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Health Care subsidies
Old 01-25-2011, 08:10 AM   #1
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Health Care subsidies

I'm wondering how the health care subsidies are going to work. If they are still there in 2014. I have looked at some of the calculators, but I'm not sure if the income is your gross income or taxable income.

If my numbers are correct I can show $58,000 in income, family of two, and only have to pay 9.5% for insurance. Or $5,510, which is much lower than the $13,000 I'm paying now.

I can definatly make this work if it is taxable income.
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Old 01-26-2011, 02:43 PM   #2
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Health Reform Subsidy Calculator - Kaiser Health Reform
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Old 01-26-2011, 04:32 PM   #3
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Originally Posted by dgoldenz View Post
A little playing around with this calculator produces some interesting results. This is what I came up with for my cost at various income levels:

Income $30,000, my cost $2,509
Income $40,000, my cost $3,800
Income $46,000, my cost $4,375
-- cross over 400% of the poverty level --
Income $47,000, my cost $10,172
Income $250,000, my cost $10,172

If this is the way it is really going to work, income tax brackets may pale in significance for some of us.

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Old 01-26-2011, 04:36 PM   #4
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A little playing around with this calculator produces some interesting results. This is what I came up with for my cost at various income levels:

Income $30,000, my cost $2,509
Income $40,000, my cost $3,800
Income $46,000, my cost $4,375
-- cross over 400% of the poverty level --
Income $47,000, my cost $10,172
Income $250,000, my cost $10,172

If this is the way it is really going to work, income tax brackets may pale in significance for some of us.

Coach
Try it with a 64 year old family with $93,600 income - $24k tax credit and $8k cost of coverage. Then try it again at $93,700 - $0 tax credit and $33k cost of coverage. I guess when you earn that extra $100, you are now "rich" and can afford to pay $2,900/month for health insurance instead of $700/month. What moron would want a raise when they lost a $24k tax credit by earning another $100? Scary for future economic growth.
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Old 01-27-2011, 07:34 AM   #5
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Try it with a 64 year old family with $93,600 income - $24k tax credit and $8k cost of coverage. Then try it again at $93,700 - $0 tax credit and $33k cost of coverage. I guess when you earn that extra $100, you are now "rich" and can afford to pay $2,900/month for health insurance instead of $700/month. What moron would want a raise when they lost a $24k tax credit by earning another $100? Scary for future economic growth.
I noticed that also. Overtime could put you over also. How would you get someone to work if it put them over the 400 percent number?
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Old 01-27-2011, 07:36 AM   #6
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I noticed that also. Overtime could put you over also. How would you get someone to work if it put them over the 400 percent number?
You couldn't. I haven't calculated the number but the marginal tax rate going over 400% of FPL is insane.
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Old 01-27-2011, 07:55 AM   #7
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It's going to make a big difference if that is total or taxable number. If it's taxable, you're going to see me calculating just how much i might need to donate at the end of December to stay at about 399%. Not such a big deal at 35 in 2014 (less than $400 subsidy) but gets ugly in your mid to late 50s!
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Old 01-27-2011, 08:01 AM   #8
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It is difficult for me to believe those "off a cliff" provisions will not be modified to a more graduated scale.
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Old 01-27-2011, 09:13 AM   #9
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It is difficult for me to believe those "off a cliff" provisions will not be modified to a more graduated scale.
My House Rep in Congress mentioned they are going after the 1099 requirement debacle, seeking to get that section removed (they already voted for repeal of the entire bill, but that isn't going to go anywhere). Even Obama cited the 1099 issue in his SOTU address (which got applause - from the people who supported it a year ago? - I need a 'head-scratching' emoticon here - ).

I haven't seen much written about this steep cliff - it really is incredibly bad. I'm not sure it's getting any attention in Congress. It's another example that indicates the people who passed/signed this bill really had no idea what it really meant.

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Old 01-27-2011, 09:40 AM   #10
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Try it with a 64 year old family with $93,600 income - $24k tax credit and $8k cost of coverage. Then try it again at $93,700 - $0 tax credit and $33k cost of coverage. I guess when you earn that extra $100, you are now "rich" and can afford to pay $2,900/month for health insurance instead of $700/month. What moron would want a raise when they lost a $24k tax credit by earning another $100? Scary for future economic growth.
Here's an even more striking example, down in the more 'average working man' pay scale :

59 YO single -

$46,021 Income = $4,372 premium ($7834 Government tax credit)

Now, our 59 YO worker miscalculates his OT, or gets an unexpected bonus of a SINGLE DOLLAR, and....

$46,022 Income = $12,206 premium ($ZERO Government tax credit)

That SINGLE DOLLAR cost him $7,834 in take home pay! He is going to be mad, mad, mad. Imagine, getting a $7,834 haircut because you made an extra dollar! Employees are going to be asking for, no demanding, caps on their salary! This is just Bat-Sh!t crazy!

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Old 01-27-2011, 09:44 AM   #11
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I understand the motivation behind the subsidies, but as implemented, it seems to be an effective "tax bubble" (in the form of reduced subsidy) on the order of 15-18% for middle-income households who buy their own insurance. In a solidly middle class income range, for every $1000 more you earn, you lose at least $150 in subsidies. It isn't a tax per se, but it walks like one and quacks like one -- and it's rather massive.
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Old 01-27-2011, 09:54 AM   #12
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It's another example that indicates the people who passed/signed this bill really had no idea what it really meant.
This is the type of egregious thing that happens with a two-thousand page bill that is voted on by people who haven't read it carefully, if at all.
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Old 01-27-2011, 10:27 AM   #13
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There will definitely be creative accounting at the corporate level, too, to take advantage of the subsidy money. Company X will keep all its management folks earning higher salaries and continue to provide health care coverage. They will spin-off Company Y to be the employer of all their lower-income employees. Company Y won't offer health care, will pay the minor penalty, and all the workers will get the government subsidies and will be in the exchanges.

I'm assuming we'll next hear from DC about how these more cumbersome management structures and the previously mentioned government intervention in the labor market through abrupt marginal taxation subsidy rates will boost US competitiveness and job creation. "The new law created thousands of high-paying jobs for accountants and administrative personnel . . . "

My DD is 21 and, under the new law, will be kept on our employer-provided insurance (Tricare) until she's 26. For that privilege, it looks like she (I) will pay about $200 per month. Given her very low anticipated earnings, she'd be better off without this coverage and going with the government subsidy (the out of pocket premiums would be just $100 per month). Of course, lots depends on the actual policy details, but I think there will be many people and companies finding ways to get those subsidy dollars. Some studies indicate the CBO estimates of the cost of these subsidies were much too low, as they didn't account for people and companies responding to these incentives.

Unanticipated effects and costs--who'd a thunk it?
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Old 01-27-2011, 10:56 AM   #14
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It's going to make a big difference if that is total or taxable number. If it's taxable, you're going to see me calculating just how much i might need to donate at the end of December to stay at about 399%. Not such a big deal at 35 in 2014 (less than $400 subsidy) but gets ugly in your mid to late 50s!
This is the info I'm looking for. Is it taxable income or total? That can be a big difference.
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Old 01-27-2011, 12:45 PM   #15
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I wouldn't worry about it. The tax credit for health insurance looks like a target for defunding.

Now, if you want something to worry about, think about how far a $491 monthly voucher ($5,900/year) will go in buying individual medical coverage when you hit age 65 (unless you means-test at the poverty line for a subsidy), under the Roadmap for America’s Future Act of 20102011.
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Old 01-27-2011, 01:56 PM   #16
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I prefer what I have today. $735 in annual premiums (with a 5K deductible) and pray I dont get sick or need any treatment, compared to what you are all posting it would cost yearly to purchase on a $75,000 income. Not much good for me to be Er'd if I had no money at all thanks to health premiums.
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Old 01-27-2011, 05:07 PM   #17
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I prefer what I have today. $735 in annual premiums (with a 5K deductible) and pray I dont get sick or need any treatment, compared to what you are all posting it would cost yearly to purchase on a $75,000 income. Not much good for me to be Er'd if I had no money at all thanks to health premiums.
I wonder if those planes will still be around. It will be for the government to decied how much insurance we have to buy.
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Old 01-27-2011, 06:57 PM   #18
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I wonder if those planes will still be around. It will be for the government to decied how much insurance we have to buy.
I'm fine with seeing some of the more absurd plans drop dead. There were a bunch of, to be blunt, ripoff plans sold to college students and parents. "Pays up to $2,500 for hospitalization!" Yeah. That'll work. "Covers injuries due to student sports activities only." "Does not cover cancer or cancer-related illnesses." (All from campus insurance policies I looked at for the kids when they went off to school. )

Having a minimum level of coverage required to pass off an insurance policy as health insurance is a good thing. It sets a standard, and makes price comparison easier. We can argue about what that level should be. (I think Congress was generous with other people's money again...)
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Old 01-27-2011, 08:28 PM   #19
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I'm fine with seeing some of the more absurd plans drop dead. There were a bunch of, to be blunt, ripoff plans sold to college students and parents. "Pays up to $2,500 for hospitalization!" Yeah. That'll work. "Covers injuries due to student sports activities only." "Does not cover cancer or cancer-related illnesses." (All from campus insurance policies I looked at for the kids when they went off to school. )
This is the *opposite* of what insurance should be. Insurance should be protection against catastrophic loss, IMO, not merely paying for a few small things and then leaving you on your own to be bankrupted by the big things. Good insurance should leave you to self-insure smaller, absorbable financial hits while protecting you from the ruinous ones. These plans do the exact opposite.

Dental "insurance" is very much this way, too, which is why it rarely makes sense to purchase unless it's heavily employer-subsidized.
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Old 01-28-2011, 12:34 AM   #20
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It is difficult for me to believe those "off a cliff" provisions will not be modified to a more graduated scale.
Well, the government is the planner here......
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