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Old 04-01-2013, 12:22 PM   #221
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I wonder about the incentives for fraud given the subsidies, cliff/cutoffs, etc. If my cousin is below 400% of the FPL, has 3 kids and is getting the subsidy and a family insurance plan, there's a lot of incentive to enroll my child under her insurance plan if I'm above the 400% cutoff. She's paying the family rate for insurance (so one more child won't cost more, right?). That would be the most difficult dodge to conduct (requiring one false birth certificate), the easier stuff (income hiding, etc) will be very common near the subsidy cutoff.
I think that would be outright fraud and if you and your cousin want to take the risk of getting caught and the resulting jail time you are probably welcome to try. Risk management.
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Old 04-01-2013, 12:24 PM   #222
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Not to add another line in a very long formula, but won't insurance premiums still be tax deductible?
For those over the cliff, that could provide some small solace, or is there a 'second cliff' (income level) where that deductible would no longer apply?
Yes, deductible if over 10% of AGI so there would be a second order tax benefit that would partially mitigate the effect of the cliff on an after-tax basis.
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Old 04-01-2013, 12:28 PM   #223
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Yes, deductible if over 10% of AGI so there would be a second order tax benefit that would partially mitigate the effect of the cliff on an after-tax basis.
Can you say: byzantine? ACA will be a full employment act for accountants. At this point, I have a headache just trying to figure out where I'll stand in 2014.
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Old 04-01-2013, 12:46 PM   #224
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At this point, I have a headache just trying to figure out where I'll stand in 2014.
Hopefully on your own two feet.

Yes, there is a lot that is still unknown and the result is much confusion. Like anything else this complex, it will work out over time and those who take a deep breath and remain patient will avoid unecessary stress.
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Old 04-01-2013, 01:01 PM   #225
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Hopefully on your own two feet.

Yes, there is a lot that is still unknown and the result is much confusion. Like anything else this complex, it will work out over time and those who take a deep breath and remain patient will avoid unecessary stress.
Yes, reading all the threads makes me want to tear my hair out because they are confusing. I need to find out if ACA covers hair replacement?
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Old 04-01-2013, 01:04 PM   #226
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Can you say: byzantine? ACA will be a full employment act for accountants. At this point, I have a headache just trying to figure out where I'll stand in 2014.
Get a grip. I think you overstate the complexity. Just remember, the subsidy is based on MAGI (before deductions) and the deduction will likely be based on insurance premiums and health care costs paid just like has been for years.

If you get a refund or have to repay under the subsidy you would reduce or increase next year's deduction - just like we do today for the state income tax deduction.

In principle, the subsidy true-up works just like actual and estimated taxes and taxes due or refunds work today and the deduction will work just like state income tax deductions work today. Easy.
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Old 04-01-2013, 02:39 PM   #227
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Yes, deductible if over 10% of AGI so there would be a second order tax benefit that would partially mitigate the effect of the cliff on an after-tax basis.
If find it ironic, or maybe the word is tragic, that the one element in place to help mitigate somewhat, the high cost for people paying "the full freight "
was adjusted upward to 10% from 7.5 % right when they needed it the most. It appears to widen the disparity in "fairness" ( I hate that word) between people who receive it as a benefit from those who buy it. The company paid health benefit, I get, but the buying family members insurance with pretax dollars, while the individual who has to purchase his own policy, can't, escapes me.
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Old 04-01-2013, 02:50 PM   #228
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If find it ironic, or maybe the word is tragic, that the one element in place to help mitigate somewhat, the high cost for people paying "the full freight "
was adjusted upward to 10% from 7.5 % right when they needed it the most. It appears to widen the disparity in "fairness" ( I hate that word) between people who receive it as a benefit from those who buy it. The company paid health benefit, I get, but the buying family members insurance with pretax dollars, while the individual who has to purchase his own policy, can't, escapes me.
You're looking for logic but talking about equity.
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Old 04-01-2013, 02:50 PM   #229
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Can you say: byzantine? ACA will be a full employment act for accountants. At this point, I have a headache just trying to figure out where I'll stand in 2014.
As to the tax thing, if you get ahold of turbo tax or its brethern, you just enter the numbers and it decides if you can deduct medical expenses. So you would just need to know what you paid for medical insurance and treatment, type the numbers in and presto. Just like the amt is no sweat in terms of calculations under a tax program. Yes if you are still filling out the forms by hand, but for the low price of a tax program, or if eligible where the price for a simple return is $0, use the program.
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Old 04-01-2013, 03:08 PM   #230
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You're looking for logic but talking about equity.
Marko, I like the word "equity", btw. I should have squeezed that word in somewhere and left "fairness" out. It makes me sound less like a
"crybaby".
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Old 04-01-2013, 03:32 PM   #231
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I think that would be outright fraud and if you and your cousin want to take the risk of getting caught and the resulting jail time you are probably welcome to try. Risk management.
Yes, it would definitely be fraud. But folks risk going to jail for much less than this amount all the time. And, if Medicaid is any guide, the government has proven much less proficient in finding and prosecuting fraud than has the private sector. Prosecuting fraud just seems to be a very low priority when the goal of a particular agency is to push money out the door to providers, get people medical care, etc.
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Old 04-01-2013, 03:42 PM   #232
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Yes, it would definitely be fraud. But folks risk going to jail for much less than this amount all the time. And, if Medicaid is any guide, the government has proven much less proficient in finding and prosecuting fraud than has the private sector. Prosecuting fraud just seems to be a very low priority when the goal of a particular agency is to push money out the door to providers, get people medical care, etc.
Well, in this case the implementation and enforcement of tax credits is carried out by the IRS, and they suffer no lack of enthusiasm rooting out such fraud.
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Old 04-01-2013, 04:09 PM   #233
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Seems to me that for something this big, this life-changing and only 8 months away, that we'd all be better informed as to what to expect and how it will all work.

Despite a very informed clientele that visits this site, all the threads on this subject remain full of speculation and suppositions. I can only imagine how un-informed the average person is.

I spent an entire career rolling out new products and services and can't believe the lack of definitive, clear information for something this huge, this late in the game. You need to be pro-active, and go out and engage the public if you want buy-in...

Gimme a pamphlet, a central website, some TV ads... something to help inform and sell this program.

Just my two cents.
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Old 04-01-2013, 04:19 PM   #234
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Seems to me that for something this big, this life-changing and only 8 months away, that we'd all be better informed as to what to expect and how it will all work.

Despite a very informed clientele that visits this site, all the threads on this subject remain full of speculation and suppositions. I can only imagine how un-informed the average person is.

I spent an entire career rolling out new products and services and can't believe the lack of definitive, clear information for something this huge, this late in the game. You need to be pro-active, and go out and engage the public if you want buy-in...

Gimme a pamphlet, a central website, some TV ads... something to help inform and sell this program.

Just my two cents.
Marko, since you live in mass

the mass health connector website has a full page of things to meet ACA.

you need to go to the subsidized plan page then click on the thing that says regarding federal isurance changes.

as far as i can tell other than adding 300-400 of poverty to eligibility i don't see any changes
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Old 04-02-2013, 07:33 AM   #235
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Marko, since you live in mass

the mass health connector website has a full page of things to meet ACA.

you need to go to the subsidized plan page then click on the thing that says regarding federal isurance changes.

as far as i can tell other than adding 300-400 of poverty to eligibility i don't see any changes
Thanks, I didn't know that; which more or less makes my point.

IIRC, when the MA law was passed there were all sorts of PSAs, TV/newspaper ads and mailers; explaining what everyone's responsibility was.

Now a similar plan is going nationwide, and .... crickets. I run into people who still think this plan is going to be free for everyone!
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Old 04-02-2013, 09:26 AM   #236
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Gimme a pamphlet, a central website, some TV ads... something to help inform and sell this program.
Sometimes we need to be proactive (which is not a new concept to those of us here, right?) Try this link and sign up for their emails. Home | HealthCare.gov
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Old 04-02-2013, 04:42 PM   #237
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I'm not sure this has been covered here yet, but I found this article interesting...about how you could potentially end up with a higher tax bill in 2014 if you use your 2012 income when using government subsidies to buy health insurance and ultimately have a higher income in 2014.

Obamacare credits could trigger surprise tax bills
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Old 04-02-2013, 04:58 PM   #238
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If Intuit or another company isn't seeing this whole ACA thing as a HUGE business opportunity, they are very foolish. Software allowing a person to optimize their choices is going to be very valuable, especially if it can integrate with the customer's tax return information. The ideal software will also get right down to the state level, allowing people to see and choose from the available options (by company, by "bronze," "silver," and "gold" level, etc) in each "exchange". The software could allow users to see/decide on SS withdrawal strategies, 401K withdrawal strategies, tIRA-to-Roth conversion strategies, etc, etc

Optimization software would easily be worth a couple hundred dollars to many folks. There's no way a few government web sites or info pamphlets will allow a user to cut through the morass of "what-if" scenarios presented by this program (and the other interdependent government programs--tax code, SS, etc).
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Old 04-02-2013, 08:51 PM   #239
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AP came out with a story about Obamacare subsidies.

Health Subsidies: How Much Do You Qualify For?
By The Associated Press
(AP) -- Starting next year, President Barack Obama's new health care law will offer subsidies to help people buy private health insurance on state-based exchanges, if they don't already get coverage through their employers. The premiums paid by taxpayers will be tied to their income, with the government subsidies making up any shortfall.
___
Single adult
Age: 30
Income: $30,000
Annual cost of health insurance: $3,440
Government subsidy: $932
Annual premium paid by taxpayer: $2,509
___
Family of four
Age of policyholder: 30
Family income: $30,000
Annual cost of health insurance: Eligible for Medicaid, the government-run health insurance program for the poor.
___
Family of four
Age of policyholder: 40
Family income: $50,000
Annual cost of health insurance: $12,130
Government subsidy: $8,745
Annual premium paid by taxpayer: $3,385
___
Family of four
Age of policyholder: 50
Family income: $75,000
Annual cost of health insurance: $16,858
Government subsidy: $9,733
Annual premium paid by taxpayer: $7,125
___
Family of four
Age of policyholder: 60
Family income: $90,000
Annual cost of health insurance: $24,042
Government subsidy: $15,492
Annual premium paid by taxpayer: $8,550
___
Note: Premiums are estimates of average premiums for 2016, by the Congressional Budget Office.
Source: The Henry J. Kaiser Family Foundation.
Online: Health Reform Subsidy Calculator - Kaiser Health Reform
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Old 04-03-2013, 07:38 AM   #240
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I need to apologize for my earlier error. I've messed around quite a bit with the Mass Health Connector and didn't see the kind of cliff thing that is indeed apparently an aspect of the ACA subsidies. I've now looked much more closely into how the subsidies work on the federal level. My assumption that ACA wouldn't have a big cliff was wrong.

Having said that, I think that that is something that needs to be fixed. I know it would cost more, and so it might be hard to fix it for at least the next few years, but once stuff like sequestration is in the rear-view mirror, ACA should be updated to provide subsidies much closer to a smooth curve rather than the rather untoward step function it is today. That remedy explicitly shouldn't adversely impact those who cannot readily afford to pay for insurance themselves.
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