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Old 07-06-2012, 01:54 PM   #21
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Some other details were interesting in the document. It confirms that if you are eligible under PPACA for Medicaid (and the state is one of those that expands their Medicaid program), you are not eligible for the subsidy credits.

So, there will be a pretty specific income range to hit in order to get the best coverage for the lowest price, you can't qualify for both after 2014.
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Old 07-06-2012, 01:57 PM   #22
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It's not justification...
No, of course it isn't.
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Old 07-06-2012, 01:57 PM   #23
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To answer the moral quandry question...

Sometimes, taking the tax advantages of having a HSA (triple tax benefit) feels like I'm getting a free ride as it feels like I'm just shuffling money around.

I contribute, then use the tax deferred contributions to pay myself back for qualified medical expenses, all the while get a tax deduction for the contributions come tax time. Additionally, some folks don't even use a HSA for medical expenses yet, but instead think of it as a super IRA.

I love my HSA. But is that a free ride, or just wise planning?

p.s. No political statement intended.
Either way, at least you are smart enough to use it. Just talked to a friend yesterday who said he finally signed on to companies flex spending account. Last 10 years been spending over $1000 a year in prescription payments. Was just too lazy to sign up. Another friend who has a $7k family deductible, I cant get him to take 30 minutes and sign up for an HSA. Just pays his bills out of pocket. I don't understand people who just leave $ on the table just because they are too lazy to do the paperwork. And both these people live paycheck to paycheck despite nice income.
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Old 07-06-2012, 01:58 PM   #24
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Just keep in mind that even if Mass. Health works the way you think it might, it won't work that way anymore in 2014. Federal law establishes the bare minimum, states can expand on it, but they can't have looser restrictions.
Good point.


I am still a bit unclear the exact difference for me between PPACA's use MAGI(which includes some deductions, dividends/interrest and only certain tax exempt investments) and the Mass plan (which does not include any deductions, taxable dividends/interest and no tax exempt interest/dividends).


At this point I just need to proceed slowly and see what is what. The guy at Mass Health Care said not to sweat the form, they do all the eligibility based on your taxes so I just need to wait it out.
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Old 07-06-2012, 03:14 PM   #25
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It is Mass Health.


I called them earlier as I saw that exact line at that web site you linked.


I talked to the representative to confirm and dividends/interest does not apply to people under the age of 65. They categorize dividends and interest as an asset and they apply to people over 65.

Does not make a ton of sense though. I should probably call back.
There is a section that specifically refers to people age 65 and above, and it does not reference interest and dividends. Seems pretty clear to me from the web page that investment income is included.

Edit to add: I would also base my actions what is written, not what is said.


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Good point.


I am still a bit unclear the exact difference for me between PPACA's use MAGI(which includes some deductions, dividends/interrest and only certain tax exempt investments) and the Mass plan (which does not include any deductions, taxable dividends/interest and no tax exempt interest/dividends).


At this point I just need to proceed slowly and see what is what. The guy at Mass Health Care said not to sweat the form, they do all the eligibility based on your taxes so I just need to wait it out.
MAGI may be determined the same way it is for other purposes or it may be unique to PPACA. I'd wait to be certain before counting on a subsidy or credit.
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Old 07-06-2012, 03:20 PM   #26
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MAGI may be determined the same way it is for other purposes or it may be unique to PPACA.
If they modify the computation and exclude dividends and interest for PPACA, that will truly be the Gift of the MAGI.
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Old 07-06-2012, 03:22 PM   #27
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Groooaan...
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Old 07-06-2012, 03:25 PM   #28
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If they modify the computation and exclude dividends and interest for PPACA, that will truly be the Gift of the MAGI.
I'll bet on the biblical one happening again before the other one happens once.
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Old 07-06-2012, 03:53 PM   #29
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I take every legal tax break and write off I can get.

When I ER'd, I didn't even consider whether I was eligible for unemployment. I'm guessing not because I got some money as part of my separation agreement.

I wouldn't consider applying for food stamps (unless my financial situation changed such that I actually needed them).

I don't know what I'll do about medical. I haven't looked too closely since I thought it was going to be struck down, or might still be repealed. I've got a good deal on a high deductible plan, $208 including dental for an individual policy. I'm still not clear whether that plan will still be available since I didn't get it until Feb 2011. I might just see how much I'll really be paying before deciding whether to take a subsidy.

I guess I just haven't decided in my mind whether it's like any other tax break, or if it's like food stamps (not that I'd qualify for those).
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Old 07-06-2012, 08:25 PM   #30
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Any law has intended and unintended consequences, regardless it's good or bad. But once it's passed and enacted, then everyone should be treated equally per its provisions even though it might not be perfect and still needs further amendment or even total overhaul.

Having moral quandary from time to time may be a good thing, but loosing sleep might not be healthy after choosing to be treated "unequally" from the rest population if they're the majority.
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Old 07-06-2012, 10:12 PM   #31
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There are numerous similar quandaries for those of us who ER with substantial net worth. For the next few years I will be living principally off of taxable account withdrawals so unless it makes sense to do some Roth conversions my taxable income will be very low since my fixed income AA is all in tax deferred accounts. As a result, I may well be eligible for tax credits towards property taxes for "lower" income people, partially subsidized health care, etc.

I've decided that I will take full advantage of any such benefits if I rightfully qualify for them. I paid a boatload of taxes during my better working years and I they design a program poorly such that I fall into it it is not my problem.
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Old 07-07-2012, 05:44 AM   #32
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Just keep in mind that even if Mass. Health works the way you think it might, it won't work that way anymore in 2014. Federal law establishes the bare minimum, states can expand on it, but they can't have looser restrictions.
Florida uses both earnings and value of your investments, for food stamps, it's something like $2000 limit. The Obamacare uses adjusted gross income, but not net worth.
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Old 07-07-2012, 07:18 AM   #33
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I think life would be way too complicated if you kept second guessing the moral implications of laws as written. There are many inconsistencies and moral dilemmas out there. I generally ignore them and comply with the rules in effect.
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Old 07-07-2012, 08:38 AM   #34
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I think life would be way too complicated if you kept second guessing the moral implications of laws as written. There are many inconsistencies and moral dilemmas out there. I generally ignore them and comply with the rules in effect.
I agree with you. Although my pension being reported as yearly income will never allow me to participate in any of these dilemmas . Take pb4's situation above. I fully agree with his view. He has already paid the taxes on that income. If he had just blown through the money yearly never saving any of it, no one would say he wasn't eligible to take advantage of the law since he would have no income or assets. But since he decided to save it instead of blow it, he now wouldn't be eligible? If the law allows it in his case, take advantage of it.
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