A hidden benefit of ACA, more angles :-)

[Htown Harry]

With all due respect, I take no comfort in ACA providing any "relative certainty" in "worst case HC expenses". From my perspective of a long pre-Medicare cone of uncertainty, those premiums, deductibles, OOP max's, and (perhaps most importantly) HI-not-covered HC expenses will continue to rise enough to threaten the most well-crafted ER budgets.

That's a fair point, but gone is the uncertainty of being dropped from insurance altogether.

The way I'm looking at it, before ACA the cone of uncertainty had to include the possibility of bearing the full cost of treatment during the second year (and beyond) of a major disease. With the acknowlegment that I don't know much about the state high risk pools now being phased out, my intuition says the cost of a "worst case" year has dropped from well over $100,000 to perhaps $30,000.

Spending $30,000 or $35,000 or $40,000 will be painful, but manageable if my life depends on it. My spread sheet blows up if health care expenses reach $100,000 in a year.

 

[ERhoosier]

That's a fair point, but gone is the uncertainty of being dropped from insurance altogether. ....

Agree that is/was a concern for some locations, but many states already had "shall issue" HI laws &/or high-risk pools in place prior to ACA. And HI premiums (& co-pays/deductibles/etc.) were likely rise significantly with or without ACA. And there's no guarantee under ACA that your actual HC expenses could not hit 6-figures (e.g. serious urgent-but-not-"emergency" illness needing out-of-network care, air ambulance service, organ transplant carrier deems not covered "experimental" service for your condition, etc, etc.). Granted this risk would be lower for those getting subsidies, although clearly not zero.

Don't mean to be a wet blanket, just sayin' that I agree with those FA's & pundits who feel ACA still leaves a huge cone of economic uncertainty for those of us with a decade (or more) 'til Medicare. And no one knows how ACA might evolve in coming years with future administrative & legislative "tweaks". Personally- I have not decreased my intermediate-to-long term HC cost budgeting due to ACA. If that turns out to be too conservative, guess I'll eventually have a bit more beer $$ to spend

 

[UtahSkier]

So I was just wondering with all of the analytical INTJ/engineers on the board anybody else find maximizing ACA subsidies/tax planing an intellectually interesting exercise?

Well, I am a software developer/ engineer and don't find it an interesting exercise, but rather just another task to minimize expenses. The challenge with the ACA is the number of second order effects that must be determined for a particular strategy.

But, when the time comes, I will research and game the system with the best of them!

At the moment, I suspect my strategy will involve income lumping with a 3 year period... 1 year of high income (no subsidy) and 2 years of moderate income(with income). Also, cannot forget to employ the high risk option strategy when my income is unavoidably just a few $K above the 400% FPL...

Need to develop a flowchart for all the possible scenarios.

 

[Nords]

Now I realize that making a complex subject like planning for retirement, even more complicated would be considered a bug not a feature by most normal people. So I was just wondering with all of the analytical INTJ/engineers on the board anybody else find maximizing ACA subsidies/tax planing an intellectually interesting exercise?

It's made me really glad for Tricare.

It's also substantially boosted the blog traffic-- mainly to reassure other Tricare beneficiaries. The interesting "unintended consequence" is that the ACA may substantially boost the VA as well. States are starting to screen their rolls of uninsured & subsidized residents for military service and sending them to the VA for further examination of their benefits. A disappointingly high percentage of these uninsured veterans are also homeless, so the ACA screening also brings them to the attention of the VA lodging voucher program. In other words, the safety net is starting to patch up some of its holes.

+1. Put me on record as someone who doesn't enjoy the little puzzles (tax code, ACA optimization, IRA/401(k)--> Roth money transfers, etc). At the end of the experience I know I saved money compared to doing the simplest, easiest, most obvious thing. But I also know I didn't wring out every last dime of savings, that there were intertwined dependencies I didn't see/couldn't know, and that I therefore will be paying more in taxes than I "should".
Taken together, this stuff is a tremendous waste of our time. If, as a society, we could put these efforts into something productive or at least enjoyable, we would all be better off.
Most fundamentally, I don't enjoy being "incented" with artificial and arbitrary sticks and carrots.

I think the tax code has essentially inspired the entire career field of financial engineering. Now there's a secondary explosion in software trying to help us keep up with the tax code.

I completely agree that collectively that solving these puzzles is a huge waste of time. Perhaps even more tragically, both designing these systems like ACA and the tax code, and figuring out ways of exploiting the loophole attracts lot of smart people.

I introduced Nords to Hawaii Angels (a investment group that funds start ups). Nords, being a very bright guy, immediately said Clif they should rename it Hawaii Angles. He was right with a couple of exceptions the only companies that have been good investments were those that involved in financial engineering (In one case exploiting loopholes in the Japanese tax code), not real engineering.

Grossly generalizing I realize that they are two types of smart people. Those would like to make things for other smart people. These people go to work for the government, law firms, hospital billing departments, nuclear power , Microsoft, Enron and produce or exploit very complex systems and products which are incomprehensible to most people. However, the complexity is appealing to other smart people. Sadly I am in this group.

But the smartest people go to work for places like Google, and Apple, and Tesla and they make really sophisticated products, which are really easy to use. Now I have no clue how you get employees of companies like these to go into government, but I am pretty sure it would be a better world if they did.

Angel investing has been tremendously educational and enlightening, but not profitable. If we had to assess qualities like "bright" and "smart" by the financial results, then I wouldn't qualify for those either.

However angel investing has completely stripped the fantasy away from any romantic impulses I might have ever felt about getting a real job. Another side effect is that it's also immunizing me against other types of active investing and just about all forms of financial engineering. I'm not going to be sitting around in my 80s, at something less than my current cognitive peak (such as it is), wondering whether I should get me some o' that there newfangled angel investing.

In the same way I suspect that those who are smart enough to be offered employment at Google, Apple, and/or Tesla are way too smart to be duped into volunteering their services for the government. If they were dumb enough to step up and serve, they would've already helped build the ACA healthcare exchange websites...

 

[tinlizzy]

I have a question. I have a friend whose husband is on SSDI and she stays home and cares for him. She has always purchased private insurance for herself. Her insurance rates are now too high and because she didn't want to go on Medicaid, it prompted her to investigate what the VA had to offer. She had decided to go with the VA and then asked me how will they know that she now has coverage through the VA?

So my question is, how will they know who has insurance and who doesn't when they begin assessing penalties? Did I miss something? Is every person in the US supposed to register with the exchanges regardless of their insured status?

 

[audreyh1]

Europe is a country? When did that happen?
j/k.

Sure seems like it was where I was there - sorry

I'll rephrase: "Europe is a union ......"

 

[Htown Harry]

So my question is, how will they know who has insurance and who doesn't when they begin assessing penalties? Did I miss something? Is every person in the US supposed to register with the exchanges regardless of their insured status?

No, you do not have to report your coverage to the exchange. From an IRS FAQ on the individual mandate:
Questions and Answers on the Individual Shared Responsibility Provision

Reporting Coverage or Exemptions or Making Payments

24. Will I have to do something on my federal income tax return to show that I had coverage or an exemption?
The individual shared responsibility provision goes into effect in 2014. You will not have to account for coverage or exemptions or to make any payments until you file your 2014 federal income tax return in 2015. Information will be made available later about how the income tax return will take account of coverage and exemptions. Insurers will be required to provide everyone that they cover each year with information that will help them demonstrate they had coverage beginning with the 2015 tax year.

I can speculate that some low income folks whose circumstances previously did not require filing a tax return will now need to file beginning in 2015, purely for ACA reasons.

 

[Buck2520]

I have found researching and examining the ACA to be pretty fun and a good mental exercise. ACA allowing me to retire at 57 now that I have an affordable way to get decent insurance for DW. Sure, it could be improved, but we had to start somewhere, the old system was sure not good for middle income Americans.

 

[ziggy29]

I have found researching and examining the ACA to be pretty fun and a good mental exercise.

I don't know that I'd say "fun", but yes, I have enough of an analytical and mathematical mind that I was "up to the challenge" of doing the math and trying to figure out the optimum coverage options and ways to deal with managing taxable income. It does stimulate that part of the brain a fair bit.

The process of trying to get enrolled, on the other hand, to date has been the antithesis of "fun".

 

[zedd]

...... So I was just wondering with all of the analytical INTJ/engineers on the board anybody else find maximizing ACA subsidies/tax planing an intellectually interesting exercise?

Me?! Gosh no
http://www.early-retirement.org/for...ying-and-learned-to-love-obamacare-69077.html

 

[Chuckanut]

I have found researching and examining the ACA to be pretty fun and a good mental exercise. ACA allowing me to retire at 57 now that I have an affordable way to get decent insurance for DW. Sure, it could be improved, but we had to start somewhere, the old system was sure not good for middle income Americans.

While many people don't like the ACA, and it is certainly not perfect, what the critics forget is the number of people who can't get insurance today and it's no fault of theirs. I know a number of people who can't get coverage due to pre existing conditions, or having their work hours cut so below the company minimum for insurance.

Don't like ACA and want to get rid of it? Fix this type of problem and its supporters will be greatly reduced.

 

[Independent]

+1. Put me on record as someone who doesn't enjoy the little puzzles (tax code, ACA optimization, IRA/401(k)--> Roth money transfers, etc). At the end of the experience I know I saved money compared to doing the simplest, easiest, most obvious thing. But I also know I didn't wring out every last dime of savings, that there were intertwined dependencies I didn't see/couldn't know, and that I therefore will be paying more in taxes than I "should".
Taken together, this stuff is a tremendous waste of our time. If, as a society, we could put these efforts into something productive or at least enjoyable, we would all be better off.
Most fundamentally, I don't enjoy being "incented" with artificial and arbitrary sticks and carrots.

+1

I can do this stuff. I used to get paid for doing it. But, it's a terrible waste of time.

 

[seraphim]

Originally Posted by clifp
So I was just wondering with all of the analytical INTJ/engineers on the board anybody else find maximizing ACA subsidies/tax planing an intellectually interesting exercise?


I would, perhaps, except there's no benefit to wasting my time. I can't get our retirement income low enough to qualify for any type of subsidy.

 

[sengsational]

Originally Posted by clifp
So I was just wondering with all of the analytical INTJ/engineers on the board anybody else find maximizing ACA subsidies/tax planing an intellectually interesting exercise?


I would, perhaps, except there's no benefit to wasting my time. I can't get our retirement income low enough to qualify for any type of subsidy.

What if you increase your family size by taking in a foster child or two? That would make life interesting, hehe.

 

[audreyh1]

Not really - I have invested a few weeks worth of time figuring this out for myself and DH.

We're coming out well ahead financially, so I'm glad we had the opportunity to switch to plans that better suit our current financial status. But I hope to not have to spend more than a cursory amount of time reviewing my options every open enrollment period.

Like tax planning. I review it every few years. We did a major review these past couple of weeks, and I'm glad that's over too! That was a lot of work, but now we have a good plan to work with over the next few years.

And I got DH to take on itemized deductions and charitable gifting - yay!

Nope - rather not have to spend a lot of time on such things, and I only do so if I think we'll save significant money.

 

[M Paquette]

Originally Posted by clifp
So I was just wondering with all of the analytical INTJ/engineers on the board anybody else find maximizing ACA subsidies/tax planing an intellectually interesting exercise?

Indeed. The problem reduces to simply identifying the lowest minima in an n-dimensional hypersurface. Specification of the objective function is left as an exercise for the reader.

 

[audreyh1]

Indeed. The problem reduces to simply identifying the lowest minima in an n-dimensional hypersurface. Specification of the objective function is left as an exercise for the reader.

Well, I did make a spreadsheet.

 

[clifp]

Well, I did make a spreadsheet.

Well Warren Buffett doesn't need no stinking spreadsheet so neither do I.. I just solved for the minimal tax vs expected medical expense in my head.
And then I got a headache and said screwed it am sticking with my existing plan.

 

[NW-Bound]

Indeed. The problem reduces to simply identifying the lowest minima in an n-dimensional hypersurface. Specification of the objective function is left as an exercise for the reader.

If one's objective is to get the lowest cost, when he needs medical care he may find out that no doctors or hospitals nearby accept his policy. This, I fear.

 

[M Paquette]

If one's objective is to get the lowest cost, when he needs medical care he may find out that no doctors or hospitals nearby accept his policy. This, I fear.

Always a good thing to check before buying. Don't forget to re-check every year at the start of open enrollment, as well. Plans can change their provider network from year to year.

(I lost lab services and some other facilities one year, the same year the insurer CEO retired with a billion-dollar plus package. I'm sure that the two events had nothing whatsoever to do with each other, of course. They probably found the money under a cabbage.)

 

[ziggy29]

If one's objective is to get the lowest cost, when he needs medical care he may find out that no doctors or hospitals nearby accept his policy. This, I fear.

Yeah, this is part of the reason why I'm choosing to pay more for a PPO instead of an HMO. The latter is more restricted in terms of the provider network and also restricts access to specialists. I'll eat another $65 a month to get access to a bigger network of doctors and hospitals, and to be able to see a specialist without a referral.

 

[HFWR]

Well Warren Buffett doesn't need no stinking spreadsheet so neither do I.. I just solved for the minimal tax vs expected medical expense in my head.
And then I got a headache and said screwed it am sticking with my existing plan.

Ah, a medical expense...

 

[jflynn4]

Yeah, this is part of the reason why I'm choosing to pay more for a PPO instead of an HMO. The latter is more restricted in terms of the provider network and also restricts access to specialists. I'll eat another $65 a month to get access to a bigger network of doctors and hospitals, and to be able to see a specialist without a referral.

Ive enrolled in an HMO plan thru BCBS of Florida. I did so after researching the policy and finding that, as long as they're in the network, no referral is required for a specialist. Surprised me ....

 

[Theduckguru]

The PPACA is certainly not perfect, but the good out weighs the bad IMO.

 

[audreyh1]

Ive enrolled in an HMO plan thru BCBS of Florida. I did so after researching the policy and finding that, as long as they're in the network, no referral is required for a specialist. Surprised me ....

That's a major benefit of a PPO.

However, some HMOs do allow you to see a (in-network) specialist without referral, so it really depends on the HMO.