Patient Protection and Affordable Care Act

[FinanceGeek]

Just wanted to chime in on my elation that this was upheld.

As I have posted previously I work full time, but have been thinking of taking a self funded sabbatical to go back to grad school on a full time basis. My family has expensive pre-existing conditions and so COBRA or our state's high risk plan are the only options for HI.

The college I am looking at attending provides all students with a crappy minimed which I can't make myself ineligible for (yes, I've already asked the administration and their advice was to seek out an alternate institution of higher learning that lacks this gracious "benefit").

So, if I were to leave my job and enroll in this college and remain a student after my COBRA eligibility ends, it would be devastating to my family as I would suddenly be deemed "eligible for group insurance". The minimed would leave us paying huge out of pocket expenses and my family would be ineligible for our states high risk plan. In other words, I would have to drop out of school and go back to work.

Now with the ACA upheld, anytime after Saturday lies within the 18 month period of COBRA eligibility for insurance after which pre-existing condition limitations aren't valid.

Its time to dust off the school books. I am literally finishing off the Statement of Purpose in another window.

 

[NW-Bound]

I spent a bit of time perusing the site linked by tomz.

Being a casual consumer of health care so far (knock on wood), I am certainly not knowledgeable, but I thought that the largest portion of the current healthcare costs was incurred in hospitalization. If it weren't for that, pfft, I could pay for my annual exams and my once-every-10-year colonoscopy with a few months worth of my current insurance premium, which is a $10K/year deductible policy.

Yet, I do not see what would make hospital stays less costly, more efficient, etc... There is something about electronic record keeping, but is it enough? What am I missing?

PS. I know that the law helps people with pre-existing conditions, but for the nation as a whole, how does this reduce hospitalization costs? By the way, there is something about the costs of drug.

 

[Midpack]

I found several sites that project higher premiums, this (CBO) is probably the least partisan?

Effects on Health Insurance Premiums. Under PPACA and the Reconciliation Act, premiums for health insurance in the individual market will be somewhat higher than they would otherwise be, CBO and JCT estimate, mostly because the average insur- ance policy in that market will cover a larger share of enrollees’ costs for health care and provide a slightly wider range of benefits.8 The effects of those differences will be offset in part by other factors that will tend to reduce premiums in the individual market; for example, purchasers in that market will tend to be healthier than they would have been under prior law, leading to lower average costs for their health care. Although premiums in the individual market will be higher on average, many people will end up paying less for health insurance—because the majority of enrollees pur- chasing coverage in that market will receive subsidies via the insurance exchanges.

Premiums for employment-based coverage obtained through large employers will be slightly lower than they would otherwise be; premiums for employment-based cover- age obtained through small employers may be slightly higher or slightly lower.

http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/121xx/doc12119/03-30-healthcarelegislation.pdf

 

[donheff]

I found several sites that project higher premiums, this (CBO) is probably the least partisan?
http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/121xx/doc12119/03-30-healthcarelegislation.pdf

If the CBO is correct will we see slight rises for greater coverage. Not Too bad an outcome.

 

[ERhoosier]

If the CBO is correct will we see slight rises for greater coverage. Not Too bad an outcome.

But CBO's track record in predictions of health care costs has been dubious at best.
Congressional Budget Office consistently wrong on health-care estimates | The Daily Caller

Only time will tell how much costs will actually rise for any given individual or family.

 

[ShortInSeattle]

I don't see how this ruling will make for better health care in the US. Young people, who are for the most part healthy, would no doubt rather pay a 1% penalty (tax) if they make $30,000 a year, let's say, than pay $250 a month for healthcare. So, the pool of healthy people will shrink, and the pool of unhealthy people will rise dramatically. If you have fewer people paying in overall, the cost burden will fall on fewer people, and costs will rise. That's simple logic.

It sounds logical, but I think the "young people skipping insurance" thing is a bit overplayed. The 20-30-something people I know all enroll in insurance. Most choose jobs based on it. The only ppl I know who skip insurance literally can't afford it. Some of them pay to cover their kids but not themselves because they can't do both.

It could be true, but it just doesn't jive with my experience. Sure, the single guys in their 20s hate going to the doctor, but most of them want the coverage, even at a cost.

SIS

 

[Purron]

One last thought on this for the night. I'm pooped out after having spent the last 3 days camped out at the hospital with my elderly mom who recently went through major surgery for cancer. If that doesn't heighten your awareness of health care issues, I don't know what does.

Thanks MichaelB for introducing this topic. Yes, I know the chances of this thread vering off topic and crashing are high. Yet, this is one of the most important topics discussed here in a long time.

DH and I are paying nearly $8,000 a year for basic health care. Over $12,000 if you include what we pay for LTC insurance and dental. So it's a big deal to us. Really BIG. I've already picked up some stuff here that may be important to us as this thing evolves. Hope this discussion continues in this and other threads.

I plan on grabbing the nearest nesting cat and hitting the sac about now.

Thanks all and nighty night.

 

[Mulligan]

Lost in the praise of the SCOTUS decision is the prospect of it actually DEcreasing practical access to health care in coming years. No secret that finding doc who accepts new Medicare patient is tough already in many areas. One independent (non-Govt) national survey found only 75% of family practice docs accept new MC patients, with the situation even worse in some other specialties.
Medscape: Medscape Access

In all likely hood this access situation will deteriorate further after 2014 when Feds make huge (75%) cuts to "Disproportionate Share" payments ($$$ to hospitals which care for disproportionate share of un/underinsured).
Implementation Timeline - Kaiser Health Reform
Many of these hospitals losing funding are urban teaching hospitals which train our docs, nurses, pharmacists, etc.
Despite good intentions, there is no assurance that Affordable Care Act (aka Obamacare) will significantly decrease the number of uninsured patients in the US (e.g. refusers who simply pay uninsured tax, illegal aliens, etc.). It should be no surprise if some teaching hospitals reduce services or even close under the above funding cuts. This would put further pressure on an already strained health education system.

Other projections are that the current physician shortage will worsen as Obamacare's expansion of Medicaid/Medicare decreases ave per-patient revenues (already often below cost of delivering care under those programs).
Doc holiday - NYPOST.com
And ACA/Obamacare does nothing about the malpractice crisis continuing to pressure physicians & hospitals.

It should be appreciated that in a time of ever-increasing stressors on health care professionals, SCOTUS just made it easier for them to early retire too. Health insurance is barely worth the paper it's printed on without access to care.

Ironic, a talking head on tv quoted 50% of doctors currently are not accepting new medicare patients, while I was reading your post. Now I am a few years away from medicare, but what the hell do you do if you go on medicare, because your present insurance wont pay because it expects to be secondary insurance, but then the doctor wont accept you as a patient because you have medicare. Sounds like a potentially scary situation.

 

[donheff]

It sounds logical, but I think the "young people skipping insurance" thing is a bit overplayed. The 20-30-something people I know all enroll in insurance. Most choose jobs based on it. The only ppl I know who skip insurance literally can't afford it. Some of them pay to cover their kids but not themselves because they can't do both.

It could be true, but it just doesn't jive with my experience. Sure, the single guys in their 20s hate going to the doctor, but most of them want the coverage, even at a cost.

SIS

+1 Massachusetts didn't have much of a penalty and they got 98% compliance. No one who can afford it wants to go without insurance. The fact that you can get insurance if you get sick is little help if you break a leg and have to go to the hospital now. You owe the ER big time. Will you be able to dodge the bill if you are gainfully employed? No, only poor people can blithely ignore their bills and many of them will now be covered by Medicare except in the few states stupid enough to become refuseniks. Bottom line, compliance will be quite high.

 

[clifp]

Guess we need to move to MO. Seems odd that everyone else seems to be paying $500-700/mo for high deductible health insurance. What makes MO so different?

My Kaiser policy in Hawaii is $286/month, 52 year old male. The copays are $25 and only 50% of lab tests are covered, but most everything else is fully paid for as long as I used Kaiser doctors. There are high deductible from the "Blue Cross" provider HMSA available for <$100/month. I applied a few years ago for the policy but was rejected for unknown reasons.

Reading this thread makes me think I've got a relative bargain. It is remarkable the wide range of prices people pay who are mostly between 40 and 60. Might be interesting thread topic. I understand that there are pre existing conditions in many cases. But to me pre existing conditions is my obese friend who has two types of cancer in the last 15 years, not high cholesterol.

 

[Mulligan]

My Kaiser policy in Hawaii is $286/month, 52 year old male. The copays are $25 and only 50% of lab tests are covered, but most everything else is fully paid for as long as I used Kaiser doctors. There are high deductible from the "Blue Cross" provider HMSA available for <$100/month. I applied a few years ago for the policy but was rejected for unknown reasons.

Reading this thread makes me think I've got a relative bargain. It is remarkable the wide range of prices people pay who are mostly between 40 and 60. Might be interesting thread topic. I understand that there are pre existing conditions in many cases. But to me pre existing conditions is my obese friend who has two types of cancer in the last 15 years, not high cholesterol.

That is interesting. I would have guessed it would be higher in Hawaii. It sure seems like some people are getting thrown under the bus even when they are healthy. I played around with the ehealthinsurance site that I got mine from in MO. A 60 year old male can get the same policy I have (5500 deductible, 0 copay after) for $139 a month. You can even get the old school, $1000 deductible, with no copay, and $30 office visit for $397. That seems extremely reasonable for someone 60. Of course you have to be healthy though, or what they deem is healthy. But, I did get the best rate quoted and a few of my friends did too, so its not impossible.

 

[clifp]

I just had a thought: Since SS income is generally included in the income calculation for determining the subsidy for health insurance, and since the premiums from age 62-64 will be the highest, wouldn't this potentially make a strong argument for waiting to take SS until you are Medicare-eligible? A significant portion of the SS you'd get from age 62-64 would be lost to the reduction in subsidy anyway so you might as well wait until 65* when you will be on Medicare and don't have to worry about private insurance matters any more -- or about the loss of the subsidy.

* -- Or whatever Medicare eligibility age younger folks are going to be moved to. And obviously this likely won't apply to those of you who are blessed enough to have (former) employer-subsidized health insurance in retirement.

On paper I qualified for a subsidy in 2008, and 2009, but probably not in 2010 or 2011. I find it hard to imagine that we as a nation can afford to give me a subsidy for health insurance.

One thing that I can easily see is a lot income management (such as SS withdrawals) but also lumping stock sells all into one year. I can even see me sending out a notice to my tenants. "I know the holiday are a tough time financially, so please don't send me your Dec payment until Jan. Merry Xmas"

 

[NW-Bound]

<< Original Post deleted by author -- It may simply reopen previous debates that were interminable. I will just leave the following link >>

In the remote chance there are late-comer ignoramuses like myself, I would like to say that I found the article in Wikipedia (where else?) on Obamacare most useful.

Patient Protection and Affordable Care Act - Wikipedia, the free encyclopedia

 

[tulak]

On paper I qualified for a subsidy in 2008, and 2009, but probably not in 2010 or 2011. I find it hard to imagine that we as a nation can afford to give me a subsidy for health insurance.

One thing that I can easily see is a lot income management (such as SS withdrawals) but also lumping stock sells all into one year. I can even see me sending out a notice to my tenants. "I know the holiday are a tough time financially, so please don't send me your Dec payment until Jan. Merry Xmas"

I made a flippant comment earlier in this thread regarding paying off the mortgage, but I believe it's another factor you should take into consideration to see how much of a subsidy you can receive.

Let's say you need $60,000/year gross. If you have a mortgage of $1000/month, then you'd need an additional $14,120 in pre-tax income, assuming 15% tax rate.

Using Kaiser's subsidy calculator, as a 45 year old with family of 4, you get $12,157 tax credit at $60,000/year compared to $10,053 at $74,120. So you get an additional $2,104/year by not having a mortgage. Is it worth it? Maybe. You'd have to run the numbers. But it is another factor.

It really is going to be interesting to see how many ways you can manage your income to maximize the subsidy. I can see the infomercials now...

In playing around with the subsidy calculator, I did notice something interesting. Actually, I'm finding it somewhat hard to believe, but don't feel like digging in deeper right now.

If you enter $46,000 with as a 50 year single adult in a high cost factor region, the total cost is $8,374 and you receive a tax credit of $4,004, so your total cost is $4,370. But if you enter $47,000, you pay the full $8,374 with no subsidy.

So if you have $1000 less income, you gain a $4,370 tax credit. Nice.

Clif, at that point you could let your tenants not pay you for December and you'd still come out ahead.

This needs a lot more research. I'm having a hard time believing the numbers in Kaiser's subsidy calculator after that last example...

 

[tulak]

So when does a $1 cost you a $4,002 tax credit?

When you're a 50 year single adult making $46,022 living in a high cost region.

If you made $46,021, you'd get the $4,002 tax credit. That's one expensive dollar...

 

[obgyn65]

Interesting. Optimizing the subsidy could be worth another thread topic.

Let's say you need $60,000/year gross. If you have a mortgage of $1000/month, then you'd need an additional $14,120 in pre-tax income, assuming 15% tax rate.

Using Kaiser's subsidy calculator, as a 45 year old with family of 4, you get $12,157 tax credit at $60,000/year compared to $10,053 at $74,120. So you get an additional $2,104/year by not having a mortgage. Is it worth it? Maybe. You'd have to run the numbers. But it is another factor.

It really is going to be interesting to see how many ways you can manage your income to maximize the subsidy. I can see the infomercials now...

 

[marko]

If I'm using the Kaiser calculator correctly, incomes under $100K are generally yield a net out of pocket cost for HC at about 6-9% of income (wish they'd have a 'family of 2' button).

Is this so? Is this gross income or AGI??

Agreed with another poster: this should bring about all sorts of 'income management' schemes!

 

[clifp]

Y'know, DG, this thread managed to get over 140 posts of mostly thoughtful commentary and constructive criticism.

I'm not sure which category your verbiage falls into, but I suspect the moderators will be happy to help you sort it out.

I'm learning a lot from this thread's links and other discussions, and I'd appreciate it if you would avoid being the guy responsible for getting the thread locked. Thanks.

Yes I am pleasantly surprised at the level of commentary. Although thinking about unlike 95% of the talking heads we see on TV or even out protesting, this group is actually significantly impacted by this decision. Since many of us are part of the relatively small ~10% of the population who buy our own insurance.

If the HI subsidy system works as it appears it is absurdly stupid. To be honest I wouldn't get too hung up on the Kaiser calculator, IIRC it was prepared before the bill was done and may not even accurately reflect the actual bill. I am fairly certain that ultimately there will some type of phase out will be introduced so that making an extra dollar won't cause you to lose $4K worth of credits.


Never the less the subsidies by design extend well into middle income and will result in some massive increases to marginal tax rates for early retirees/self-employed. I think if you add the impact of the likely change to cap gain and/or dividend rates and tax planning circa 2014 will be way different than today.

I'll also throw out a free product idea for any entrepreneur. The government subsidy maximizer (TM). This program will tell you how to maximize the amount of subsidies/tax credit you can get. It will combine health insurance, solar tax credits, electric car credits, student loans, student aid etc and be an add on to Turbo Tax, or Tax Cut and Quicken or Mint. Each year it will provide a target income and suggestions on which securities/assets to sell, taxes to prepay etc. to hit the goal.

 

[MichaelB]

I would not make any hard plans based on the subsidy right now because rules and implementation guidelines have not been written. When they are complete our understanding of the subsid may change.

 

[Bestwifeever]

I think we are all going to have to get bigger mailboxes to handle the marketing materials that will be coming down the pike to help us choose a plan.

 

[ItDontMeanAThing]

Not specific to this legislation but in general: The Orwellian names affixed to legislation these days (by politicians on both sides of the aisle) discourages the use of these official titles in everyday discussions.

This thread has been eye-opening. I don't get my insurance or healthcare in the US so I've paid little attention to the names. I naively thought PPACA = name of the legislative act and Obamacare = informal name of the program created by the act.

 

[pb4uski]

I would not make any hard plans based on the subsidy right now because rules and implementation guidelines have not been written. When they are complete our understanding of the subsid may change.

You may be right but everything that I have seen seems to suggest that the subsidy falls of a cliff at 400% PL so at some point an additional $1 of income has an exorbitant economic cost.

It certainly will make tax planning interesting to optimize the subsidy, taxes, etc.

 

[pb4uski]

I made a flippant comment earlier in this thread regarding paying off the mortgage, but I believe it's another factor you should take into consideration to see how much of a subsidy you can receive.

Let's say you need $60,000/year gross. If you have a mortgage of $1000/month, then you'd need an additional $14,120 in pre-tax income, assuming 15% tax rate.

Using Kaiser's subsidy calculator, as a 45 year old with family of 4, you get $12,157 tax credit at $60,000/year compared to $10,053 at $74,120. So you get an additional $2,104/year by not having a mortgage. Is it worth it? Maybe. You'd have to run the numbers. But it is another factor.

It really is going to be interesting to see how many ways you can manage your income to maximize the subsidy. I can see the infomercials now...

In playing around with the subsidy calculator, I did notice something interesting. Actually, I'm finding it somewhat hard to believe, but don't feel like digging in deeper right now.

If you enter $46,000 with as a 50 year single adult in a high cost factor region, the total cost is $8,374 and you receive a tax credit of $4,004, so your total cost is $4,370. But if you enter $47,000, you pay the full $8,374 with no subsidy.

So if you have $1000 less income, you gain a $4,370 tax credit. Nice.

Clif, at that point you could let your tenants not pay you for December and you'd still come out ahead.

This needs a lot more research. I'm having a hard time believing the numbers in Kaiser's subsidy calculator after that last example...

Interesting point, but it would be different if your withdrawals are from taxable accounts vs tax deferred accounts since the former would not be taxable and the latter would be.

 

[rescueme]

I think we are all going to have to get bigger mailboxes to handle the marketing materials that will be coming down the pike to help us choose a plan.

- I know what you mean. My (disabled) son's Medicare/Advantage plan material is close to 6" high. 4" of that is just the "book" that shows what doctors for each speciality accepts in his insurance coverage area.

DW/me go on Medicare early next year. I guess I'll have to stack indivudial mailboxes for each of us on the curb.

 

[MichaelB]

It certainly will make tax planning interesting to optimize the subsidy, taxes, etc.

That's for sure