Nice summary from Ways and Means on proposed changes to ACA released today...

[GrayHare]

Is there a description of where the money is coming from to pay the credit? NIIT would fund at least part of the credit but I believe NIIT is being undone.

 

[Fedup]

Fair to whom? Older people use more health care, young people not as much. Younger people have less money, while older people have time to accumulate money. If anything we want to attract young people to buy insurance.

 

[Fedup]

Control for healthcare cost is a mutiprong approach, just like retirement.

 

[Pilot2013]

We're already redistributing the taxes here because those BENEFITS are tax-free. Both employer and individual markets are subsidized today.

So, based on your statement, ALL INCOME or COMP that is not taxed is a redistribution, it's just that SOME of it gets redistributed to the person that earns it? Good grief. You may dispute that as your statement, but it is 100% accurate.

This is the difference in ideology that just can't be overcome, I'm afraid, and why we wind up in such situations to begin with.

 

[TreeHugger]

https://www.usnews.com/news/best-states/rankings

This ranking is telling me Hawaii may be good place to retire for those who can afford it. It appears to have best healtcare together with Massachusetts.

Yes cost of living is high but at least you get something for it.

 

[bamsphd]

Health insurance is hardly a cornered market.

Tell that to people in AK, AL, KS, NC, OK, SC, WY who generally only have one carrier providing coverage on the exchanges.

For more see:
2017 exchange market: Carrier participation trends | McKinsey on Healthcare

Sharp Decline in Competition Across ACA Exchanges, Experts Predict | Avalere Health

 

[jim584672]

All this uncertainty and I and seriously thinking about getting a Thai retirement visa and blowing out of here with a travel policy.

 

[pb4uski]

Well that is DOA then. What good is insurance availability if the premium is $200,000 a year?

You're being silly... even if there was no cap supply and demand and competition will force a cap at essentially cost + overhead and profit... if a carrier tries to get pig-headed then it will be attractive for other carriers to step in and compete.... also, there is that pesky MLR rule.

Because we have never seen an entity try and make a gross profit in a cornered market, right? Right Mr. Shkreli?

Health insurance is hardly a cornered market.

Tell that to people in AK, AL, KS, NC, OK, SC, WY who generally only have one carrier providing coverage on the exchanges.

For more see:
2017 exchange market: Carrier participation trends | McKinsey on Healthcare

Sharp Decline in Competition Across ACA Exchanges, Experts Predict | Avalere Health

Had you bothered to follow the thread you would understand that my post about it not being a cornered market was in response to a post by Fermion suggesting that carriers would charge excessive premiums and make excessive profits because of the lack of competition.

The reason for lack of competition is the exact opposite... because individual health insurance is not very profitable despite what at times seem to be excessive premium.

So cornered market or not, there are numerous reasons that premiums are not excessive... underlying costs, yes... but not premiums. For one there is the MLR rule, also state regulation (the robustness of which varies from state to state) and third, if premiums were excessive and excessive profits were made then other carriers would enter to try to capture some of that more profitable share. If you guys don't understand that then you don't understand the business.

We have two carriers where I live but despite a lack of competition premiums are somewhat reasonable due to those other factors.

 

[GTFan]

So, based on your statement, ALL INCOME or COMP that is not taxed is a redistribution, it's just that SOME of it gets redistributed to the person that earns it? Good grief. You may dispute that as your statement, but it is 100% accurate.

If employers and employees never see the true cost of insurance (and therefore healthcare), expect the market to be distorted. Therefore, benefits that are not taxed are a form of redistribution. Just like your local city/state/muni giving tax breaks to corps for development. ANY tax break is a redistribution, the government is picking winners and losers.

 

[daylatedollarshort]

All this uncertainty and I and seriously thinking about getting a Thai retirement visa and blowing out of here with a travel policy.

Moving countries remains our plan B. We just keep decluttering and fixing up the house. Worst case we have a nicer, more orderly house and if we need to we're ready to sell or rent it out until Medicare age, as long as Medicare remains like it does today (or better).

I like where we live but also grateful to have other options. I feel bad for those who cannot afford health insurance without subsidies or Medicaid and don't have the option of packing up and moving outside the U.S.

 

[Fedup]

You can always move to Spain. My sister ex-roommate retire early with a small inheritance and that's what she did.

 

[bamsphd]

For one there is the MLR rule

I received an MLR rule rebate on my first year's ACA policy. So after adjusting for the rebate my insurance company must have spent 20% of each premium dollar to pay overhead expenses, such as profits, salaries, marketing, administrative costs, and agent commissions. The other 80% must have been spent on medical claims and activities that improve the quality of care.

If a single company writing all the individual insurance policies in some county wanted to increase their profits and salaries despite the MLR rule, it seems to me the simplest approach would be to pay providers more. Every extra $8 paid to providers equals an extra $2 in profits and salaries. The main limit seems to be how much money can be extracted from subscribers.

also state regulation (the robustness of which varies from state to state)

Once a company achieves the status of being the ONLY company writing insurance in an area, the implied threat of leaving is likely to limit any problematic regulation from that area's government.

and third, if premiums were excessive and excessive profits were made then other carriers would enter to try to capture some of that more profitable share.

The possibility that other insurers might enter the market does limit profits somewhat, but entering an insurance market and setting up a provider network are expensive tasks. Though there are a number of little regional insurers Amanda Baltazar reports:

The five biggest health insurance companies insure approximately half of the insured population, or well over 100 million people.

So other companies will be reluctant to invest in such markets. Smaller companies should realistically expect to be swatted if they mess up a good thing for one of the big five. Especially knowing the incumbent will have inherent cost advantages from market share and sunk costs if real competition breaks out.

Though theoretically illegal, tacit agreements to segment the markets between the few large insurance companies in the US are certainly a possibility.

The other possibility is simply mergers. Aetna's decision to leave exchanges in 11 states was widely seen as retaliation against the Obama Justice Department's opposition to the attempted merger of Aetna with Humana two of the big five insurance companies. I suspect Aetna's withdrawal also tacitly warned state regulators in those states where Aetna stayed to play nice or we will leave your state.

The reason for lack of competition is the exact opposite... because individual health insurance is not very profitable despite what at times seem to be excessive premium.

Actually, I read an article a few months back indicating that insurance companies with a Medicaid background generally did well in the exchanges being familiar with the actuarial traits of the exchange population. It was insurers coming from the employment based insurance background who didn't understand how sick the market was and thus didn't make money.

I've also read that lots of companies including most of the CO-OP's were trying to aggressively build market share relying on the ACA's "risk corridors" provision. When Marco Rubio managed to get that provision unexpectedly changed many companies were badly hurt, and in the smaller CO-OP's cases often outright killed.

https://www.bloomberg.com/news/articles/2013-11-19/marco-rubios-devious-new-plan-to-kill-obamacare

https://www.nytimes.com/2015/12/10/us/politics/marco-rubio-obamacare-affordable-care-act.html?_r=0

 

[ShokWaveRider]

We will most likely move back to Canada, if something close to what is proposed goes through, although we do not like the cold and I do not want to deal with 2 homes in my old age.

I guess it all depends on the phase in too. I have 2 years to Medicare, but DW is only 58. I have a pre-existing condition she does not.

I personally like the alternative plan that was proposed a month back, that allows folks who like the ACA to stay on it, and phase in the choices that are being proposed.

 

[Texas Proud]

A lot of companies are self insured, and only have "companies" to administer there claims, etc. How they choose to manage their company and business, is their business, no?

And HI from your company is a BENEFIT, not compensation. Why all the trying to tax and redistribute so that ANOTHER person can benefit with lower HI premium and RE? Just plan accordingly, it doesn't have to be someone else's job to help with another ability to ER.

I know these won't be welcome thoughts on an ER board. And I am also looking to ER and not work until I am nearly dead, but I guess just like being the first to get through college, the first to.... well, you get the picture, even though my family is not wealthy and I was born with a PLASTIC spoon. I don't want everyone else helping me to ER against their will.

And what is a BENEFIT Yes, compensation.... even the IRS says so...

Fringe Benefits

Fringe benefits are generally included in an employee’s gross income (there are some exceptions)
https://www.irs.gov/businesses/small-businesses-self-employed/employee-benefits
​

What if they paid for your house? Is that not a benefit? Or how about a car? Another benefit.. both are taxable if provided and not for the benefit of the employer...

HI got an exemption and it 'costs' the gvmt $250 billion per year... that is why people talk about taxing it...

 

[Fermion]

Yes, when we were working I would have loved for our company to have paid our car, food, and housing costs tax free by just calling them benefits.

 

[MBSC]

Lets actually be more precise and accurate - the new 5:1 ratio is ONLY if states don't do their own regulations that make it whatever they want. And so there could very well be no cap in some states.

To clarify, states could have tighter ratios but can not exceed the proposed federal maximum. NY and VT are 1:1. MA is 2:1. The language in the bill summaries about allowing states to set their own ratios is not clear enough for the general public.

The actual current PPACA language on rate variance is: "age, except that such rate shall not vary by more than 3 to 1 for adults."

The actual proposed bill language adds the following after 3 to 1 for adults: "is amended by inserting after ‘3 to 1 for adults’ the following: ‘or, for plan years beginning on or after January 1, 2018, as the Secretary may implement through interim final regulation, 5 to 1 for adults."

The proposed bill keeps the PPACA 'shall not vary by more than...' clause.

Rating Variations: https://www.cms.gov/cciio/programs-and-initiatives/health-insurance-market-reforms/state-rating.html

PPACA 3:1 ratio: https://www.law.cornell.edu/uscode/text/42/300gg

 

[explanade]

KFF has put together an interactive comparison tool.

You can compare the ACA not only to the AHCA but to other proposals in Congress:

Compare Proposals to Replace The Affordable Care Act | The Henry J. Kaiser Family Foundation

 

[Pilot2013]

HI got an exemption and it 'costs' the gvmt $250 billion per year... that is why people talk about taxing it...

And here is where the ideology difference comes in...

The thought that one is NOT being taxed on something (Comp, or Benefit) is a COST to the government implies that EVERYTHING is the Governments and that, out of the kindness of their heart, they ALLOW us to have some of it after THEY decide who should get what amount of THEIR (the governments) INCOME.

I have a fundamental, or rather, ideological problem with that thought process.

What amazes me is that someone thinks a person working, should now be taxed on something NEVER PREVIOUSLY taxed, in hopes that that someone can continue their wish of retiring at 45, 50, whatever based on their "fair share" of the working persons earnings helping to subsidize (pay) for their healthcare during their ER time.

 

[travelover]

............The thought that one is NOT being taxed on something (Comp, or Benefit) is a COST to the government implies that EVERYTHING is the Governments and that, out of the kindness of their heart, they ALLOW us to have some of it after THEY decide who should get what amount of THEIR (the governments) INCOME...........

It is really an issue of fairness. Why should Joe get health care tax free while his brother Jim, has to pay for his own health care with after tax dollars?

 

[Pilot2013]

It is really an issue of fairness. Why should Joe get health care tax free while his brother Jim, has to pay for his own health care with after tax dollars?

 

[explanade]

It's a form of compensation.

Period.

 

[Pilot2013]

And therefore, the governments to determine who gets it?

No. Period.

 

[travelover]

It's a form of compensation.

Period.

Exactly. Compensation is compensation.

 

[Pilot2013]

It has NEVER been taxed.

Please pay for your own ER. Don't count on others to fund it.

 

[Texas Proud]

And here is where the ideology difference comes in...

The thought that one is NOT being taxed on something (Comp, or Benefit) is a COST to the government implies that EVERYTHING is the Governments and that, out of the kindness of their heart, they ALLOW us to have some of it after THEY decide who should get what amount of THEIR (the governments) INCOME.

I have a fundamental, or rather, ideological problem with that thought process.

What amazes me is that someone thinks a person working, should now be taxed on something NEVER PREVIOUSLY taxed, in hopes that that someone can continue their wish of retiring at 45, 50, whatever based on their "fair share" of the working persons earnings helping to subsidize (pay) for their healthcare during their ER time.

You can get angry all you want... but NOT taxing health care benefits was a decision that the gvmt made... it did not just appear one day and they said 'let's not tax this'.... and yes, if you want to look at it that way it is out of the kindness of their hearts...

So, a decision was made... back when it was made it was not a big deal... but today that decision does COST the gvmt $250 billion in potential taxes that are lost...

Things that are taxed or are not taxed change all the time... why is this so special? It is not... just like the home mortgage deduction is a cost to the gvmt in lost potential taxes.... (kinda different since it is a deduction as opposed to income)....