House "Affordable Health Care for America Act"

[JustNtime]

Perhaps put the question to popular vote, should everyone be required to have health insurance or be fined for not having it?! Maybe the majority would agree - I think we should at least ask.

This bill does nothing to prevent folks w/o insurance from incurring bills for catastrophic cases and then either using bankruptcy (or death) to escape the full consequences. It just adds a fine to their already dire consequences. For the vast majority who take the risk w/o the consequences, it's just another hand in their pockets.

Even those with some coverage could be bankrupted (or dead) by your examples. SO no real change.

Let's call me skeptical that those not having a way to pay, those with minimal coverage, those with superior coverage, and those with deep pockets all receive the same quality of care now or in the future... So another consequence.

NOT having insurance is a gutsy call to say the least and my daughter has had to pay a hefty price for treatments she has received and paid out of pocket. Still she is unable to find what she considers affordable health care. An optimist might suggest this bill would give her that opportunity. A pessimist sees an added cost and continued risk with no guarantees... Call me optimistically-pessimistic, I think it could actually be worse than that!

 

[lets-retire]

I read an article not too long ago where the author interviewed common people and asked for their opinion about the cost of health care and health insurance. One woman stated health care was too expensive and she had to think hard about going to the doctor. Her health insurance was completely provided by her employer, she paid no premiums. She had a very good policy that required her to pay a co-pay somewhere between $20-30. She complained that if she became sick she might have to pay a couple hindered dollars for the doctor's visit and medications. I would love that policy, I pay a couple hindered dollars per month, even if no one in my family goes to the doctor, which is still less than some people pay.

My point is some people have opinions that don't have any basis in reality.

 

[Martha]

My point is some people have opinions that don't have any basis in reality.

True enough!

 

[M Paquette]

Oh, I LOVE the thought of a COSTCO Medical Association! And why not...?

I thought that might actually be a nice outcome. The only gotcha is the association plan language talks about eligible employees and employers, or professional organizations. Us early retirees don't count, unless we've kept our professional organization memberships up. I wonder if AARP could get itself declared a professional organization?

Here's a fresh link to the Republican House plan now that it has been released:
http://rules-republicans.house.gov/Media/PDF/RepublicanAlternative3962_9.pdf

And for comparison the Democratic House plan:
http://docs.house.gov/rules/health/111_ahcaa.pdf

 

[haha]

Nothing wrong with that. Should be the same with tax exempt interest.

It is already with respect to tax exempt interest and Medicare Part B premiums. Premiums are based on AGI as adjusted (adjusted adjusted AGI- that is, AGI with muni interest added back.)

Count me as one who does see something wrong with this. One way this new program could be cheaper for an individual is if the government put price controls on doctors, hospitals and drug companies, and no one is talking about that to my knowledge.

The only other way I can think of is to rob Peter to pay for Paul; and it always works out that I am Peter, even though I live in a 500 sq ft apartment in a building built in 1927.


Ha

 

[ERD50]

It won't be an income tax but rather Roth withdrawals and possibly muni bond interest will count towards income for determining health care premium subsidies and that sort of thing.

Nothing wrong with that. Should be the same with tax exempt interest.

Count me as one who does see something wrong with this.

I second that. I consider it wrong for the government to essentially change the rules of a ROTH after the fact. I'm no lawyer, but in the private sector I think that would be called "breach of contract". So while I guess we don't technically have a "contract" with the govt, it should be treated as such. Maybe even more so, since we have no real recourse.

And collecting HC premiums to provide HC is just as much a tax as collecting my money for any other purpose our govt chooses. So if a ROTH wd affects the amount of money I pay to the govt, it is being taxed. I didn't sign up for that when I contribute to a ROTH (though I am aware they can change the rules, but I do think it is wrong and would hope that they would grandfather past contributions).

If they want to change it going forward, well, I may not like it but at least it isn't screwing the person that tried to play by the rules.

-ERD50

 

[Martha]

It is already with respect to tax exempt interest and Medicare Part B premiums. Premiums are based on AGI as adjusted (adjusted adjusted AGI- that is, AGI with muni interest added back.)

Count me as one who does see something wrong with this. One way this new program could be cheaper for an individual is if the government put price controls on doctors, hospitals and drug companies, and no one is talking about that to my knowledge.

The only other way I can think of is to rob Peter to pay for Paul; and it always works out that I am Peter, even though I live in a 500 sq ft apartment in a building built in 1927.


Ha

My only point had to do with what could be counted as income. I too find fault with the proposals. I think that we need some price controls somewhere,but not everywhere. I keep thinking of the $100 MRI in Japan and Japan has no shortages of MRI machines.

On the other hand, I think that our primary care providers are underpaid so they end up having too many patients.

 

[Martha]

I second that. I consider it wrong for the government to essentially change the rules of a ROTH after the fact. I'm no lawyer, but in the private sector I think that would be called "breach of contract". So while I guess we don't technically have a "contract" with the govt, it should be treated as such. Maybe even more so, since we have no real recourse.

And collecting HC premiums to provide HC is just as much a tax as collecting my money for any other purpose our govt chooses. So if a ROTH wd affects the amount of money I pay to the govt, it is being taxed. I didn't sign up for that when I contribute to a ROTH (though I am aware they can change the rules, but I do think it is wrong and would hope that they would grandfather past contributions).

If they want to change it going forward, well, I may not like it but at least it isn't screwing the person that tried to play by the rules.

-ERD50

Oh baloney.

People who have income from tax exempt interest or Roth IRAs should have that income counted when determining eligibility for a subsidy. No one ever said Roths would be sheltered from everything, it is only sheltered from income tax. That is all the law provides and that alone is huge. Roth income might be counted in determining eligibility for many benefits. It certainly is counted to see if you are impoverished enough to get medicaid to pay for your nursing home. It is not like breach of contract and is not a change of the rules. To call every benefit or subsidy a tax on everyone else is stretching things way out of proportion.

 

[samclem]

One way this new program could be cheaper for an individual is if the government put price controls on doctors, hospitals and drug companies, and no one is talking about that to my knowledge.

The only other way I can think of is to rob Peter to pay for Paul; and it always works out that I am Peter, even though I live in a 500 sq ft apartment in a building built in 1927.

In addition to these two ways of reducing costs to an individual (price controls on services or cost shifting to other individuals) why not lower costs by taking steps to improve competition, thereby improving both the quality of services and the efficiency of their delivery? That's the force that works well in almost every other aspect of our economic lives. Health care is different in important respects, but I'm confident eliminating the structural impediments to competition is the best way to get a handle on costs. There are good ways to do this (and powerful vested interests opposed to it).

 

[samclem]

I'm with Ziggy. "Tax increase" and "subsidy reduction" feels a lot the same if you're one of the guys actually paying for the subsidy everyone is receiving.

Though I can see why this "subsidy" approach is attractive . . .

 

[DeborahB]

My point is some people have opinions that don't have any basis in reality.

I particularly am amused by the Medicare recipients who are against government-sponsored health care. Clueless...

 

[JustNtime]

I particularly am amused by the Medicare recipients who are against government-sponsored health care. Clueless...

I feel the same way about anyone in favor of expanding government-sponsored health care.

Alot harder to get the camel out of the tent once it has already stuck it's nose in!

 

[haha]

I particularly am amused by the Medicare recipients who are against government-sponsored health care. Clueless...

Absolutely. We are all just doddering old fools who can't even remember what day it is. No wonder me make such stupid mistakes. Just keep thinking that.

Ha

 

[ERD50]

Though I can see why this "subsidy" approach is attractive . . .

It's attractive because you can say the word "subsidy" without saying the word "tax". Your lips don't even move the same. Some people might want to believe you kept your promise not to raise certain taxes.

But whether I end up paying more, or pay the same but get less of a subsidy, it is all the same amount of money out my pocket and into the govt pocket. If it looks like a duck, walks like a duck and quacks like a duck....

Oh baloney.

Well, I guess we will have to agree to disagree. But this time, at least Merriam Webster and George Stephanopoulos are on my side.

Obama: Mandate is Not a Tax - George's Bottom Line

(and see the videos I posted a few back)

-ERD50

 

[teejayevans]

I second that. I consider it wrong for the government to essentially change the rules of a ROTH after the fact. I'm no lawyer, but in the private sector I think that would be called "breach of contract".

If they want to change it going forward, well, I may not like it but at least it isn't screwing the person that tried to play by the rules.

-ERD50

Talk to the GM bond holders about that...
TJ

 

[Martha]

Well, I guess we will have to agree to disagree. But this time, at least Merriam Webster and George Stephanopoulos are on my side.

Obama: Mandate is Not a Tax - George's Bottom Line

(and see the videos I posted a few back)

-ERD50

The only relevant definitions are what are under the tax code regarding income tax exemptions. The Roth is exempt from income tax and a subsidy for others is not an income tax to the holder of the Roth. There still will not be an income tax on your Roth. So, I still call baloney.

There is no indication of any legislative intent that a Roth not be considered as income for the purpose of public assistance and in fact it is considered.

BTW, the Roth is not exempt from all tax. If you die the Roth is considered part of your estate and can be subject to estate taxes.

So double baloney.

 

[youbet]

. But this time, at least Merriam Webster and George Stephanopoulos are on my side.

Obama: Mandate is Not a Tax - George's Bottom Line

The Stephanopoulos interview is well done and interesting to watch. He pressed Obama but yet respected his authority to have the last word, or should I say "wordsmithing?"

As far as the meaning of the word "tax," the discussion here is probably making far too much of the definition. You're from northern Illinois and should be well aware of how politics works in Chicago/Cook County. We've all listened to Daley, Blagojevich, Stroger and the others talk about not wanting to increase "taxes" and therefore are going to do "X," "Y," and "Z" to increase gov't revenue. Of course these alternatives amount to simply some other means of transfering money from private coffers to gov't coffers.

I think as RE's, or RE Wannebee's, we need to consider the financial impact, in regards to our retirements, of any movement of money, direct or indirect, from our resources to someone else's as that movement will affect our FIRE viability. Whether it's a "tax" or some other methodology, it needs to be understood and made a part of our planning.

 

[haha]

The only relevant definitions are what are under the tax code regarding income tax exemptions. The Roth is exempt from income tax and a subsidy for others is not an income tax to the holder of the Roth. There still will not be an income tax on your Roth. So, I still call baloney.

There is no indication of any legislative intent that a Roth not be considered as income for the purpose of public assistance and in fact it is considered.

BTW, the Roth is not exempt from all tax. If you die the Roth is considered part of your estate and can be subject to estate taxes.

So double baloney.

But Medicare was never intended or sold to the public as a welfare program. Middle class people would likely have never gone along with it if it had been. Public assistance is a welfare program, and was presented as such.

Your very careful definition of a tax is reminding me of Mr. Clintons's immortal words "It depends on the definition of is."

Ha

 

[crazy connie]

It appear the AMA may withdraw support for the House Bill.

AMA's Endorsement of House Health Care Bill Sparks Internal Uprising - FOXNews.com

 

[Martha]

But Medicare was never intended or sold to the public as a welfare program. Middle class people would likely have never gone along with it if it had been. Public assistance is a welfare program, and was presented as such.

Your very careful definition of a tax is reminding me of Mr. Clintons's immortal words "It depends on the definition of is."

Ha

My "very careful definition" is the only thing that is important. What does the tax code say. Not what does a dictionary say. The stated presumption of the tax code is that income in whatever form will be taxed unless the code specifically says it won't. The tax code makes the Roth exempt from income tax. It does not exempt it from estate taxes. It does not say that Roth payments may not be considered when determining eligibility for government benefits.

No need to tax yourselves, the code says what it says.

 

[ERD50]

The Stephanopoulos interview is well done and interesting to watch. He pressed Obama but yet respected his authority to have the last word, or should I say "wordsmithing?"

Yes, I was surprised to see George push as hard as he did. It was well done, even if I may have wanted him to push it just one little step further...

As far as the meaning of the word "tax," the discussion here is probably making far too much of the definition. ...

Of course these alternatives amount to simply some other means of transfering money from private coffers to gov't coffers.

.... Whether it's a "tax" or some other methodology, it needs to be understood and made a part of our planning.

Exactly. I think the dictionary definition denial is interesting, but the change left in my pocket is the real measure of how much I am "taxed".

BTW, the Roth is not exempt from all tax. If you die the Roth is considered part of your estate and can be subject to estate taxes.

So double baloney.

You can triple baloney it if you wish (and I'll triple "smiley" it in case anyone gets the impression that is anything more than good-natured ribbing).

I don't recall the govt ever telling me that the ROTH would be exempt from Estate taxes, so that isn't changing the rules on me. It is what it is.

My "very careful definition" is the only thing that is important. What does the tax code say. Not what does a dictionary say.

....

It does not say that Roth payments may not be considered when determining eligibility for government benefits.

I disagree. What you are describing are the semantics of the word "tax". Maybe that is all that is relevant to a tax attorney, but I suspect the average taxpayer would say that what is left in their pocket is more relevant than the tax code definition of a "tax".

If a Roth withdrawal makes me ineligible for a subsidy, or credit or deduction, or whatever, that leaves less money in my pocket. And in that case it would be attributed directly to the Roth income. So it is in effect, an "income tax", even if the taxman gives it another name. If the taxman finds a way to return that money to my pocket, I'll call it even.

-ERD50

 

[crazy connie]

The only way around the feeling of being taxed opn the ROTH that I can see is fairly simple but not a whole lot of fun. Do not take distributions and qualify for gov't subisidies all the way around. Late in the game you can have a lot to play on or the Humane Society or the kids will appreciate it! That is the only other option I can see happening.

 

[Martha]

I disagree. What you are describing are the semantics of the word "tax". Maybe that is all that is relevant to a tax attorney, but I suspect the average taxpayer would say that what is left in their pocket is more relevant than the tax code definition of a "tax".

-ERD50

The average person has a basic understanding of income tax. It is tax on income that you have to pay unless the rules say otherwise.

A person might be pissed if they are not eligible for a subsidy and look for ways to get one.

But the average person knows that what the law says governs and knows that if their expectations are different than the law that they are out of luck. It isn't "breach of contract" to have unrealistic expectations dashed. And I question how many people really have the expectation that they can get any sort of subsidy meant for low income people if their income is high income but only due to Roth distributions.

Desire and knowledge are two different things.

 

[youbet]

The average person has a basic understanding of income tax. It is tax on income that you have to pay unless the rules say otherwise...............

But the average person knows that what the law says governs and knows that if their expectations are different than the law that they are out of luck..............

We'll have to wait and see what the actual legislation, including any related changes to the tax code, looks like.

As it pertains to FIRE planning and RE expense management, the current thousands of pages of complicated tax code are hardly something the average person has a grasp of and are often interpreted with a wide range of outcomes by lawyers, so-called tax experts, the IRS and the courts. I'm looking forward (NOT!)to seeing what the Congress Critters do this time. It would be a real change if the new rules are written so that the average person (in our case FIRE planner or RE manager) can handle them without professional help.

 

[easysurfer]

I'm all for the health care bill to pass during this window of opportunity. Being able to get and keep health care as long as the premiums are paid without worrying if one's pre-exisiting condition requirements are met or worrying about look back rules would be progress enough.