your income so some years you can get a subsidy and other years you won't.

Say you have a $1 million portfolio that generates 5%/year mostly in interest and dividends if you get $50K/year you won't get a subsidy. If on the other you have 1 million dollar portfolio that still averages 5%/year but only allows generates 30K in dividend/interest. In even years you can show an income of 30K allowing you a healthy subsidy for insurance, while in odd years you take $40K in capital gain and show a 70K income get no subsidy. For couples you are still in the 15% and for singles you'll be in the 15% on even years and 25% on odd years.

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 think Obamacare will probably turn me into an indexer, which will free up some time to game the health care subsidy system. I am guessing that when they designed the bill subsidizing my health insurance wasn't on the top of their agenda. Thanks guys...

[FUEGO]

Quote:

Originally Posted by ziggy29 Wow. Just looked at that calculator. A single adult earning 40K at age 50 pays $3800 out of pocket to insure one person while a 50 year old with a family of 4 on the same income pays $2178 to insure himself and three others? Wow and double wow. Talk about turning the system on its head.....

The subsidies are all based on how your income compares to poverty level incomes.

Just for kicks I put in 2 single people each earning $20k at age 50. Total annual premiums are ~$2200. Those two people married with 2 children and a combined income of $40k also pay ~$2200. Almost the exact same premium whether they are married or single, except if married the kids are free. The cost structure is not a whole lot different than the federal income tax code with respect to kids. They are basically subsidizing having kids.

[FUEGO]

Quote:

Originally Posted by Zathras A big change for us is that we will require less of a saftey cushion in the event of being dropped by our insurance company. While we will always keep an 'emergency fund'. We won't need a seperate 'emergency medical fund'. As such we can invest this emergency medical fund. This is all 'pre medicare' as we have a number of years before we get there. So we were feeling especially vulnerable. Now, not nearly as much.

I think that is a big deal too. The certainty that some level of insurance covering pre-existing conditions will be available and the price will be capped at some level (assuming you are under 400% of poverty level income). Before this bill, I just fudged the insurance premiums up a lot to cover the unknowns of what insurance would cost and unknown rate of medical inflation.

[FUEGO]

Some have suggested strategic marriages. I'd suggest there may be room for strategic divorces or strategic abstinence from marriage.

Take, for example, two folks who each have $21,660 in income. Individually they are at 200% of the federal poverty level, and would each pay 6.3% of their income to cover the HI premium. If they get married, their joint income rises to $43,320. For a 2 person household, the poverty level is $14,570 (note that it is not 2x the 1 person poverty level, but only 35% more roughly). The $43,320 joint income is now 297% of the 2 person household poverty level. They would now have to pay 9.42% of their joint income for HI. In this example the couple would save roughly $1350 if they never married or were divorced. Although there could be other impacts on expense, risk, and legal liabilities were they to restructure their household in this manner.

Love may not be dead, but it can be expensive.

Just sayin'...

I guess it is a good thing that DW refuses to negotiate whenever I suggest a strategic divorce. In spite of my spock-like logic, she sticks with me!

[CoolChange]

Does anyone know yet if expats will have to buy US health insurance (assuming a desire to retain a US passport, keep option of returning to US open, etc.) to avoid the fine/tax/penalty for being uninsured?

[FinanceGeek]

The other thing the use of the FPL for subsidy determination does is magnify the advantage of living in low cost areas. 4*FPL probably is "true poverty" in most tier 1 locales, but one can live quite nicely on that in flyover land thank you.

[TromboneAl]

Quote:

Wow. Just looked at that calculator. A single adult earning 40K at age 50 pays $3800 out of pocket to insure one person while a 50 year old with a family of 4 on the same income pays $2178 to insure himself and three others? Wow and double wow. Talk about turning the system on its head.....

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.

[Westernskies]

Quote:

Originally Posted by Janet H Your somewhat shell-shocked mods are fervently hoping it stays non-partisan AND FIRE related. Heath care related threads are prone to speeding off the tracks and will be closed or removed if they stray too far from our CR's.

What can I do to help?