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They're millionaires, and they get Obamacare subsidies
Old 01-28-2016, 06:27 AM   #21
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They're millionaires, and they get Obamacare subsidies

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Originally Posted by LARS View Post
First article out in the mainstream press that I can remember where the anomaly of "millionaires" getting subsidy from Obamacare. Interesting to see if this becomes more prevalent and Congress decides to do something about the "loophole"...

They're millionaires, and they get Obamacare subsidies


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Exactly right Lars. Politicos will go after this as a way to show they are on d job - put in their effort to "fix" the problems and close the loopholes

means testing probably just a matter of time.. But we all knew that when the subsidies were first started - not because of millionaires but overall the structure of subsidies is still unsustainable.

I've seen a few articles but nothing as mainstream as CNBC and am sure it will gain publicity since it is an easy spin on "rich vs poor" ...and that sort of "injustice" sells clicks.

I'm waiting for the deluge of articles to suggest means testing for health care subsidies the same way SNAP , subsidized sec 8 housing, free cellphones, utility bill assistance and other "welfare" programs have means testing.

The USA loves to attack those who work hard and save their money. The crab pot mentality has taken hold here ... It's no longer admired to achieve the American Dream but rather it's ridiculed and demonized to be or become "rich" or "wealthy".
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Old 01-28-2016, 08:34 AM   #22
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This "problem" mostly solves itself if we can get the economy back to a place where 2% real interest rates are the norm rather than a fond memory. A big part of the reason that multi-millionaires may qualify for subsidies that kick in at 4x the poverty level is that taxable investment returns are currently so low.

At the moment a 50/50 portfolio consisting of the S&P 500 and Vanguard's bond index yields income of just over $20K per $1 million invested. Hopefully that won't last forever.

On the politics side, in a world where "middle class" has consistently been defined as earning somewhere around or above $200k annually for presidential political purposes, no one is really interest in sticking it to folks with portfolio's in the $1-$3 million range.

This is kind of a non-issue.
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Old 01-28-2016, 08:48 AM   #23
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While I'm not on subsidy, I suspect that many on this forum, even those who are on subsidies, would concede that subsidies were not intended for wealthy retired folks but for low income folks who could not afford health insurance.

The fact that that some wealthy retired folks legally qualify is only because of the way Congress structured the subsidy requirements. If they were to make changes to eliminate subsidies to these people in most cases I suspect it would be a minor inconvenience but not a retirement killer.

Perhaps rather than means testing they could attach a multiplier to dividends, capital gains and Roth conversion income in the O-MAGI calculation. IOW, if for the purpose of the subsidy calculation that dividends, interest, capital gains and Roth conversions were tripled, then that would probably cull out any wealthy folks whose income is managed to qualify for subsidies.
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Old 01-28-2016, 08:49 AM   #24
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This article was pretty silly for anyone actually paying attention.

Next they'll be complaining that some folks with $1M in assets actually are getting health care from medicare?

Or complaining that people with kids get child tax credits. Or that folks who pay mortgage interest can deduct it.

It's all part of the tax code. Smart people claim the credits and deductions that are applicable.
Well said. Bravo.
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Old 01-28-2016, 09:06 AM   #25
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What is the "one weird trick" that is mentioned in the first sentence?

It would have been a lot simpler if the author had simply stated that these people, just like everybody else, claim all applicable tax deductions and tax credits, so that they pay every cent that the owe the government, but not a penny more.
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Old 01-28-2016, 09:09 AM   #26
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Originally Posted by HadEnuff View Post
a "millionaire" infers "wealth", when in fact, a retired person with 1M invested, using a conservative 4% WR (which many including me don't feel is all that conservative considering how much risk one must take on to attempt to generate a 4% return) is living on 40K + SS if they get it.

40K + SS is not "rich"...
+1

And if the individual or couple are intending to self finance long term care, rather than assuming someone else will pick up the tab, expecting assets be depleted before being able to obtain ACA healthcare subsidy is rather self-defeating.
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Old 01-28-2016, 09:18 AM   #27
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Originally Posted by pb4uski View Post
While I'm not on subsidy, I suspect that many on this forum, even those who are on subsidies, would concede that subsidies were not intended for wealthy retired folks but for low income folks who could not afford health insurance.

The fact that that some wealthy retired folks legally qualify is only because of the way Congress structured the subsidy requirements. If they were to make changes to eliminate subsidies to these people in most cases I suspect it would be a minor inconvenience but not a retirement killer.

Perhaps rather than means testing they could attach a multiplier to dividends, capital gains and Roth conversion income in the O-MAGI calculation. IOW, if for the purpose of the subsidy calculation that dividends, interest, capital gains and Roth conversions were tripled, then that would probably cull out any wealthy folks whose income is managed to qualify for subsidies.
I disagree that this was not intentional, in order for ACA to succeed it needs a large number of healthy applicants to make it financially feasible. It is a proven fact that wealthy people are healthier, by allowing them a back route into the ACA you drive up the applicants and increase the health of the pool. This will probably be addressed once the number of ACA users is high enough to sustain the plan, as it is struggling presently it will not be adjusted unless the entire plan is modified.
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Old 01-28-2016, 09:22 AM   #28
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I disagree that this was not intentional, in order for ACA to succeed it needs a large number of healthy applicants to make it financially feasible. It is a proven fact that wealthy people are healthier, by allowing them a back route into the ACA you drive up the applicants and increase the health of the pool. This will probably be addressed once the number of ACA users is high enough to sustain the plan, as it is struggling presently it will not be adjusted unless the entire plan is modified.
The fact is that even without subsidies the wealthy would buy health insurance to avoid losing their wealth if they have an expensive health event. It would be stupid of them to risk tens or hundreds of thousands to avoid spending a few thousand.

I agree that they wanted healthy people in the pool, but we'll need to agree to disagree that they intentionally designed subsidies so the wealthy could take advantage of them to get more healthy folks in the pool. A bit of a silly argument methinks.
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They're millionaires, and they get Obamacare subsidies
Old 01-28-2016, 09:32 AM   #29
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They're millionaires, and they get Obamacare subsidies

I suppose the one argument that might cause Congress to leave it alone is that to add in asset tests is to push the whole program much more into the realm of a "welfare" program, and no longer for mainstream America.


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Old 01-28-2016, 09:45 AM   #30
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Originally Posted by pb4uski View Post



The fact that that some wealthy retired folks legally qualify is only because of the way Congress structured the subsidy requirements. If they were to make changes to eliminate subsidies to these people in most cases I suspect it would be a minor inconvenience but not a retirement killer.
I think from the threads on this board almost everyone planned to pay full freight on ACA plans.

But I'm not sure that subsidies for people with high "net worth" is unintended. At least not like the spousal SS loophole that was closed (estimated to be worth $50k on average). There was already an asset test for Medicaid and they could have used the same or similar process for ACA but didn't.

Quote:


Perhaps rather than means testing they could attach a multiplier to dividends, capital gains and Roth conversion income in the O-MAGI calculation. IOW, if for the purpose of the subsidy calculation that dividends, interest, capital gains and Roth conversions were tripled, then that would probably cull out any wealthy folks whose income is managed to qualify for subsidies.

Maybe they think the current multiplier of 1x is sufficient. They clearly thought about this issue as they made adjustments to agi to include income from tax exempt bonds.

I'm guessing they thought the cost of enforcing an asset test would be too high relative to the benefit. With the spousal SS loophole it's trivial to eliminate but verifying net worth would be a nightmare. There would also be endless discussions about what assets to include (eg home or home equity, 401k) and it still wouldn't eliminate the issue (people would just shift to excluded assets)



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Old 01-28-2016, 10:25 AM   #31
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I think from the threads on this board almost everyone planned to pay full freight on ACA plans.
I know this is true in my case. My planned spending includes full premiums for healthcare.
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Old 01-28-2016, 11:20 AM   #32
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I think this is a bunch of nothing....


Remember the political climate.... Repubs want to repeal the whole bill, Dems want to keep it... neither side has any appetite to fix anything unless it is really broken....


I would be more worried that the whole thing would be repealed long before I would be of losing the subsidy....
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Old 01-28-2016, 12:22 PM   #33
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Thanks for an interesting discussion
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