It passes, What Now?

[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]

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]

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]

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]

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]

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]

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]

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]

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?

 

[TromboneAl]

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).

 

[donheff]

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.

 

[donheff]

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?

 

[Bimmerbill]

I just read they are reducing Flexible Spending Accounts from the current $5K limit to $2500?

 

[samclem]

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).

 

[rescueme]

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 ...

 

[donheff]

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?

 

[rescueme]

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).

 

[ziggy29]

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.

 

[FUEGO]

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.