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Old 04-03-2013, 07:51 AM   #241
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...., ACA should be updated to provide subsidies much closer to a smooth curve rather than the rather untoward step function it is today....
A smooth curve would be the fair thing. That extra "one dollar" in income will cost a working family $10K or more in extra cost!

The all-or-nothing cliff will surely discourage folks to move up the career ladder; the cost of success will be too high unless it's more than an intermediate step. "Thanks for the promotion boss, but...no thanks"
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Old 04-03-2013, 08:02 AM   #242
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A smooth curve would be the fair thing. That extra "one dollar" in income will cost a working family $10K or more in extra cost!

The all-or-nothing cliff will surely discourage folks to move up the career ladder; the cost of success will be too high unless it's more than an intermediate step. "Thanks for the promotion boss, but...no thanks"
I agree with the thought - but one could accept the promotion and make/increase 401k, deductible IRA or HSA contributions (if eligible) to stay under the 400% FPL. An unintended consequence is that it might encourage middle-class retirement savings.
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Old 04-03-2013, 08:14 AM   #243
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I agree with the thought - but one could accept the promotion and make/increase 401k, deductible IRA or HSA contributions (if eligible) to stay under the 400% FPL. An unintended consequence is that it might encourage middle-class retirement savings.
True, but I think we need to double check that IRA contribution keeping the MAGI low. IIRC, the O-MAGI includes any IRA/401k contributions as an exception to the usual MAGI calculation.
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Old 04-03-2013, 08:24 AM   #244
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Originally Posted by marko View Post
A smooth curve would be the fair thing. That extra "one dollar" in income will cost a working family $10K or more in extra cost!

The all-or-nothing cliff will surely discourage folks to move up the career ladder; the cost of success will be too high unless it's more than an intermediate step. "Thanks for the promotion boss, but...no thanks"
Smooth curve is obviously better. I suspect it was done this way because there is just not the money to make if affordable for those with very low incomes and low incomes and still smooth at the same time. Also I believe the tax credits will grow by the rate of inflation and not premium growth which is expected to be higher. So even this level of tax credits I suspect are not really sustainable. Hopefully the solution to that will be a smoother cuts at the top end of 400% FPL and not another cliff.
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Old 04-03-2013, 08:24 AM   #245
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True, but I think we need to double check that IRA contribution keeping the MAGI low. IIRC, the O-MAGI includes any IRA/401k contributions as an exception to the usual MAGI calculation.
See posts #39 and #45 of Who's going to try to get ACA subsidies by staying under the threshold?

Since the start of the O-MAGI calculation is tax return AGI (which is reduced by 401k and deductible IRA contributions) and there is no specified add-back for either of those items, it appears to me that the have the effect of reducing O-MAGI.

Do you have a cite for the exception you are thinking of?
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Old 04-03-2013, 08:31 AM   #246
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I believe the definition is found in 26 USC § 36B(d)(2)(B)
Quote:
Modified adjusted gross income
The term “modified adjusted gross income” means adjusted gross income increased by—
(i) any amount excluded from gross income under section 911,
(ii) any amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax, and
(iii) an amount equal to the portion of the taxpayer’s social security benefits (as defined in section 86 (d)) which is not included in gross income under section 86 for the taxable year.
The exclusion in item (i), above, refers to 26 USC § 911 Citizens or residents of the United States living abroad (a):
Quote:
Exclusion from gross income
At the election of a qualified individual (made separately with respect to paragraphs (1) and (2)), there shall be excluded from the gross income of such individual, and exempt from taxation under this subtitle, for any taxable year—
(1) the foreign earned income of such individual, and
(2) the housing cost amount of such individual.
So if I read this right, deductible contributions to IRAs aren't added back into MAGI.


Quote:
Originally Posted by kmt1972 View Post
Smooth curve is obviously better. I suspect it was done this way because there is just not the money to make if affordable for those with very low incomes and low incomes and still smooth at the same time.
Sorry, but I don't buy that. You can change the slope at an inflection point and still have a smooth-enough curve so that $1 of income doesn't cause such a big difference in the subsidy. It just requires straightforward algebra.
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Old 04-03-2013, 08:45 AM   #247
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...So if I read this right, deductible contributions to IRAs aren't added back into MAGI. ...
+1, ditto with 401k contributions and HSA contributions. Only add-backs are excluded foreign income, non-taxable interest and non-taxable SS.
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Old 04-03-2013, 09:09 AM   #248
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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
I checked out the link in this article to Enroll America. Which seems to be a legitimate effort to get the word out and help people sign up for health care.

This from their mission:
Quote:
Enroll America is a nonpartisan 501(c)(3) organization whose mission is to ensure that all Americans are enrolled in and retain health coverage. Enroll America is a collaborative organization, working with partners that span the gamut of health coverage stakeholders—health insurers, hospitals, doctors, pharmaceutical companies, employers, consumer groups, faith-based organizations, civic organizations, and philanthropies—to engage many different voices in support of an easy, accessible, and widely available enrollment process.
And from their description of How We Work:
Quote:
  • We track the latest information on “best practices” for optimizing enrollment and share that information widely
  • We provide guidance and assistance to help states and the federal government adopt streamlined and user-friendly enrollment policies, procedures, and practices.
  • We work to raise awareness of enrollment options among the uninsured and to broaden the range of channels through which uninsured individuals can enroll.
But, I've gotta say, they lost me here. Guess I'm not in the target demographic for this video. Gave me a good chuckle, though!



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Old 04-03-2013, 09:16 AM   #249
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Originally Posted by kmt1972 View Post
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

I am using this as an example.... not directed at you...


So my question is WHY would the cost of insurance for a family of 4 be so different in the above examples Yes, I can see an age difference, but is it that much?

Our company policy is the same for everybody.... young and old... and the two biggest users of health care in our company are on the young side... one guy has a young girl who just hurts herself all the time... another has a wife who had breast cancer...
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Old 04-03-2013, 09:17 AM   #250
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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
<content omitted>...
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
How convenient! They omitted the cliff example. All they had to do was boost the income here to 95k, or make it a family of 3, and the subsidy is ZERO.
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Old 04-03-2013, 09:27 AM   #251
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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).

Two thoughts on this.... first, the vast majority of people are not going to even care one way or the other... most working people will get their insurance from their company... if you do not, then you are likely not making a lot of income and would qualify without doing anything... you then have the people who might benefit, but are clueless... so the potential market for this produce is small (or smallish)...


Second, I do not know what potential liability the company would have if they messed up... IOW, the program says 'do this and you get X credit'.... and something happened and they did not get it... the cliff is pretty big for some people..... I can see class action lawsuit lawyers lining up to sue...

A tax program is different... you either owe the tax or do not owe the tax... if the program makes a mistake, it will not cost the company a big amount because you are still responsible for the tax....
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Old 04-03-2013, 11:44 AM   #252
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Originally Posted by Texas Proud View Post
Two thoughts on this.... first, the vast majority of people are not going to even care one way or the other... most working people will get their insurance from their company... if you do not, then you are likely not making a lot of income and would qualify without doing anything... you then have the people who might benefit, but are clueless... so the potential market for this produce is small (or smallish)...
....
I don't think you realize that the vast majority of people who work for small businesses or who have a small business do not have access to health insurance except through the individual market. The potential market is huge.

I agree that there are a lot of people who will be unable to figure this out. For a while, in Oregon, if a person showed up in the emergency room without insurance they were signed up for the Oregon Health Plan (Medicaid) and qualifying income sorted out later. Perhaps there will be a designated default health care policy as a part of state offerings.
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Old 04-03-2013, 12:03 PM   #253
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I don't think you realize that the vast majority of people who work for small businesses or who have a small business do not have access to health insurance except through the individual market. The potential market is huge.

I agree that there are a lot of people who will be unable to figure this out. For a while, in Oregon, if a person showed up in the emergency room without insurance they were signed up for the Oregon Health Plan (Medicaid) and qualifying income sorted out later. Perhaps there will be a designated default health care policy as a part of state offerings.

Yes, I do realize that... but I would bet that the people who work for small business that do not offer health care are low paid people... IOW, below the line anyhow.... if it is small business that have high wages, they probably offer healthcare... now, I could be completely wrong in my thinking..... but don't care enough to do any research....
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Old 04-03-2013, 12:12 PM   #254
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Do you have a cite for the exception you are thinking of?
I"ve been searching and found nothing.

I may have confused it with the plan to include SS as part of MAGI. Underlines are mine.

From House Report 112-254:
"...Specifically, the bill revises the definition of modified
adjusted gross income for purposes of eligibility for the
premium assistance credit for health insurance purchased
through an exchange--sometimes referred to as an exchange
subsidy--to include the amount of Social Security benefits
and
tier 1 Railroad Retirement benefits that are not includible in
gross income. This definition of modified adjusted gross income
applies also for purposes of eligibility for reduced cost-
sharing with respect to health insurance purchased through an
exchange and for Medicaid for the nonelderly and the Children's
Health Insurance Program...."
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Old 04-03-2013, 01:07 PM   #255
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Our company policy is the same for everybody.... young and old... and the two biggest users of health care in our company are on the young side... one guy has a young girl who just hurts herself all the time... another has a wife who had breast cancer...
I think that is part of differences in group plans and individual plans. Group is under a different set of federal regulations and must cover all employees and can't charge individuals in the group more for conditions/age. Individual plans can be cherry picked/rejected for the same conditions accepted in a group plan. As I recall my megacorp didn't have age based premiums.

I also recall we a fellow whose wife developed MS, and cost a fortune in treatment. In the prior year he was a top performer, after he was rated as needing improvement and then gotten rid of. We all thought it suspicious he was let go when their medical claims skyrocketed.
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Old 04-03-2013, 02:05 PM   #256
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possible problems with signing up for Obamacare subsidies.



To Sign Up For Obamacare, Start Filling Out The Forms Now (And Hire A Good Accountant) - Forbes


i looked at the copy that will be the online form if you want a subsidy. all i can say is wow.


actual link to instruction form


http://waysandmeans.house.gov/upload...s_1_031313.pdf
Interesting. But I think the author of the Forbes article didn't read it very well. The instruction form is really a review for the govt. committee. It says in the preface:
Quote:
The online application is

a dynamic process that’s tailored based on the application filer’s responses to
questions and the electronic verification of data available during the application process.


You can followconditional logic through the italicized directions in the questionnaire

these wouldn’t appear on the
screen.
In other words, a well developed web app would skip most questions based on previous input. Now, whether the govt. programmers come up with a good web app is another question...

Even the paper form at 21 pages is mostly repetition for each person in the household. If you have only yourself and spouse, it is shorter.
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Old 04-03-2013, 02:36 PM   #257
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Interesting. But I think the author of the Forbes article didn't read it very well. The instruction form is really a review for the govt. committee. It says in the preface:

In other words, a well developed web app would skip most questions based on previous input. Now, whether the govt. programmers come up with a good web app is another question...

Even the paper form at 21 pages is mostly repetition for each person in the household. If you have only yourself and spouse, it is shorter.
the advice of getting an accountant might be right
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Old 04-03-2013, 03:08 PM   #258
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the government is hiring people to help you enroll in the ACA


Tens of thousands Obamacare 'navigators' to be hired | WashingtonExaminer.com



http://www.ofr.gov/OFRUpload/OFRData/2013-07951_PI.pdf

additonal explanation
http://thehill.com/blogs/healthwatch...are-navigators
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Old 04-04-2013, 11:29 AM   #259
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The thread is open again after a bit of whittling down. We were discussing implementation related aspects of the PPACA and invite everyone to help keep it on topic.
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Old 04-04-2013, 12:04 PM   #260
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2014 is the key year to see how costs change, how the exchanges are going to work, etc. I think a number of large insurance companies are either going to go out of business or merge with others. The pool of insureds will be larger but much sicker, so the insurance companies will have to compensate somehow, but their reimbursements will be much lower, so that cost will be borne by someone.

Private group insurance will go the way of the dodo, it will be cheaper for companies to drop the coverage they offer to their employees and go into an exchange. The landscape will look far different three years from now. Will the level of care be better? Maybe, maybe not, but we will have to wait and see........
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