Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
Old 03-29-2013, 09:37 PM   #21
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Quote:
Originally Posted by gerrym51 View Post
i agree the calculator suggests this amount. I cannot believe it is correct. California must be super expensive
Yes, the prices on that CA calculator are eye-popping. Coupled with the high cost of living, it makes me wonder whether we can afford to stay in CA after DW retires.
__________________

__________________
FIREd is offline  
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-29-2013, 09:38 PM   #22
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
Quote:
Originally Posted by gerrym51 View Post
this scenario has nothing to do with employers. this is the price the california calculator gives for someone purchasing through the obamacare exchange
But that couple would be buying health insurance at their work place and not at the exchange.

What I was saying is if and when employers decided that they cannot afford to continue to pay for work place health insurance for employees, then every one has to buy insurance from the exchange. And if those are the rates, I cannot see how a lot of family can afford health insurance coverage.
__________________

__________________
bondi688 is offline  
Old 03-29-2013, 09:44 PM   #23
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
Then what is the point of bringing in the ACA when at the end of the day, even if health insurance policy is available for every one to purchase at those exchange, people cannot afford to pay the premium, if those are the rates? People will still be uncovered. They may have to pay the fine like presently in MA instead.
__________________
bondi688 is offline  
Old 03-29-2013, 10:21 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,379
Quote:
Originally Posted by bondi688
Then what is the point of bringing in the ACA when at the end of the day, even if health insurance policy is available for every one to purchase at those exchange, people cannot afford to pay the premium, if those are the rates? People will still be uncovered. They may have to pay the fine like presently in MA instead.
If I understand the penalty for not buying insurance correctly, it can only be collected by confiscating tax refunds. If I wasn't going to buy health insurance, I would make darn sure my withholding forms were set up in a way where I am sending a check instead of a refund. It is hard to imagine much income flowing to the treasury by the penalty process. If I was married and making $70k, there is no way I would pay a third of my income to health insurance. I keep hearing these potential numbers, and I just can't wrap my head around it. If I ever get thrown into the exchange and the premiums are as high as being thrown around here, I better stay nice to my GF. I have a standing offer to get married and jump on her companies subsidized plan of about $200 a month with a very small deductible.
__________________
Mulligan is online now  
Old 03-29-2013, 10:30 PM   #25
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
Mulligan
In MA, if you do not carry health insurance, you forfeit your personal deduction of the state income tax , so you do pay a higher amount of state tax as penalty. But that is a tiny amount compared to the outlandish premium in CA and NY. Yes, you will be better off not buying health insurance, and just pay the penalty. And I suspect that is what will happen in CA and NY, especially among younger people, if those premium rate is accurate.
So the problem of a segment of people not having health insurance remains unsolved by the ACA.
__________________
bondi688 is offline  
Old 03-29-2013, 10:52 PM   #26
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
Some healthcare costs may rise when "Obamacare" implemented: official
"U.S. Health and Human Services Secretary Kathleen Sebelius acknowledged on Tuesday that costs could rise in the individual health insurance market, particularly for men and younger people, because of the landmark 2010 healthcare restructuring due to take effect next year.
But the insurance industry, which is set to gain millions of new customers under the law, is warning of soaring premium costs next year because of new regulations that include the need to offer a broader scale of health benefits than some insurers do now.
That has raised concerns about people with individual policies not subject to subsidies and the potential for cost spillovers into the market for employer-sponsored plans, which according to U.S. Census data, cover about half of U.S. workers.
The nonpartisan Kaiser Family Foundation estimates that 3.9 million family dependents could be left unable either to afford employer-sponsored family coverage or to obtain federally subsidized insurance through an exchange."


What a muddled mess at this point.
__________________
bondi688 is offline  
Old 03-30-2013, 03:48 AM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,439
Quote:
Originally Posted by bondi688 View Post
A scenario where a couple making $62500 paying $20672, a third of their income for health insurance premium, has to be hypothetical, because they will be getting health insurance coverage at work and the employers pick up a substantial part of the group rate.

But that said, there may come a point when the employers say that they cannot afford to continue to pay for those health insurance coverage for employees, and then everyone will be facing the true cost of paying for health care.
But they could be self employed in a small business or work for an employer who does not provide health insurance benefits or be retirees with SS and a pension but no retiree health benefits. Lots of possible applications.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now  
Old 03-30-2013, 04:46 AM   #28
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
Quote:
Originally Posted by pb4uski View Post
But they could be self employed in a small business or work for an employer who does not provide health insurance benefits or be retirees with SS and a pension but no retiree health benefits. Lots of possible applications.
You are right. I was beyond shock when I was looking at your numbers.
__________________
bondi688 is offline  
Old 03-30-2013, 06:13 AM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,439
Some very odd things about that calculator. Let's say a ER couple age 55 with $60K of income. Our premium is $1,723 a month.

But if I add our 25 yo son then the premium is only $861 a month.

If I adopt an 18 year old then the premium is $574 a month (less than what i am paying now for better coverage).

Can't be right.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now  
Old 03-30-2013, 06:17 AM   #30
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
pb4uski
Is it because when the family size increases,that family, if the total income drops below a certain level, qualifies for federal subsidy and then the premium drops dramatically?
__________________
bondi688 is offline  
Old 03-30-2013, 07:10 AM   #31
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,146
The subsidy cliff could have a substantial effect on how one saves for FIRE. It may encourage people to save on an after-tax basis, instead of in a 401K or IRA, since withdrawing from these accounts would count as income against the subsidy cliff, whereas using after tax savings would not. This may change some of my current plans.
__________________
Living an analog life in the Digital Age.
Gumby is online now  
Old 03-30-2013, 07:10 AM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,439
Quote:
Originally Posted by bondi688 View Post
pb4uski
Is it because when the family size increases,that family, if the total income drops below a certain level, qualifies for federal subsidy and then the premium drops dramatically?
No, I'm just looking at the premium, not the premium net of the subsidy.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now  
Old 03-30-2013, 07:14 AM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,439
Quote:
Originally Posted by Gumby View Post
The subsidy cliff could have a substantial effect on how one saves for FIRE. It may encourage people to save on an after-tax basis, instead of in a 401K or IRA, since withdrawing from these accounts would count as income against the subsidy cliff, whereas using after tax savings would not. This may change some of my current plans.
Agreed. In many cases, it will become important to have taxable funds available until one is Medicare eligible.

One thing I thought of though, if one's income is just over 400% FPL, it would be wise to make bigger 401k contributions to lower your income to below 400% FPL. As I understand it, IRA or HSA contributions would not work in the same way but I think 401k would work because it reduces your reported income on your W-2.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now  
Old 03-30-2013, 07:17 AM   #34
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,464
The subsidy cliff is so large I can't believe it will continue, at least in its current form, and would be very cautious if it were a prerequisite to early retirement.
__________________
MichaelB is online now  
Old 03-30-2013, 07:18 AM   #35
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,146
Quote:
Originally Posted by pb4uski View Post
Agreed. In many cases, it will become important to have taxable funds available until one is Medicare eligible.

One thing I though of though, if one's income is just over 400% FPL, it would be wise to make bigger 401k contributions to lower your income to below 400% FPL. As I understand it, IRA or HSA contributions would not work in the same way but I think 401k would work because it reduces your reported income on your W-2.
Good point. I guess I was assuming that I will have health insurance through my employer so long as I'm working.
__________________
Living an analog life in the Digital Age.
Gumby is online now  
Old 03-30-2013, 07:23 AM   #36
Thinks s/he gets paid by the post
 
Join Date: Mar 2009
Posts: 1,433
Quote:
Originally Posted by pb4uski View Post
Agreed. In many cases, it will become important to have taxable funds available until one is Medicare eligible.

One thing I though of though, if one's income is just over 400% FPL, it would be wise to make bigger 401k contributions to lower your income to below 400% FPL. As I understand it, IRA or HSA contributions would not work in the same way but I think 401k would work because it reduces your reported income on your W-2.
It looks like my careful planning over the years is going to be thrown out the window. With large balances 401k, IRA and Retiree medical accts I had planned to be in the lower 70k income range in retirement. It looks like this is the one area you don't want to find yourself. Talk about a huge marginal tax rate!
Meanwhile I guess I'll stay with my job even longer, and stash cash under the mattress. It's much easier than trying to figure out this stuff.
__________________
Retired in 2016. Living off dividends / interest and a mini pension. Freedom.
foxfirev5 is online now  
Old 03-30-2013, 07:35 AM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,439
Quote:
Originally Posted by MichaelB View Post
The subsidy cliff is so large I can't believe it will continue, at least in its current form, and would be very cautious if it were a prerequisite to early retirement.
I totally agree. But the dilemma is that if you smooth out the cliff to try to make health insurance more affordable for middle income people then the cost of the subsidies becomes a huge problem. OTOH, If you smooth out the cliff to make health insurance more affordable for middle income people and then shift the subsidies downward to make the cost of the subsidies viable in aggregate then I suspect the subsidies for low income people would become so paltry that it wouldn't be effective in helping them buy insurance. What a mess.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now  
Old 03-30-2013, 07:40 AM   #38
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,439
Quote:
Originally Posted by foxfirev5 View Post
It looks like my careful planning over the years is going to be thrown out the window. With large balances 401k, IRA and Retiree medical accts I had planned to be in the lower 70k income range in retirement. It looks like this is the one area you don't want to find yourself. Talk about a huge marginal tax rate!
Meanwhile I guess I'll stay with my job even longer, and stash cash under the mattress. It's much easier than trying to figure out this stuff.
Just remember that this discussion only applies from ER until Medicare (65). But if one is planing to ER at, say, 55 then taxable funds will be valuable. You might consider ceasing tax-deferred contributions in excess of the match in favor of taxable account investments - but that has its own problems in that your current taxes would be higher. But the benefit of the subsidy may well exceed the taxes you pay today.

Since we don't know whether or how the subsidies will change, it makes it real hard to plan.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now  
Old 03-30-2013, 07:55 AM   #39
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,146
As I think more about this, the prospect of stepping over the cliff could also affect one's decision to take social security at 62.
__________________
Living an analog life in the Digital Age.
Gumby is online now  
Old 03-30-2013, 08:30 AM   #40
Full time employment: Posting here.
Accidental Retiree's Avatar
 
Join Date: Feb 2012
Posts: 975
DH and I currently pay around $1400 month for our insurance here in CA. We are insured separately. Because of his pre-existing condition (well-controlled Type II diabetes), he got a guaranteed underwriting policy when his COBRA ran out back in 2011, so he has always paid around $1000/month. His policy had a recent increase, so I think it has actually gone over that by now.

I got a HD policy, with a 10% surcharge, because I have a little arthritis in my base of my thumbs, no other medical conditions. That rate has gone up 3 times, I think, since early 2011.

When I checked the high-risk pool last year, premiums for a couple were over $1600/month, IIRC. Similar premiums for other states where we had considered relocating were quite a bit less, so yes, California is expensive.

With ACA, I see the same numbers on those calculators that everyone else sees: north of $1700/month for our premiums, before tax credits.
__________________

__________________
Chief Retirement Strategist
The AR Group
Accidental Retiree is offline  
Closed Thread

« 90YO dash | Flu »

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 03:49 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.