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Old 03-01-2024, 02:19 PM   #1
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ACA costs

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Originally Posted by rodi View Post
Healthcare is not as expensive as some have suggested (someone said $10k/year.... We have a family of four (2 kids in college) and spend under that. ACA helps those who have smaller MAGI. Having just finished my taxes, our gross income was close to 150k.
We will be going on ACA at the start of April, so this is new to me and hasn't happened yet. For us (household of two), with an estimated MAGI of $120k, healthcare.gov spits out premiums (never mind out of pocket costs) of ~$9.6k / year. I'm not doubting you; I'm trying to understand the difference.

* One thing could be that we will sign up for a PPO instead of an HMO. The relevant HMO plan premiums are ~$6.1k / year.

* Household of four vs. two??

* You mentioned gross income, not MAGI income. As I read the regulations, we won't have any deductions from AGI to ACA MAGI. Maybe your household does?

*It's also possible that I'm missing some major factor and don't realize it.

[Note that we will be consulting a CPA who is experienced in these matters!]
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Old 03-01-2024, 02:40 PM   #2
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Originally Posted by TickTock View Post
We will be going on ACA at the start of April, so this is new to me and hasn't happened yet. For us (household of two), with an estimated MAGI of $120k, healthcare.gov spits out premiums (never mind out of pocket costs) of ~$9.6k / year. I'm not doubting you; I'm trying to understand the difference.

* One thing could be that we will sign up for a PPO instead of an HMO. The relevant HMO plan premiums are ~$6.1k / year.

* Household of four vs. two??

* You mentioned gross income, not MAGI income. As I read the regulations, we won't have any deductions from AGI to ACA MAGI. Maybe your household does?

*It's also possible that I'm missing some major factor and don't realize it.

[Note that we will be consulting a CPA who is experienced in these matters!]
Yeah, health care can be extremely expensive.

I got a POS plan, which is an HMO and indemnity plan. Even looking at the PPO plans, health care can be very expensive if you need services which are not covered in network. I think I saw some out of network out of pocket maxes of like $45,000 for a couple or family, and that doesn't even include balance billing charges on top of that or other uncovered services and all your in-network deductible and out of pocket costs.

My max out of pocket for out of network for just me is $13,900, and that's on top of thousands of in-nework out of pocket max.
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Old 03-01-2024, 05:04 PM   #3
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Originally Posted by TickTock View Post
We will be going on ACA at the start of April, so this is new to me and hasn't happened yet. For us (household of two), with an estimated MAGI of $120k, healthcare.gov spits out premiums (never mind out of pocket costs) of ~$9.6k / year.]

As I read it you don't get an ACA subsidy with a MAGI of $120k. 400% of poverty level for a family of two is, $81,760

"Once an individual or household's annual income is 401% or more of the FPL they are likely no longer eligible for subsidies. Those who are not eligible for ACA premium tax credits must front the entire bill for their health insurance. There is currently no phase out of subsidies for those who make just over the FPL"
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Old 03-01-2024, 05:24 PM   #4
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As I read it you don't get an ACA subsidy with a MAGI of $120k. 400% of poverty level for a family of two is, $81,760

"Once an individual or household's annual income is 401% or more of the FPL they are likely no longer eligible for subsidies. Those who are not eligible for ACA premium tax credits must front the entire bill for their health insurance. There is currently no phase out of subsidies for those who make just over the FPL"
The "cliff" has been suspended through 2025:

But for 2021 and 2022, the American Rescue Plan (ARP, also referred to as the third COVID relief bill) eliminated the subsidy cliff. And the Inflation Reduction Act (IRA) extended this through 2025.
Instead of ending subsidies when a household's income exceeds 400% of the poverty level, the new laws ensure that subsidies gradually decline as income grows.


https://www.verywellhealth.com/aca-s...verty%20level.

And if it doesn't get extended, yes that will be the case again.
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Old 03-01-2024, 05:32 PM   #5
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I don't get ACA subsidies and my premium for a Silver Plan is about $16K a year for one person (age 61). My maximum OOP is $9,100. So in the worst case scenario, my health insurance costs $25K a year. My husband is on Medicare with a Plan F supplement. He is on Trulicity, so his Plan D+out of pocket for drugs is about $3,200 per year. His Plan F supplement costs about $3,400 not including Medicare Plan B premiums.

We are able to itemize deductions each year due to high medical costs. Once I turn 65, I think we will be able to drop back to doing standard deductions.
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Old 03-01-2024, 06:49 PM   #6
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I don't get ACA subsidies and my premium for a Silver Plan is about $16K a year for one person (age 61). My maximum OOP is $9,100. So in the worst case scenario, my health insurance costs $25K a year. My husband is on Medicare with a Plan F supplement. He is on Trulicity, so his Plan D+out of pocket for drugs is about $3,200 per year. His Plan F supplement costs about $3,400 not including Medicare Plan B premiums.

We are able to itemize deductions each year due to high medical costs. Once I turn 65, I think we will be able to drop back to doing standard deductions.
For DW and I, the PPO plan (according to healthcare.gov, we will go on this starting in April) is ~$9.6k in premiums with a max OOP for $18.9 [and a deductible of $18k!], so our worst-case scenario is $28.5k / year, or ~1.2k / month per person.
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Old 03-01-2024, 06:51 PM   #7
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MODs: This thread is splitting into two discussions - one on Suze Orman / Dave Ramsey and the other on ACA costs. Would it make sense for me to start a new thread in the Health and Early Retirement forum for ACA costs?
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Old 03-01-2024, 07:04 PM   #8
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My maximum OOP is $9,100. So in the worst case scenario, my health insurance costs $25K a year.
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Originally Posted by TickTock View Post
For DW and I, the PPO plan (according to healthcare.gov, we will go on this starting in April) is ~$9.6k in premiums with a max OOP for $18.9 [and a deductible of $18k!], so our worst-case scenario is $28.5k / year, or ~1.2k / month per person.

Be careful about those worst case scenarios. Your out of pocket for out of network could be much higher, and some services might not be available in network. Plus you have balance billing on top of that which isn't limited by out of pocket max. Plus, you have all your in network out of pocket maximums separately. My out of network out of pocket is 463% of my in-network out of pocket, as an example.
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Old 03-01-2024, 07:11 PM   #9
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MODs: This thread is splitting into two discussions - one on Suze Orman / Dave Ramsey and the other on ACA costs. Would it make sense for me to start a new thread in the Health and Early Retirement forum for ACA costs?
Yes, it would be best in a separate thread, so I have moved the relevant threads to this new one.
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Old 03-01-2024, 07:54 PM   #10
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Be careful about those worst case scenarios. Your out of pocket for out of network could be much higher, and some services might not be available in network. Plus you have balance billing on top of that which isn't limited by out of pocket max. Plus, you have all your in network out of pocket maximums separately. My out of network out of pocket is 463% of my in-network out of pocket, as an example.
With my EPO plan, I have not encountered out of network charges. I was in a major golf cart accident in 2022 with 5 rib fractures in multi-segments for each rib, large larcerated liver and punctured lung. I was taken to the hospital in an ambulance and I was in ICU with CT Scans etc. My hospital bill was about $140K but with insurance negotiated rate, they were paid about $25K. I hit my max OOO of about $8K that year. Fortunately, the city sells an ambulance plan for $99 a year and it covered my ambulance out of pocket cost.
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Old 03-01-2024, 08:26 PM   #11
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With my EPO plan, I have not encountered out of network charges. I was in a major golf cart accident in 2022 with 5 rib fractures in multi-segments for each rib, large larcerated liver and punctured lung. I was taken to the hospital in an ambulance and I was in ICU with CT Scans etc. My hospital bill was about $140K but with insurance negotiated rate, they were paid about $25K. I hit my max OOO of about $8K last year. Fortunately, the city sells an ambulance plan for $99 a year and it covered my ambulance out of pocket cost.
Ouch. Well, that sounds like it worked out financially. I have never had out of network health care services, either. But it is listed on my plan at a much higher out of pocket, so I consider it my "worst case".
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Old 03-02-2024, 04:16 AM   #12
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Be careful about those worst case scenarios. Your out of pocket for out of network could be much higher, and some services might not be available in network. Plus you have balance billing on top of that which isn't limited by out of pocket max. Plus, you have all your in network out of pocket maximums separately. My out of network out of pocket is 463% of my in-network out of pocket, as an example.
Good points. We're choosing a PPO instead of HMO for the larger (and national) network, as well as not needing a PCP for specialist referrals. Balance billing is not included, and out-of-network out-of-pocket is unlimited.

But at least the PPO out-of-network is still covered, even though balance billing and unlimited OOP costs apply. With HMO, OON is not covered at all.
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Old 03-02-2024, 04:38 AM   #13
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*It's also possible that I'm missing some major factor and don't realize it.
Every county in the country has different plans and providers. I have over 50 to pick from. Some only have 2 or 3. Bronze, Silver, PPO, HMO, deductibles, etc., costs can vary quiet a lot just based on where you are and what options you have.
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Old 03-02-2024, 05:34 AM   #14
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The most you will pay in premiums is 8.5% of income for the Silver benchmark. The Silver benchmark is the second lowest cost Silver (SLCSP) plan in your county. If your income is so high that the SLCSP is less than 8.5% of income then you would get no subsidies.
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Old 03-02-2024, 05:50 AM   #15
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ACA is very location dependent and scale up with age too so comparing to others here will result in some pretty significant differences. I feel fortunate in my market and am happy with my plan and healthcare options would be a major consideration for me if I chose to move. WRT planning, I budgeted for "worst case" (hopefully I don't test that limit) for the full premium plus maxing out my HSA prior to considering myself FI but I manage MAGI to get the significant PTC. My current HSA balance would cover ~10 years of max OOP for me at this point and that's what it's there for.
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Old 03-02-2024, 05:59 AM   #16
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Thanks, FLSUnFIRE. What started me thinking about this is that rodi said, "Healthcare is not as expensive as some have suggested (someone said $10k/year.... We have a family of four (2 kids in college) and spend under that."

And I'm trying to figure out (this is new to me) what causes the variances. From what I'm seeing, the major factors are MAGI, age, # in household, and location.

[Edited to correct AGI to MAGI. Thanks, GenXguy!]]
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Old 03-02-2024, 06:35 AM   #17
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Watching this thread with interest. I have subsidized COBRA through mid-2025 ... then I'm on my own.
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Old 03-02-2024, 09:19 AM   #18
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Good points. We're choosing a PPO instead of HMO for the larger (and national) network, as well as not needing a PCP for specialist referrals. Balance billing is not included, and out-of-network out-of-pocket is unlimited.

But at least the PPO out-of-network is still covered, even though balance billing and unlimited OOP costs apply. With HMO, OON is not covered at all.
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Every county in the country has different plans and providers. I have over 50 to pick from. Some only have 2 or 3. Bronze, Silver, PPO, HMO, deductibles, etc., costs can vary quiet a lot just based on where you are and what options you have.
I have another option through my ACA marketplace plan.

POS
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With the Health Alliance Point of Service (POS) Individual plan, you receive two Policies under one Plan. You receive an HMO Policy that explains your in-network benefits and an Indemnity Policy that explains your out-of-network benefits.
My only other option to POS plans in the marketplace were PPO, there were no strictly HMO options.
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Old 03-02-2024, 09:21 AM   #19
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Thanks, FLSUnFIRE. What started me thinking about this is that rodi said, "Healthcare is not as expensive as some have suggested (someone said $10k/year.... We have a family of four (2 kids in college) and spend under that."

And I'm trying to figure out (this is new to me) what causes the variances. From what I'm seeing, the major factors are AGI, age, # in household, and location.
They use MAGI. But one thing that will be make a big difference is how much non-preventive health services you use. The deductibles and out of pocket can easily exceed subsidized premiums, even in network. And out of network, if needed, it can get ridiculously high.
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Old 03-02-2024, 10:15 AM   #20
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Yeah, health care can be extremely expensive.

I got a POS plan, which is an HMO and indemnity plan. Even looking at the PPO plans, health care can be very expensive if you need services which are not covered in network. I think I saw some out of network out of pocket maxes of like $45,000 for a couple or family, and that doesn't even include balance billing charges on top of that or other uncovered services and all your in-network deductible and out of pocket costs.

My max out of pocket for out of network for just me is $13,900, and that's on top of thousands of in-nework out of pocket max.
Remind me again what ACA stands for.
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