AP: With health law, workers ponder the I-Quit option

[pb4uski]

... I'd like to see the tie between work and insurance eliminated altogether.

+1 it was a dumb idea to begin with and as I understand it a response to some different government meddling.

 

[Chuckanut]

I know a number of people who retired early because they could finally get medical insurance. They had the financial resources to retire, but were afraid one illness would wipe them out.

My totaly empirical observation is that ACA has created a number of new jobs for younger workers. And I don't just mean the bureaucracy that administers the program.

 

[daylatedollarshort]

+1 it was a dumb idea to begin with and as I understand it a response to some different government meddling.

+2. It makes even less sense to lose your health insurance when you leave or lose a job as it would be to lose your car or homeowners insurance.

It dates back to a way employers used to try to get around World War II wage controls.

 

[Turn_the_Page]

I think it's a huge incentive. LOTS of people at my megacorp, burned out and ready to go. One poster is right, the managers are the ones that should be worried. They've eliminated so many positions, that losing one or two key people can really leave the dept in the lurch. Oh wait, they're managers, they won't worry about it

 

[scrabbler1]

I know when doing the iQuit, health insurance was the final piece of the puzzle. This was back in 2008 but I was healthy enough to get a private policy so it was see you later alligator to Megacorp.

While it wasn't the last piece of my ER puzzle back in 2008, it was one of the last. That policy's premiums jumped 50% in the next 2 years (2010 and 2011) so I had to drop it for a bare-bones policy which was not ACA-compliant. However, by the time I dropped it, the ACA had already been passed and signed into law so I knew this was a short-term move until the start of this year.

 

[ERhoosier]

If I wasn't expected to subsidize their insurance when they quit, I could care less. It's the quit/not get another job/ oh, yea, subsidize me for doing that that literally angers me. It's absurd.

+1

FIRE is fine, but something else for able-bodied non-FI to ER on someone else's hard-earned $$. As recent history proves, if too many in a society do that entire economies collapse.

 

[ERhoosier]

Although HIPAA was supposed to help, it didn't do much.....

Obviously not a real solution, but it did help significantly. I know way too many folks who truly were trapped in bad jobs until HIPAA. For the 1st time folks (or family members) with serious pre-existing conditions could switch to better jobs & employer HI plans without having to go uninsured during long waiting periods which were typical pre-HIPAA. Agree 100% that HIPAA did not solve hte big HI/HC cost issue.
But in fairness the situation ain't that different under ACA. The rich still can buy whatever care they want, and lower income folks have Medicaid &/or ACA subsidies. But millions of middle-class (or better) with MAGI's just a bit too hi for subsidies are still forced to continue w#rking to 65 & Medicare eligibility, or burn thru their hard-earned nest eggs. Consider a reasonably well-off 60 yo couple with significant chronic health conditions looking to ER from their small business with $2M nest egg. Seems like solidly FIRE territory with 3.5% SWR yielding them $70k in annual investment income. But HC costs remain basically unaffordable to these folks (i.e. total HC costs approaching half their net (after-tax) income).
According to fig's from KFF's subsidy calc for US ave: Silver Plan for 60yo non-smoking couple $13,800/yr (non-deductible) + $12,700/yr OOPmax (plus misc HC expenses not covered).

Neither HIPAA nor ACA tamed the 800# gorilla of astronomical & ever increasing overall HC costs.

 

[daylatedollarshort]

If I wasn't expected to subsidize their insurance when they quit, I could care less. It's the quit/not get another job/ oh, yea, subsidize me for doing that that literally angers me. It's absurd.

Before the ACA, our tax free, employer subsidized $300 a month health care premiums went to $2,300 a month for a post COBRA policy, after DH retired from his job.

I think it is absurd to have to work a W2 job we otherwise wouldn't need just to obtain affordable, employer subsidized health insurance. I think it is better for us to be out of the workforce and leave a job or two open for people who would otherwise be unemployed, and maybe keep them off unemployment benefits, Medicaid and food stamps.

 

[daylatedollarshort]

+1

FIRE is fine, but something else for able-bodied non-FI to ER on someone else's hard-earned $$. As recent history proves, if too many in a society do that entire economies collapse.

What recent history?

 

[Shawn]

I think it is funny when people who are against the ACA or maybe just against anything tied to the current President argue that this aspect of the law that lets people use the ACA to quit is "another" "bad" aspect of this law! They usually frame it as making people lazy, reducing employment, noting reduced number of workers, etc.
I don't get it- if I were an employer whom would I want working for me- people who want to be working there or people who only remain working there because they have to in order to have health insurance? Which group is likely to be the better employees? Is a fearful dependent employee really better than a satisfied employee? Isn't this ability to separate health insurance from employment an example of "if you love someone, set them free, etc....?"

Huh? Employers do not need to retain under achieving employees. This includes poor performers who "hang around just for the health benefits." Depending on the situation, employees who do not offer sufficient value to the employer are more likely to be let go during layoffs or they are fired. Likewise, employers compensate for lower performance via salary differentials. Employers, at least those in the private sector, do not need the ACA to "set employees free." Employers have no trouble setting employees free on their own. Employers regularly terminate the employment of millions of people every year.

Most laws, even controversial ones, have positive aspects and negative aspects. If the ACA is motivating a significant number of individuals to voluntarily leave the workforce, this is not a positive aspect of the law. While it may be good for individuals, it is not good for society at large. It lowers productivity. It is clearly not good for businesses that would otherwise choose to keep these people on the company payroll because they offer something of value (i.e., human capital). If encouraging people to leave the workforce is such a good idea then the social security retirement age should be lowered to 60.

 

[M Paquette]

Summary: Health insurance shall be allocated only to productive labor units. Unproductive labor units shouldn't have health insurance. In fact, unproductive labor units should probably be sold to the Soylent Corporation for effective repurposing, salvage, or reclamation.

That seems to be the general drift I'm getting from the punditverse.

 

[scrabbler1]

If I wasn't expected to subsidize their insurance when they quit, I could care less. It's the quit/not get another job/ oh, yea, subsidize me for doing that that literally angers me. It's absurd.

But remember that workers in employer-based plans are not taxed on the employer subsidy portion of the premium, so they are also getting a government subsidy but in an indirect manner. The ACA subsidies merely try to even out this inequity.

 

[daylatedollarshort]

Summary: Health insurance shall be allocated only to productive labor units. Unproductive labor units shouldn't have health insurance. In fact, unproductive labor units should probably be sold to the Soylent Corporation for effective repurposing, salvage, or reclamation.

That seems to be the general drift I'm getting from the punditverse.

The Congressional Budget Office director has said the ACA will reduce unemployment -

CBO director: Obamacare will reduce unemployment

I am not sure how that is getting spun into a bad thing.

 

[razztazz]

The Congressional Budget Office director has said the ACA will reduce unemployment -

CBO director: Obamacare will reduce unemployment

I am not sure how that is getting spun into a bad thing.

Works against the Cheap Labor principle

 

[ERhoosier]

What recent history?

Greece is an economic basket case after decades of overly generous spending on social benefit programs the nation could not afford. It's an economy remaining afloat only via EU bailouts. Even Sweden, the historical bastion of social welfare, pulled back after overall public spending ht 70+% of GDP.

I'm not saying all subsidies in ACA are bad, but to the extent they DIScourage productivity they risk harming the economy. The overall standard of living, inc HC spending/benefits, of any country ultimately depends on per capita GDP. A directed HI tax credit to individuals, NOT their employers, would sever the HI/j#b link & let folks pursue vocations/interests they enjoy. Inc. PT, FT, or OT w#rk without affecting their HI arrangement. Happy w#rkers tend to be more productive, and many successful small (& not so small) businesses started out as hobbies.

 

[daylatedollarshort]

Greece is an economic basket case after decades of overly generous spending on social benefit programs the nation could not afford. It's an economy remaining afloat only via EU bailouts. Even Sweden, the historical bastion of social welfare, pulled back after overall public spending ht 70+% of GDP.

I'm not saying all subsidies in ACA are bad, but to the extent they DIScourage productivity they risk harming the economy. The overall standard of living, inc HC spending/benefits, of any country ultimately depends on per capita GDP. A directed HI tax credit to individuals, NOT their employers, would sever the HI/j#b link & let folks pursue vocations/interests they enjoy. Inc. PT, FT, or OT w#rk without affecting their HI arrangement. Happy w#rkers tend to be more productive, and many successful small (& not so small) businesses started out as hobbies.

Most of the developed countries, except the U.S., all have some form of universal health care, and their economies aren't all like Greece.

Here's a Map of the Countries That Provide Universal Health Care (America's Still Not on It) - Max Fisher - The Atlantic

Many countries with universal health care and strong social support systems in rank high in terms of GDPs, some higher than the U.S. -

List of countries by GDP (PPP) per capita - Wikipedia, the free encyclopedia

Don't all other countries in the E.U. have some form of universal health care? And most of them do not have the same economic issues as Greece?

I agree with you on severing the job / health insurance link completely. The ACA helps many people who post here who have mom and pop businesses, are stay at home parents, or early retires able to live off pensions / investments / rental income / part time work. I don't see us all as a bunch of slackers and drags on the economy. I never thought of myself as an unproductive slacker when I was a stay at home mom.

 

[Blazerdude20]

The Iquit resulting from ACA is also a boon for the younger people entering the workforce. Many companies don't want to put the money out to train new people, if the old people retire then they have no choice but to train. This could very well be the biggest ACA benefit to our economy 20 years from now

 

[ERhoosier]

Most of the developed countries, except the U.S., all have some form of universal health care, and their economies aren't all like Greece.

Here's a Map of the Countries That Provide Universal Health Care (America's Still Not on It) - Max Fisher - The Atlantic

Many countries with universal health care and strong social support systems in rank high in terms of GDPs, some higher than the U.S. -

List of countries by GDP (PPP) per capita - Wikipedia, the free encyclopedia

Don't all other countries in the E.U. have some form of universal health care? And most of them do not have the same economic issues as Greece?

I agree with you on severing the job / health insurance link completely. The ACA helps many people who post here who have mom and pop businesses, are stay at home parents, or early retires able to live off pensions / investments / rental income / part time work. I don't see us all as a bunch of slackers and drags on the economy. I never thought of myself as an unproductive slacker when I was a stay at home mom.

I only said there are practical limits to overall COSTS relative to per capita GDP. I made NO comment either opposing "universal access to care" nor saying that it was incompatible with a reasonably strong economy.
BTW- According to WHO reports, "universal access" in many countries is not so universal in practice. Benefits are not unlimited, and most HC systems are under increasing economic stress. Co-pays ("user charges")are now common, inc in France for some services. Care delays and "service dilution" tend to be increasing, which WHO notes are mechanisms of "implicit rationing".
http://www.euro.who.int/__data/assets/pdf_file/0009/170865/e96643.pdf
In Greece the chronically unemployed can lose HI, and many "eligible" for care simply cannot afford the hi co-pays.
http://www.bbc.com/news/business-17067104
OTOH- I find it interesting that in practice, the much praised French HC system is surprisingly similar to US (mix of gov't & private insurance with private pay option).
http://www.theatlantic.com/business/archive/2012/03/france-and-us-health-care-twins-separated-at-birth/254033/
Bottom line is that there's no free lunch in HC, and no nation claims to have a perfect HC system. Cost is #1 problem worldwide, and clearly most acute in US.

BTW- I have no problem with stay-at-home moms (or dads). Raising children is important work, and for many families this is a most practical & economically sensible arrangement. Nor are truly FI ER's a "drag on the economy". Their investment/spending of accumulated assets & volunteering efforts (formal & informal) can contribute significantly to fabric of society. IMHO- FIRE is like saving up for a (hopefully very long) vacation. It can be a good thing for those who want it & can afford it ($$ & mentally).... but not so good if means using someone else's credit card to pay for it.

 

[JOHNNIE36]

Our lady house cleaner was here yesterday and told us a story about how the ADA has affected her. She takes some special kind of medicine and her insurance company sent a letter saying it was no longer covered. However, there was a new plan she could opt to have, an ACA plan that would then cover her medicine. The plan premium was $460/mo. She said it was twice what she was paying and had made a decision. She'll be 62 in two years so she has decided to drop the insurance and pay the fine/penalty for those two years. I don't quite understand all this and glad I'm not involved in Obamacare. However, if I was involved, it would mean that I was a lot younger and that would be a good tradeoff.

 

[meierlde]

But remember that workers in employer-based plans are not taxed on the employer subsidy portion of the premium, so they are also getting a government subsidy but in an indirect manner. The ACA subsidies merely try to even out this inequity.

Also in many corporations they have a plan that allows employee contributions to be taken out of the paycheck before tax so that in that case the total cost of the HI is taxfree. It is often called a benefit cost reduction plan. This is not often discussed, but works only with wages, you can't do it till above 10% medical costs if paying with other money.

 

[scrabbler1]

Also in many corporations they have a plan that allows employee contributions to be taken out of the paycheck before tax so that in that case the total cost of the HI is taxfree. It is often called a benefit cost reduction plan. This is not often discussed, but works only with wages, you can't do it till above 10% medical costs if paying with other money.

Yup. Back in my working days, I was able to use pretax dollars to pay for my share of the premiums starting in 1990 or so.

I have complained a few times in this forum about the unequal tax treatment of health insurance premiums, from the (1) non-taxation of the employer portion to the (2) use of pretax dollars to pay for premiums to the (3) use of after-tax dollars to pay for premiums. When I was in a group plan, it was a combination of (1) and (2) but as an early retiree it became at best a combination of (2) and (3), sometimes only (3) because of the increase to 10% of AGI the amount of premium excluded.

 

[Mulligan]

Our lady house cleaner was here yesterday and told us a story about how the ADA has affected her. She takes some special kind of medicine and her insurance company sent a letter saying it was no longer covered. However, there was a new plan she could opt to have, an ACA plan that would then cover her medicine. The plan premium was $460/mo. She said it was twice what she was paying and had made a decision. She'll be 62 in two years so she has decided to drop the insurance and pay the fine/penalty for those two years. I don't quite understand all this and glad I'm not involved in Obamacare. However, if I was involved, it would mean that I was a lot younger and that would be a good tradeoff.

I don't think she will have to pay the fine, now. Regs have been changed and now all she has to do is state the ACA cost more than previous plan or is unaffordable and she is exempted from the penalty.


Sent from my iPad using Tapatalk

 

[AllDone]

And the fact that the younger, healthy generation is not signing up will ultimatley drive the cost of the ACA upwards over the coming years. It's great that individuals with pre-existing conditions can now get insurance, but what happens in the future when it becomes unaffordable? And wasn't the biggest reason Obama's plan was enacted so that the 30-45 million (depending on who you ask) unisured in this country could get AFFORDABLE healthcare? Guess that's not working!

We don't actually know yet the age mix or totals that will have signed up by the March 31 deadline. In my state (the big one!), young people were running slightly ahead of predictions as of the end of last month. The Kaiser Family Foundation also does not believe that a low rate of sign up by the younger demographic will have a significant effect on rates:

The Numbers Behind “Young Invincibles” and the Affordable Care Act | The Henry J. Kaiser Family Foundation

We also have the example of Massachusetts and Switzerland on whose HI systems the ACA was based. Switzerland has the second highest per capita cost of healthcare behind only the US, but it does have universal healthcare provided by private insurance companies. Obviously, there are more efficient solutions, but the current political climate is unlikely to permit transition to a better approach. Like a majority of primary care docs, I'm pro-single payer myself, even if it is an 80/20 system like France as ERHoosier has pointed out.

 

[Alan]

Yup. Back in my working days, I was able to use pretax dollars to pay for my share of the premiums starting in 1990 or so.

I have complained a few times in this forum about the unequal tax treatment of health insurance premiums, from the (1) non-taxation of the employer portion to the (2) use of pretax dollars to pay for premiums to the (3) use of after-tax dollars to pay for premiums. When I was in a group plan, it was a combination of (1) and (2) but as an early retiree it became at best a combination of (2) and (3), sometimes only (3) because of the increase to 10% of AGI the amount of premium excluded.

+1

I also had access to an FSA which enabled prescription drugs, OTC drugs, eye tests and spectacles etc to paid with before tax $.

My retiree group insurance is from the same employer but is now paid with after tax $, no FSA available, and because it is a low deductible plan is not eligible for an HSA.

 

[ejman]

The prior health care insurance environment almost derailed my ER back in 2003. I thought that since a reasonable WD( less than 4%) rate from my NW had my financial requirements covered I was ready for ER.

It never occurred to me that a history of (controlled) high BP in my case and carpal tunnel in my wife's case would mean that I couldn't find individual health insurance AT ANY PRICE based on our preexisting conditions. The only way I was able to get insurance was to create a home business and then get a group plan (for two people!). I am so glad that our current health insurance environment came into being! Hopefully no future ER person will have to go thru the year of miserable anxiety re health insurance we had to live back then.