Poll: Who's going to try to get ACA subsidies by staying under the threshold?

[RunningBum]

Great topic, and some great points made here! As someone said, I'm now spending more time trying to figure out how to control income rather than deciding which investments to make. I was already doing a good bit of this with Roth conversion planning, and PPACA brings a whole new ballgame.

Much of my money is in a taxable account, so my 2012 AGI without Roth conversion was barely under the threshold level. As I understand it you can't hide income with tax free bonds. You can't reduce it with deductions. It seems that all I can really do is invest in things that don't throw much income.

- I've had to keep some bonds in my taxable account to keep my bond/equity AA up. Do I reduce my bond holdings to generate less income?

- I am mostly in index funds but even they paid 2% dividends last year, 1.7 the year before. The VG Total International Index in particular had a lot of dividends last year, 3%. Should I reduce my international mix just to control income, or was last year an aberration?

- I think I will do a partial Roth conversion this year to the top of my 25% bracket and then plan tiny or no conversions for awhile, or maybe once every few years do a large conversion and skip the subsidy that year. I understand this means I won't get the subsidy going into 2014, but rather after the end of the year when I prove that I (hopefully) made it under the threshold. I wish I had understood this better and done a larger Roth conversion in 2012 as well. If I just don't do Roth conversions, I think RMDs are going to easily drive me into the 25% bracket later, if the tax rate structure doesn't change in 20 years.

- Should I take more capital gains this year to avoid them in future years? I can sell a mutual fund for a LT capital gain and immediately buy it back, can't I?

Someone mentioned that the incentive to keep income low will also have the affect of less income tax revenue for the government. In the long run I disagree, as I think I will be doing some things less tax efficiently. Specifically I'll be doing less optimal tax management of my IRA.

Is staying under the threshold worth it for me to be less tax efficient otherwise and perhaps alter my diversification strategy? I guess I'll wait and see what my insurance premiums will be in 2014. I'm paying just $239/month now for a high deductible HSA-eligible policy, but I started that policy in 2012 so I'm not grandfathered in.

 

[gerrym51]

Great topic, and some great points made here! As someone said, I'm now spending more time trying to figure out how to control income rather than deciding which investments to make. I was already doing a good bit of this with Roth conversion planning, and PPACA brings a whole new ballgame.

Much of my money is in a taxable account, so my 2012 AGI without Roth conversion was barely under the threshold level. As I understand it you can't hide income with tax free bonds. You can't reduce it with deductions. It seems that all I can really do is invest in things that don't throw much income.

- I've had to keep some bonds in my taxable account to keep my bond/equity AA up. Do I reduce my bond holdings to generate less income?

- I am mostly in index funds but even they paid 2% dividends last year, 1.7 the year before. The VG Total International Index in particular had a lot of dividends last year, 3%. Should I reduce my international mix just to control income, or was last year an aberration?

- I think I will do a partial Roth conversion this year to the top of my 25% bracket and then plan tiny or no conversions for awhile, or maybe once every few years do a large conversion and skip the subsidy that year. I understand this means I won't get the subsidy going into 2014, but rather after the end of the year when I prove that I (hopefully) made it under the threshold. I wish I had understood this better and done a larger Roth conversion in 2012 as well. If I just don't do Roth conversions, I think RMDs are going to easily drive me into the 25% bracket later, if the tax rate structure doesn't change in 20 years.

- Should I take more capital gains this year to avoid them in future years? I can sell a mutual fund for a LT capital gain and immediately buy it back, can't I?

Someone mentioned that the incentive to keep income low will also have the affect of less income tax revenue for the government. In the long run I disagree, as I think I will be doing some things less tax efficiently. Specifically I'll be doing less optimal tax management of my IRA.

Is staying under the threshold worth it for me to be less tax efficient otherwise and perhaps alter my diversification strategy? I guess I'll wait and see what my insurance premiums will be in 2014. I'm paying just $239/month now for a high deductible HSA-eligible policy, but I started that policy in 2012 so I'm not grandfathered in.

you will probably have to apply for subsidy every year, over the course of years to 65. take the hit in some of the years on income and apply f0r subsidy in others

 

[teejayevans]

In your planning don't forget at 65 you will be switching to Medicaid, so from 65-70 you do some income harvesting during that period especially if you are postpone SS till 70.
Also I'm guessing subsidies will be reduced over time, so enjoy it will it lasts
TJ

 

[gerrym51]

In your planning don't forget at 65 you will be switching to Medicaid, so from 65-70 you do some income harvesting during that period especially if you are postpone SS till 70.
Also I'm guessing subsidies will be reduced over time, so enjoy it will it lasts
TJ

subsidies will not be reduced.as shown by the california plans the plans available to be subsidized are tied to medicaid networks at the lowest possible cost to government.

 

[CH]

subsidies will not be reduced.as shown by the california plans the plans available to be subsidized are tied to medicaid networks at the lowest possible cost to government.

My understanding is you receive a subsidy if you buy insurance on the exchange and are between 133% and 400% of poverty. In some situations, you may receive a prepayment of the subsidy in advance but you really do not know how much of a subsidy you are actually entitled to until you file your federal income taxes. Therefore as far as care and networks, you are not going to be treated differently than other non-subsidized people in the same plan. If you have the silver plan and are in the lower income range (133% to 200% I think it is), you not only receive premium subsidy but also out of pocket subsidy. I don't see those between 133% and 400% of poverty being tied to a medicaid network since they won't know your level of subsidy until you file your taxes.

Also, I remember reading that the law already says if subsidies exceed X% (.5%?) of GDP, after 2018, the subsidies will be reduced with emphasis on the higher subsidized incomes. I don't know how you can be so sure that subsidies will not be reduced. I think it is very possible they may, especially on the higher subsidized earners after 2018.

 

[gerrym51]

My understanding is you receive a subsidy if you buy insurance on the exchange and are between 133% and 400% of poverty. In some situations, you may receive a prepayment of the subsidy in advance but you really do not know how much of a subsidy you are actually entitled to until you file your federal income taxes. Therefore as far as care and networks, you are not going to be treated differently than other non-subsidized people in the same plan. If you have the silver plan and are in the lower income range (133% to 200% I think it is), you not only receive premium subsidy but also out of pocket subsidy. I don't see those between 133% and 400% of poverty being tied to a medicaid network since they won't know your level of subsidy until you file your taxes.

Also, I remember reading that the law already says if subsidies exceed X% (.5%?) of GDP, after 2018, the subsidies will be reduced with emphasis on the higher subsidized earners. I don't know how you can be so sure that subsidies will not be reduced. I think it is very possible they may, especially on the higher subsidized earners after 2018.

i keep posting these but no one reads them..
http://www.coveredca.com/media/10745/CoveredCA_HealthPlanBenefitsSummary.pdf

the first is eligible for subsidies chart planhttp://www.coveredca.com/media/10745/CoveredCA_HealthPlanBenefitsSummary.pdf

the next is not eligible for subsidies chart plan

http://www.coveredca.com/media/10748/CoveredCA-HealthPlanBenefitsComparisonChart.pdf


the next is each available plan listed singly-the one that are available for subsidies say for 100-150 percent of poverty or 250-300 poverty you will read this infor on top of each

http://www.healthexchange.ca.gov/So...BEX Standardized Designs w final av calc.pdf


now you may ask why is there bronze thru platinum plans that are subsidy eligible and NOT subsidy eligible.

because the subsidy eligible one's are adaptations of medicaid networks the non-subsidy eligible ones are not.

 

[MichaelB]

i keep posting these but no one reads them..
http://www.coveredca.com/media/10745/CoveredCA_HealthPlanBenefitsSummary.pdf

the first is eligible for subsidies chart planhttp://www.coveredca.com/media/10745/CoveredCA_HealthPlanBenefitsSummary.pdf

the next is not eligible for subsidies chart plan

http://www.coveredca.com/media/10748/CoveredCA-HealthPlanBenefitsComparisonChart.pdf


the next is each available plan listed singly-the one that are available for subsidies say for 100-150 percent of poverty or 250-300 poverty you will read this infor on top of each

http://www.healthexchange.ca.gov/So...BEX Standardized Designs w final av calc.pdf


now you may ask why is there bronze thru platinum plans that are subsidy eligible and NOT subsidy eligible.

because the subsidy eligible one's are adaptations of medicaid networks the non-subsidy eligible ones are not.

Gerry, where does it say California will have a subsidized plan that uses Medicaid networks?

 

[CH]

i keep posting these but no one reads them..
http://www.coveredca.com/media/10745/CoveredCA_HealthPlanBenefitsSummary.pdf

the first is eligible for subsidies chart planhttp://www.coveredca.com/media/10745/CoveredCA_HealthPlanBenefitsSummary.pdf

the next is not eligible for subsidies chart plan

http://www.coveredca.com/media/10748/CoveredCA-HealthPlanBenefitsComparisonChart.pdf


the next is each available plan listed singly-the one that are available for subsidies say for 100-150 percent of poverty or 250-300 poverty you will read this infor on top of each

http://www.healthexchange.ca.gov/Solicitations/Documents/022513CA%20HBEX%20Standardized%20Designs%20%20w%20final%20av%20calc.pdf


now you may ask why is there bronze thru platinum plans that are subsidy eligible and NOT subsidy eligible.

because the subsidy eligible one's are adaptations of medicaid networks the non-subsidy eligible ones are not.

Gerry,

I had read the links thoroughly and appreciate you posting them.

Here's my thinking, which admittedly could be wrong: Let's take the Silver CoPay Plan. I believe there is only one Silver CoPay Plan. If your income qualifies you for a subsidy, then you pay less as is shown by the subsidized columns on the tables. Whether your income qualifies you for a subsidy or not, you can access the same network of providers and the providers will all get paid the same based on whatever the Silver CoPay Plan pays.

Stated another way, it is not a bunch of different subsidy-eligable Silver Copay Plans and unsubsidized Silver CoPay Plan. It is one Silver CoPay Plan, shown in different columns with subsidies applied for different income ranges.

I could not find anywhere where it is stated or implied that Medicaid or Medicaid networks factor into this in any way.

I could also not find anyplace where it stated or implied that subsidized plans have any less access to provider networks or have different provider networks.

If I missed these things, please point them out.

Would like to hear back from Gerry and others on how to interpret the links from Ca.

 

[gerrym51]

Gerry,

I had read the links thoroughly and appreciate you posting them.

Here's my thinking, which admittedly could be wrong: There is one Silver Plan. If your income qualifies you for a subsidy, then you pay less as is shown by the subsidized columns on the tables. Whether your income qualifies you for a subsidy or not, you can access the same network of providers and the providers will all get paid the same based on whatever the Silver plan pays.

I could not find anywhere where it is stated or implied that Medicaid or Medicaid networks factor into this in any way. I don't think Medicaid plays into this in any way.

I could also not find anyplace where it stated or implied that subsidized plans have any less access to provider networks or have different provider networks.

If I missed these things, please point them out.

Would like to hear back from Gerry and others on how to interpret the links from Ca.

of course it's NOT GOING TO SAY MEDICAID NETWORKS. in mass they do the same thing. the advantage i have as a pharmacist i know all the medicaid networks in mass. the subsidized sheet for california starting on the left is for the lowest subsidy is just about all medi-cal


if its not why have them all listed like this especially the third link which lists each individually. if it's not that why have so many different specs.

i'll tell you why even if you think i'm wrong. Obamacare can control the minimum requirments to insurance. they can also say they will subsidize you.
but they want to pay the minimum
they can get away with.

medicaid based plans are the cheapest per person the government gets providing health insurance. they do this by restricting networks and short changing providers. their subsidized plans are medicaid plans with different names giving to higher deductibles and co-pays.

remember even though they are subsdizeded f your premium they are still paying for the underlying insurance.

 

[CH]

of course it's NOT GOING TO SAY MEDICAID NETWORKS. in mass they do the same thing. the advantage i have as a pharmacist i know all the medicaid networks in mass. the subsidized sheet for california starting on the left is for the lowest subsidy is just about all medi-cal


if its not why have them all listed like this especially the third link which lists each individually. if it's not that why have so many different specs.

i'll tell you why even if you think i'm wrong. Obamacare can control the minimum requirments to insurance. they can also say they will subsidize you.
but they want to pay the minimum
they can get away with.

medicaid based plans are the cheapest per person the government gets providing health insurance. they do this by restricting networks and short changing providers. their subsidized plans are medicaid plans with different names giving to higher deductibles and co-pays.

remember even though they are subsdizeded f your premium they are still paying for the underlying insurance.

I think they arranged the columns that way so people can easily understand how the plan applies to them, based on their income. I understand what you suspect, but there is no evidence to support your suspicion. I hope you are wrong.

 

[gerrym51]

I think they arranged the columns that way so people can easily understand how the plan applies to them, based on their income. I understand what you suspect, but there is no evidence to support your suspicion. I hope you are wrong.

then you have just chosen to ignore the last link were every single plan is listed.

WHY have it listed that way.

when it comes time to enroll at a states exchange you'll go to it and it will have 2 clickable options

if your applyingf or a subsidy go here-then it will list plans AND enrollment form.

if your not applying for a subsidy go here-and the insurance plans will list.


thatshow it's done in mass.-although i agree it's not exact to obamacre-but obamacare did copy from it.

 

[REWahoo]

of course it's NOT GOING TO SAY MEDICAID NETWORKS. in mass they do the same thing. the advantage i have as a pharmacist i know all the medicaid networks in mass. the subsidized sheet for california starting on the left is for the lowest subsidy is just about all medi-cal


if its not why have them all listed like this especially the third link which lists each individually. if it's not that why have so many different specs.

i'll tell you why even if you think i'm wrong. Obamacare can control the minimum requirments to insurance. they can also say they will subsidize you.
but they want to pay the minimum
they can get away with.

medicaid based plans are the cheapest per person the government gets providing health insurance. they do this by restricting networks and short changing providers. their subsidized plans are medicaid plans with different names giving to higher deductibles and co-pays.

remember even though they are subsdizeded f your premium they are still paying for the underlying insurance.

The government won't pay less if your insurance plan costs less. The subsidy amounts are based on income, not on what the plans cost.

What am I missing?

 

[gerrym51]

The government won't pay less if your insurance plan costs less. The subsidy amounts are based on income, not on what the plans cost.

What am I missing?

yes the subsidy amounts ARE based on your income-but the plan itself is being paid by the government
a higher cost plan costs you more AND the government more.

again why list this way.


i'll post this again

http://www.forbes.com/sites/scottgo...rance-is-looking-more-and-more-like-medicaid/


now in Obamacares defense-coverage IS coverage. but harder to find provider

 

[REWahoo]

yes the subsidy amounts ARE based on your income-but the plan itself is being paid by the government
a higher cost plan costs you more AND the government more.

Maybe I missed it somewhere, but exactly how is "the plan itself being paid by the government"? I thought individuals were buying the insurance and based on income, the govt was helping individuals pay the premiums via subsidies.

Whether an individual chooses a lower priced plan (bronze) or something higher, the amount of subsidy is the same. No difference in the cost to the govt, only to the individual.

again why list this way.

To show the purchaser the net cost of the plans after subtracting the subsidy payments is my guess.

 

[gerrym51]

Maybe I missed it somewhere, but exactly how is "the plan itself being paid by the government"? I thought individuals were buying the insurance and based on income, the govt was helping individuals pay the premiums via subsidies.

Whether an individual chooses a lower priced plan (bronze) or something higher, the amount of subsidy is the same. No difference in the cost to the govt, only to the individual.



To show the purchaser the net cost of the plans after subtracting the subsidy payments is my guess.

i guess we'll just have to disagree. we can revisit the issue in november.

 

[REWahoo]

i guess we'll just have to disagree. we can revisit the issue in november.

I tried to answer your questions but you won't answer mine?

 

[gerrym51]

I tried to answer your questions but you won't answer mine?

i thought i did but this writer explains it better than I.


Should Arkansas Take the Obamacare Medicaid Deal? Probably Not - Forbes

 

[MichaelB]

i'll post this again

The New Obamacare Insurance Is Looking More Like Medicaid - Forbes

All right, I'll admit - I opened the link and read the article. It references another article from the WSJ, here Hospitals Forge New Deals With Insurers - WSJ.com

The WSJ article references plans between one hospital group and one insurer to negotiate discounted prices and limit the network of providers within the group. It references another insurer plan to so something similar in a specific state. It then says Medicaid does the same thing. It then implies that the plans on the exchange will be built on Medicaid networks and pay medicaid rates, but it does not give one single data point.

Of course, what they don't point out is that every insurance plan and hospital group in the country negotiates discounts and limits the provider network. This is pure speculation and flawed logic.

Too bad, because it may be true that some states do plan to make low cost plans available that are similar to Medicaid. In fact, some states are trying to move Medicaid onto private insurers, and it looks like HHS will support the effort.

 

[REWahoo]

i thought i did but this writer explains it better than I.

Should Arkansas Take the Obamacare Medicaid Deal? Probably Not - Forbes

The article outlines how the policies on the exchanges differ from Medicaid and how a proposed plan in Arkansas to allow Medicaid eligible individuals to go through the Arkansas exchange is being thwarted by HHS:

Put simply, the “exchange” based insurance that will be offered to Medicaid beneficiaries [in Arkansas] will not be much like the exchange-based insurance that people from 138 to 400 percent of the federal poverty level will receive. HHS makes that clear in the second paragraph of their memo, in which they state that states will not have the option to expand Medicaid to 100 percent of FPL, putting people in the 100-138 percent FPL income bracket onto the exchanges.

I see nothing in this article that supports your claim anyone getting subsidized insurance through an exchange will be placed in what is actually a Medicare network . To the contrary, the article points out there is a distinct difference between Medicare and what is offered on the exchanges - but gives no network information that I could see.

Now, back to the question I asked and you haven't yet answered:

... how is "the plan itself being paid by the government"? I thought individuals were buying the insurance and based on income, the govt was helping individuals pay the premiums via subsidies.

 

[gerrym51]

All right, I'll admit - I opened the link and read the article. It references another article from the WSJ, here Hospitals Forge New Deals With Insurers - WSJ.com

The WSJ article references plans between one hospital group and one insurer to negotiate discounted prices and limit the network of providers within the group. It references another insurer plan to so something similar in a specific state. It then says Medicaid does the same thing. It then implies that the plans on the exchange will be built on Medicaid networks and pay medicaid rates, but it does not give one single data point.

Of course, what they don't point out is that every insurance plan and hospital group in the country negotiates discounts and limits the provider network. This is pure speculation and flawed logic.

Too bad, because it may be true that some states do plan to make low cost plans available that are similar to Medicaid. In fact, some states are trying to move Medicaid onto private insurers, and it looks like HHS will support the effort.

Michael,

now that we've gone thru this i will tell you. I actually think something had to be done about medical coverage in this country. the idea behind Obamacare is not bad. Mitt Romney actually backed the idea(he was governor of it).

the working poor,people with existing conditions etc. It does work in mass. it does give people options-but it has to be paid for by somebody.

using medicaid networks(even if its another name) is not bad in and of itself.

especially the ones with existing conditions who could not buy coverage even if they could afford it.

but everything has a TRUE price.


the old axiom of insurance-the more you squeeze the providers the fewer providers you get.tell the purchasers were giving you exclusive networks to lower your costs. both statements are correct

 

[rbmrtn]

Of course, what they don't point out is that every insurance plan and hospital group in the country negotiates discounts and limits the provider network. This is pure speculation and flawed logic.

That's what I was thinking also when I read the article.

but everything has a TRUE price.

Isn't that part of the problem, the consumer has no idea what it cost because every insurance negotiates a different price with every provider and it is all different than cash.

 

[gerrym51]

The article outlines how the policies on the exchanges differ from Medicaid and how a proposed plan in Arkansas to allow Medicaid eligible individuals to go through the Arkansas exchange is being thwarted by HHS:

I see nothing in this article that supports your claim anyone getting subsidized insurance through an exchange will be placed in what is actually a Medicare network . To the contrary, the article points out there is a distinct difference between Medicare and what is offered on the exchanges - but gives no network information that I could see.

Now, back to the question I asked and you haven't yet answered:

medicaid -not medicare-to lower the cost of a network squeeze providers-i cannot offer any more than my own opinions based on mass-which i live,california-based on what they provided.

since i can't offer any more i will have to wait until more states issue more stuff.

 

[gerrym51]

That's what I was thinking also when I read the article.



Isn't that part of the problem, the consumer has no idea what it cost because every insurance negotiates a different price with every provider and it is all different than cash.

and medicaid networks are the lowest cost providers currently. if blue cross wants to compete with a medicaid based provider they have to get their own plan down to the costs of a medicaid based provider.

 

[Gatordoc50]

How is the subsidy supposed to work ? I would assume that it is either paid by the government or it is not paid at all. It certainly isn't going to be paid by the consumer and then reimbursed.

 

[MichaelB]

How is the subsidy supposed to work ? I would assume that it is either paid by the government or it is not paid at all. It certainly isn't going to be paid by the consumer and then reimbursed.

See this http://www.kff.org/healthreform/upload/7962-02.pdf
Premium tax credits are advanced at the time of enrollment. They can also be part of a refund. Cost sharing subsidies for lower income people will be administered by moving people into higher AV policies. This probably explains the confusion with the California plans.