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

[LOL!]

I see lots of posts about trying to minimize the poster's income in order to qualify for a health insurance subsidy. I guess in the old days, everyone tried to maximize their income so that they could pay for health insurance in retirement.

In some sense, this has changed the equation significantly for many folks. I also find it hard to believe that these folks all voted for policitians who support this as well even though it appears to have been in their best interest. That is, folks will embrace it even if they didn't vote for it.

So even if this poll is flawed, let's see how folks vote.

For my health insurance now or in the future ...

I need an ACA subsidy to pay for health insurance
I will try to manipulate my income in order to qualify and get an ACA subsidy
I would use an ACA subsidy, but won't manipulate my income, and can still have health care
I will not use an ACA subsidy for my health insurance
Something else, but at least I answered the poll

Thanks for participating.

 

[REWahoo]

Thanks for including an "I want to vote, too" option for those of us on Medicare.

 

[W2R]

Thanks for including an "I want to vote, too" option for those of us on Medicare.

Oops! I voted "I will not use an ACA subsidy for my health insurance". I am on Medicare too, with employer-subsidized retiree medical insurance picking up what Medicare doesn't.


If there had been a category, "I thank heavens every day that I don't have to plow through all the information and misinformation about ACA", I would have picked that one.

 

[Live And Learn]

My budget includes HI at the ACA unsubsidized premium plus full OOP max each year.

I voted "I would use an ACA subsidy, but won't manipulate my income, and can still have health care".

I think my income will actually be below the max so that I would qualify for a subsidy. In theory my plan is to use the half the subsidy plus any amount I don't spend of the OOP maximum to fund some travel, and save the other half. If I end up with no subsidy, and actually spend all the OOP max, then I won't travel. Considering that we leave home for vacations only once every 3 or 4 years we won't really miss it.

 

[sengsational]

To me, the subsidy is just a part of the overall tax equation.

Most of us have been attempting to legally minimize taxes since we earned our first dollar. Why stop now?

 

[fh2000]

I voted this: "I will try to manipulate my income in order to qualify and get an ACA subsidy"

That sounded negative, so I will say that I will 'adjust' my income thru ROTH and HSA. If income is high still, I will sell my muni bonds to reduce tax exempt interest.

 

[pb4uski]

At one time I was considering managing (rather than manipulating ) my income to qualify for ACA subsidies.

But I later decided that the value of doing more Roth conversions between ER and when RMDs begin and reducing my years in the 25% bracket once RMDs begin exceeded the value of the subsidies. IOW, my projected net worth foregoing ACA subsidies and doing Roth conversions was higher than taking subsidies and foregoing Roth conversions. YMMV.

 

[jim584672]

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?

 

[pb4uski]

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

 

[LOL!]

What is wrong with making arrangements to minimize taxes, maximize benefits?

Nothing wrong with that, except some folks got mad at Mitt Romney for doing the same thing.

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?

And I have certainly set things up so that I should not have to pay income taxes in retirement.

 

[aim-high]

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.

 

[jim584672]

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.

Roth conversions?

 

[jollystomper]

Given the projected size of my pension it is going to be awfully tough to manipulate my income to qualify for a subsidy... so I'm focusing on the path of building in expected insurance costs w/o subsidy into my retirement planning.

 

[aim-high]

Roth conversions?

Roth conversions will work to start . . . I'll do as much as possible to stretch them out. We should have enough to make it until we're medicare eligible, but it will be close.

 

[Which Roger]

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?

Almost all of the discussion on this board has been about reducing income, not expenses. If I want to buy lunch, I can withdraw 10 dollars from my bank account and have 0 income. Or I can take a distribution of 10 dollars from my 401k and have 10 dollars of income.

 

[audreyh1]

I initially assumed folks whose income is too high to qualify for ACA subsidy would answer

I will not use an ACA subsidy for my health insurance

But reading the answers, another poll response could be used:

I would use an ACA subsidy, but won't manipulate my income, and can still have health care

So that is very ambiguous, and I suspect you will get folks answering either response. That makes the poll results much less useful.

 

[Dash man]

We won't qualify for a subsidy between two pensions, rental income and interest and dividend income in taxable accounts, so we'll just pay for insurance.


Sent from my iPhone using Early Retirement Forum

 

[daylatedollarshort]

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?

And I have certainly set things up so that I should not have to pay income taxes in retirement.

400% of the federal poverty level for a family of 4 is $95,400, O-AGI, which does not include deductions for business expenses, business trips, HSA contributions, etc. There is no asset test so assets like home value and cars are not included.

One could live in this delightful diamond in the rough for $1.8M and still qualify:

http://valleywag.gawker.com/hoarders-house-in-palo-alto-is-on-the-market-for-1-8-m-1648912478

 

[athena53]

I'm still wary of Exchange policies. My regular doc takes my private policy with Coventry but not Coventry's policy bought off the Exchange. Not sure if we'd ever qualify for a subsidy- a lot of our savings are outside IRAs and we can get big capital gain distributions in good years- but irrelevant for us. DH gets Medicare.

 

[RunningBum]

I initially assumed folks whose income is too high to qualify for ACA subsidy would answer

Quote:
I will not use an ACA subsidy for my health insurance

But reading the answers, another poll response could be used:

Quote:
I would use an ACA subsidy, but won't manipulate my income, and can still have health care

So that is very ambiguous, and I suspect you will get folks answering either response. That makes the poll results much less useful.

Yeah, I was a bit confused by that too. After all, I would use the subsidy, but will not manipulate income for this year, anyway, and I will have health insurance...just not subsidized. I think "subsidized health care" should be the term in that option.

Anyway, my thought is that I have a lot of conversions to Roth I want to do, so while I'm younger and my rates are lower I will go ahead and do them, and in fact above the 15% bracket this year and maybe next. Right now the subsidy would barely help me from my initial look at my options for next year. As I get closer to 65, I may skip conversions and do a few other things if necessary to get the subsidy since my premiums would be higher.

The drawback to this, of course, is that the subsidy could change or be eliminated by that time. I can't see the subsidy cliff lasting very long. Most limits in the tax code are tapered so there is no such cliff.

 

[RunningBum]

And now, re-reading the poll, it says "now or in the future", and the answers to those are different, so like most polls, I'll just skip answering.

 

[pb4uski]

+1 I think it is likely that the cliff will catch some people by surprise (overtime, raise, or whatever) and they will be hopping mad with the commensurate political drama. I hope I am wrong.

 

[M Paquette]

One could live in this delightful gem for $1.8M and still qualify:

Hoarder House In Palo Alto Is On the Market for $1.8 Million

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.

 

[sengsational]

I'm still wary of Exchange policies. My regular doc takes my private policy with Coventry but not Coventry's policy bought off the Exchange.

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.

 

[scrabbler1]

I answered the last choice because none of the more specific ones adequately described my personal situation. Here was my thought process:

I need an ACA subsidy to pay for health insurance

I qualify for a fairly small subsidy, so I don't really "need" one to pay for my HI. Just having a decent, affordable HI policy through my state's exchange is a vast improvement to the two options I tried out in the first 5 years (2009-2013) of my ER.

I will try to manipulate my income in order to qualify and get an ACA subsidy

It is not likely I will have to manipulate my income to qualify and get a ACA subsidy. I am near the top end of MAGI to qualify for my fairly small subsidy. However, I have the ability to do some tax-loss harvesting in case my income happens to exceed the MAGI limit (most likely due to a late-year cap gains distribution spike). I won't pull the trigger on the TLH unless I need to, as it is not an endless source of "negative" income.

I would use an ACA subsidy, but won't manipulate my income, and can still have health care

This is probably the closest choice for me but because of what I wrote just above, I did not select it because I will manipulate my income to retain the subsidy if I have to.

I will not use an ACA subsidy for my health insurance

Surely not true for me.

Something else, but at least I answered the poll

Therefore, I was left with this answer and explanation.