Poll: Will you need/use an ACA subsidy for health insurance?

[daylatedollarshort]

OT: That's what we call a 'scraper'. 1.8M for a corner lot in Palo Alto that's a 15 minute walk from FaceBook's corporate headquarters, and three blocks from the University Ave shopping district. Scrape, put 600K into constructing a 2 story McMansion, and list for 3M plus for a nice profit.

Yeah, I know, it was a little dark humor left over from the recent house / net worth thread, since we've been house hunting in the Bay Area and that somewhat epitomizes what we've been seeing, even though we are looking in more middle class neighborhoods.

 

[W2R]

Yeah, I know, it was a little dark humor left over from the recent house / net worth thread, since we've been house hunting in the Bay Area and that somewhat epitomizes what we've been seeing, even though we are looking in more middle class neighborhoods.

How discouraging! But don't be disheartened; as you know house hunting can be full of alternating thrills and disappointments, but hopefully eventually you can come up with something nice that is just right for you. Good for you to be approaching the task with a sense of humor, which I think helps.

 

[brewer12345]

I tend to view the subsidy system as just another part of the tax code that makes the income tax code for MAGI between 35k and 95k extremely progressive for a family of 4. I don't understand the vitriol this whole thing invokes in some. There are a whole host of things I think are government sponsored abominations, but I can do absolutely squat about them so I don't bother incurring significant brain damage over things that I have as much control over as gravity.

This year will be a low income one for us, so we qualified for a subsidy and intentionally structured our finances to maximize it. 2015 will be a much higher income year for us, so we will not qualify for a subsidy. Instead we will run the healthcare premium expense through DW's small business and make use of an HSA to minimize taxes. I don't see any real difference ethically between what we do in 2014 and 2015. Anyone who wishes to try to enlighten me is encouraged to try.

I assume that the subsidies will eventually go away entirely, be subject to an asset test, or be heavily scaled back. So I will take them so long as I am eligible, but they are not part of my long term plans. That is part of the reason I am kicking the can on Roth conversions for now as well.

 

[daylatedollarshort]

How discouraging! But don't be disheartened; as you know house hunting can be full of alternating thrills and disappointments, but hopefully eventually you can come up with something nice that is just right for you. Good for you to be approaching the task with a sense of humor, which I think helps.

Thanks for the encouragement. The smart thing to do would just be to move further out, since we no longer have the full time tech jobs that are helping to push up the prices. But we like the weather, activities and the access to mass transit we have now, so maybe we will stay put. In the scheme of things I am sure this falls under "first world problems" and I try to remember each day to just be happy to have potable water and a warm bed to sleep in.

 

[LOL!]

I guess what I see is a lot of unintended consequences from the way the rules are written. I suppose that is always the case. Then more rules get written in an almost ad hoc way to try to prevent the previous unintended consequences which in turn cause more unintended consequences ad infinitum.

And then we end up with a complicated mess.

For myself, if I am somehow eligible for a subsidy in the future, you can be damn sure that I will claim it.

 

[aaronc879]

I'm still in the accumulation phase and have a low income. I need the subsidy to be able to afford to pay for health insurance and still spend less than my low income. I will be paying close attention to whether those of us in a State Exchange will still get to have a subsidy. I will forgo health insurance rather than pay the full freight.

 

[easysurfer]

I'm avoiding the ACA subsidy with a ten foot pole

 

[aaronc879]

I'm still in the accumulation phase and have a low income. I need the subsidy to be able to afford to pay for health insurance and still spend less than my low income. I will be paying close attention to whether those of us in a State Exchange will still get to have a subsidy. I will forgo health insurance rather than pay the full freight.

I meant to say those of us in the Federal Exchange who don't have the option of a State Exchange.

 

[donheff]

A lot of posters here rely on an ACA subsidy and all the more power to them. Unfortunately, if gotten through the Federal exchange, they will have to worry until June about whether the Supreme Court will rule they were never eligible. Congress could fix that nightmare scenario today with a single line of legislation but good luck with that. If the SC wipes them out do you suspect that Congress will throw a bone to those of you who got one by waiving repayment for subsidies already received and used?

 

[sengsational]

A lot of posters here rely on an ACA subsidy and all the more power to them. Unfortunately, if gotten through the Federal exchange, they will have to worry until June about whether the Supreme Court will rule they were never eligible. Congress could fix that nightmare scenario today with a single line of legislation but good luck with that. If the SC wipes them out do you suspect that Congress will throw a bone to those of you who got one by waiving repayment for subsidies already received and used?

The US does not break promises. That is not something they want to be known for. So I just don't think it's realistic that a promise that was made would be broken. So in light of that, I think that unless something happens before I hit "enter" on healthcare.gov November 21 (or whenever), I'll be good for my subsidy for 2015.

 

[daylatedollarshort]

I'm no worse off than the ~$2,300 a month we were paying before for a captive audience, COBRA conversion sham policy anyway.

 

[bmcgonig]

OT: That's what we call a 'scraper'. 1.8M for a corner lot in Palo Alto that's a 15 minute walk from FaceBook's corporate headquarters, and three blocks from the University Ave shopping district. Scrape, put 600K into constructing a 2 story McMansion, and list for 3M plus for a nice profit.

Not much of a house in PA for 600k construction costs. I'd say that's it's at least $400 sq ft to build an appropriate house there.


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[donheff]

The US does not break promises. That is not something they want to be known for. So I just don't think it's realistic that a promise that was made would be broken. So in light of that, I think that unless something happens before I hit "enter" on healthcare.gov November 21 (or whenever), I'll be good for my subsidy for 2015.

Seems to me we break them all the time. But, on the ACA, if it was a promise (and I agree that it was) the SC could not legitimately rule the subsidies out. The theory of the case is that the law never provided subsidies for people purchasing from the Federal exchange (thus there was no promise). Seems nutty to me but who knows what five justices may decide.

 

[rodi]

I budgeted using the CA covered prices and cobra prices when I pulled the trigger for retirement.

That said - our household budget for a family of four will likely qualify us for a subsidy for 2015. (I retired mid year - so we don't qualify for 2014.)

If I get the subsidy - woo hoo. But I didn't rely on it to retire.

That said - I did take out a HELOC (currently untapped) - and may play with that in order to shift expenses to the next year if I have unanticipated major expense that kick us more than $10k above our budget. That cliff is something that should be planned for... if I can only be on the wrong side of the cliff one year, if I have a major one time expense that incurs more MAGI... I'll use the HELOC for income shifting to allow a different timing of IRA withdrawals.

 

[MichaelB]

I would if I could but I can't so I won't.

 

[Theseus]

I think the word "manipulate" is a loaded word with a negative spin. Something like "arrange your income streams to maximize ACA subsidies" would be more neutral.
What is wrong with making arrangements to minimize taxes, maximize benefits?

I maxed out the 401k to save taxes. So I "manipulated" my income to save taxes. Should I not "manipulate" my income? The law allows one to take legal steps for maximization. Should one not "file and suspend" for SS? Should I not sign up for Medicare at 65?

jim, I understand your point but you seem to be overreacting.

I think that a more neutral word is "pragmatic".

Disclaimer - fully intend to use the subsidy if available to me. Just as I used maximum 401 deduction, home mortgage, and yes, it looks like this year even the deduction for healthcare related expenses. Such is life.

 

[John Galt III]

I'll need to figure out how to increase taxable income to qualify for subsidy and not fall into under medicaid rules for a state that doesn't have the expansion.

Same here. I'm in Pa. I had originally planned to take a small distribution from an IRA to increase my 2014 income to qualify for ACA and avoid Medicaid. But lately have been hearing good things about Medicaid (and bad things). With Medicaid I would avoid all the sneaky gotchas like uncovered "facility fees", out-of-network person showing up uninvited, etc. But I can't find out how, in reality, to use Medicaid in Pa, and if it really is as horrible as some people say. Don't know anyone on Medicaid. Will call a local hospital that accepts Medicaid patients and ask to talk to someone about it.

 

[travelover]

I think that a more neutral word is "pragmatic".

Disclaimer - fully intend to use the subsidy if available to me. Just as I used maximum 401 deduction, home mortgage, and yes, it looks like this year even the deduction for healthcare related expenses. Such is life.

And I suspect more than a few here got healthcare provided to them tax free while others had to pay for their healthcare with after tax dollars. Fair is when you get, unfair is when they get.

 

[Charlotte]

When I researched it last year for BlueCross, the policies from the exchange were exactly the same as those bought right from BCBS...after purchase, one can not be distinguished from the other.

In researching our options for next year, this scenario seems to be the direction I think I want to go. I want a plan that is widely accepted and not immediately identifiable as from the exchange. (Just in case there is some discrimination against the plans.). And then within the plan, (Blue Advantage is what I am looking at, in this instance, I live in NC), I can choose the level Bronze, Silver or Gold within my level of risk tolerance and expected expenses.

Does anyone know of this thinking is correct? That if my circle of doctors all accept "Blue Advantage" from Blue Cross Blue Shield, that the level (bronze, silver, gold) doesn't cause further accept/do not accept decisions from the practitioners? The levels just determine the payment split between insurer and me? Am I thinking about this correctly?


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[GTFan]

My impression (could be wrong) is that some folks are trying to adjust their cost of living (i.e. expenses) to be lower in order to qualify for a subsidy. So instead of living on $100K a year, they forego nice cars, nice vacations, nice retirement locations and drive their expenses to cardboard box housing in order to qualify for a subsidy while have tons of money in their portfolio. Wait a minute, that does sound very negative, doesn't it?

That is a ridiculous and completely unfounded impression, I figured there was an agenda here. I can live on a $40k draw a year which may be less than $20k in ACA income, and I can assure you that I'm not sacrificing anything to do that in retirement because I'm living on that now before I retire.

You have no idea what anyone needs to spend to live anywhere, and as pointed out you can have siginficantly higher income and still get subsidies.

 

[sengsational]

...
Does anyone know of this thinking is correct? That if my circle of doctors all accept "Blue Advantage" from Blue Cross Blue Shield, that the level (bronze, silver, gold) doesn't cause further accept/do not accept decisions from the practitioners? The levels just determine the payment split between insurer and me? Am I thinking about this correctly?

Concerning the network decision, you can look-up each doctor on the bcbsnc.com site and see what plans they take. I did this last year and found that for the handful of doctors that my family went to, if they took one, they took them all. As a result, for me, it was not worth going past "Blue Value" (the lower premium, smaller network) to "Blue Advantage" (higher premium, larger network). Even a bunch of unexpected random hospital-based doctors we used this year were in the "Value" network. This selection is what determines if your doctor is "in" or not. Metal levels just determine the split, like you said.

Concerning the metal level to select, I ignore what the average payout is calculated to be and work through how much I'd pay for expected services (based on personal historical useage). For instance, is it worth $2400/yr in premiums so you can pay $30 (instead of $130) for your doctor visits? It would depend on how many doctor visits you expect to have. 24 visits was way more than we expected, for instance.

One warning: never buy an HSA-eligible policy with more than one person on it unless you expect three people on the policy to exceed their individual deductible; the individual deductible is meaningless on HSA-eligible policies.

 

[Accidental Retiree]

We're receiving the tax credit because we're eligible. No "manipulation" required.

Boy oh boy, though, are Anthem and CoveredCA making me sorry we moved south 5 months ago. (Not really, but....)

I had no idea that our moving would cause them so much confusion and generate so much paperwork.

First, our premium supposedly dropped by $300/mo but the portion we pay increased 5 fold. New county, lower premium, much lower tax credit.

Those 2 groups still haven't got us sorted out.

A couple of weeks ago we received at our new address a letter from Anthem, telling us our 2015 premiums are going up 34%.

Three days ago I got a third refund check from Anthem for overpayment
on our 2014 premiums.

Two days ago I finally got from Anthem our new 2014 premium--so they finally got our info from CoveredCA after 5 months. They wouldn't take it from me and sent 3 total refund checks for the new premium amount we had to pay.

Yesterday I got 2 pieces of mail from Anthem: one, a bill from March onward; the other a notice they are canceling our insurance for nonpayment from March forward.

Yes, we paid.

What a mess.

 

[Accidental Retiree]

In researching our options for next year, this scenario seems to be the direction I think I want to go. I want a plan that is widely accepted and not immediately identifiable as from the exchange. (Just in case there is some discrimination against the plans.)

Does anyone know of this thinking is correct? That if my circle of doctors all accept "Blue Advantage" from Blue Cross Blue Shield, that the level (bronze, silver, gold) doesn't cause further accept/do not accept decisions from the practitioners? The levels just determine the payment split between insurer and me? Am I thinking about this correctly?


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Before visiting a dermatologist in our new location, I checked the Anthem website for a name.

I got one, and I called to see if they took my Anthem bronze plan. Yes.

When I arrived and gave them my card, they said they did not take the Plan and said I should have specified it was a Covered CA Anthem Bronze plan.

I left and found another doctor.

 

[FUEGO]

Voted "I will try to manipulate my income in order to qualify and get an ACA subsidy". I guess I would have needed to work longer to afford the full freight insurance costs plus save extra to cover unknown extent of future increases or adverse rating by insurers for pre-existing conditions that develop over time. So maybe "I need ACA to pay for my health insurance" is also true. It looks like we'll get $4000-5000 per year in subsidies plus access to free health insurance for our kids through the state's low and moderate income children's health insurance program.

I'm definitely aware of the % FPL I need my AGI to be to optimize ACA subsidies. I have different sources of income that can increase AGI or not, and plan to come in around 133-150% of FPL at least while I have 3 kids in the house.

Edit to add: I can, for example, sell $40,000 of slightly appreciated stock in my brokerage account and recognize a $4000 gain from that sale. That means I could live on the $40k I need to fund my desired lifestyle, and only have a $4,000 AGI. I can then convert $33,000 from my traditional IRA to Roth in order to arrive at a $37,000 AGI (just enough to pay almost nothing for a gold plated silver plan). I can shape my income stream to have almost any AGI I wanted. I could even "make too much" and get my kids off the state Children's Health Insurance Program if they needed "regular" health insurance.

 

[M Paquette]

Ah, the old in/out of network doctor ploy. Yes, yes...

We've been through this song and dance a few times. I finally got wise when I found that buying a UHC plan from one broker, and supposedly the same plan from another broker, would get me DIFFERENT networks of doctors. Some poking around turned up that there were many sets of plans, with identical benefits, but different doctors, that were 'qualified' for sale by different insurance brokers and networks. One guy told me that top producers got the plans with the better networks.

As best as I can figure, the actuaries were looking at the risk pools not just by where the insured lived and the allowed lifestyle/medical history choices (smoker or not, type of work, surgery in last year, etc) under state regulation, but also by who was selling the coverage, which was not restricted by state regulation. I suspect that if a salesman tended to sell to higher risk folks in a particular pool, the policies were attached to doctors who had agreed to a lower negotiated rate.

This was back in 2008. It sounds like some of the same stuff is still going on.