Obamacare Cliff

[Mulligan]

And employer provided insurance, with one cost for young and old doesn't do an even better job of that?

Now don't be bringing up employer provided insurance, Animorph, or I will have to get back on my soapbox and complain about why the company and worker get the insurance benefit tax free, and I have to pay with after tax dollars!

 

[brewer12345]

I am beginning to detect a distinct aroma of pork.

 

[killingme]

I saw this and thought it , if you ignore the title, both entertaining and intriguing as it does highlight the absurdity of health care cost in the US. His First 4 Sentences Are Interesting. The 5th Blew My Mind. And Made Me A Little Sick.

 

[daylatedollarshort]

I saw this and thought it , if you ignore the title, both entertaining and intriguing as it does highlight the absurdity of health care cost in the US. His First 4 Sentences Are Interesting. The 5th Blew My Mind. And Made Me A Little Sick.

Excellent points. Thanks for posting that.

 

[M Paquette]

It seems to me obscene that a couple earning a little over 400% FPL would be expected to spend 20% or more of their earnings for health insurance. If they had health issues with deductibles and copays it would be even more.

Obscene? Welcome to my life...

Medical Expenses as a Percentage of Gross Income in Retirement:
2012 25.1%
2011 20.2%
2010 27.0%
2009 29.5%

Being retired ain't cheap. MAGI was above 400% of the Federal Poverty Level for 2009-2011. We were under by about $650 for 2012.

 

[Mulligan]

Obscene? Welcome to my life...

Medical Expenses as a Percentage of Gross Income in Retirement:
2012 25.1%
2011 20.2%
2010 27.0%
2009 29.5%

Being retired ain't cheap. MAGI was above 400% of the Federal Poverty Level for 2009-2011. We were under by about $650 for 2012.

Ouch! My deepest sympathy,M. Granted my income is way above the 400% threshold for a single, but still 25% of my gross would put me back in the workforce, yesterday. Underwritten, high deductible plan with HSA deduction, low premium, and no healthcare costs other than dental cleanings have kept mine below 0% of my gross income the past 4 years. I will get one more year of it, then the party is over for me.

 

[Malcolm2]

The reason I suggested that the subsidies are merely a different form of cost shifting is because the subsidies are funded by taxpayers so it ends up being those with higher incomes (who don't get a subsidy but pay the taxes that provide for the subsidy) subsidizing those with lower incomes (who get the subsidy but pay little in taxes).

So at the end of the day the poor pay less than the actual cost of providing their care and the rich pay more than the actual cost of providing for their care. It seems like cost shifting to me.

Of course you are correct. A subsidy is clearly an entitlement. Websters defines an entitlement as "a type of financial help provided by the government for members of a particular group." Entitlement - Definition and More from the Free Merriam-Webster Dictionary
The question is will there be enough payers for those getting a subsidy/entitlement.

I have yet to talk to one 26 year old college graduate with a job with no healthcare that plans to sign up after looking at the rates (student loans, and all other priorities), and I have talked to more than a few. I would be interested to know if any of you have family/friends/co-workers etc. in this category, in case I have a sampling error.

 

[pb4uski]

...I have yet to talk to one 26 year old college graduate with a job with no healthcare that plans to sign up after looking at the rates, and I have talked to more than a few. I would be interested to know if any of you have family/friends in this category, in case I have a sampling error.

DS will be 26 next month. His health insurance would be $346 for a bronze plan and $417 for a silver plan before subsidy but would be $14 and $84 respectively after the subsidy based on his income. However, he recently started a new job that currently offers health insurance to its employees after a probationary period so he will be on that if they retain the current plan.

Still waiting to hear what his new employer will do for 2014. I will insist that he get/keep health insurance and get the subsidy if his new employer doesn't provide it. i don't want to be in a position where he need medical care and is uninsured and I end up getting stuck with the bill.

 

[Sue J]

I have yet to talk to one 26 year old college graduate with a job with no healthcare that plans to sign up after looking at the rates (student loans, and all other priorities), and I have talked to more than a few. I would be interested to know if any of you have family/friends/co-workers etc. in this category, in case I have a sampling error.

Our younger son will be 27 in January 2014. He was on our insurance until last January when he turned 26, reimbursing us for his $40/mo premium. He has a college degree and is self employed. He went without insurance in 2013 and is planning on using Obamacare in 2014. Looking at the info so far he can easily afford a bronze plan or a catastrophic plan.

He has no student loans, no debt at all. His priorities are working and saving, not playing and partying. I'll admit he's not typical in this respect.

 

[ziggy29]

He has no student loans, no debt at all. His priorities are working and saving, not playing and partying. I'll admit he's not typical in this respect.

If it makes him feel better about his choices, I was the same way as a 20-something -- always saving and investing, for a down payment, for paying cash on a car, for retirement. And that is *the* reason why I could get laid off at 47 and feel like I could consider myself retired.

 

[check6]

Now don't be bringing up employer provided insurance, Animorph, or I will have to get back on my soapbox and complain about why the company and worker get the insurance benefit tax free, and I have to pay with after tax dollars!

Perhaps that worker (group) negotiated for a better health insurance plan in lieu of higher wages. Apples to oranges.

 

[No_Such_Reality]

Obscene? Welcome to my life...

Medical Expenses as a Percentage of Gross Income in Retirement:
2012 25.1%
2011 20.2%
2010 27.0%
2009 29.5%

Being retired ain't cheap. MAGI was above 400% of the Federal Poverty Level for 2009-2011. We were under by about $650 for 2012.

Sorry to hear that. The cliff is a little more perverse. At 400% FPL, in your late 50s early 60s, the health coverage premiums alone jump to 26% of your income.

Add in any actual illness that pushes you to the OOPM, and you're looking at 45% of gross income.

Even being under 400%FPL, an actual illness will push you towards 30% as you approach OOPM.

Retirement is cheap, being sick isn't.

 

[brett]

I think that the much bigger issue is that the US is well on the way to a spend of 18 percent of GDP on health care with absolutely NO appreciable differences in outcomes to those the rest of the industrialized western countries that that consistently sprend 12 percent.

This will put the US at a competitive disadvantage.

This is a real issue that the politicians seem unwilling to address

 

[meierlde]

Sorry to hear that. The cliff is a little more perverse. At 400% FPL, in your late 50s early 60s, the health coverage premiums alone jump to 26% of your income.

Add in any actual illness that pushes you to the OOPM, and you're looking at 45% of gross income.

Even being under 400%FPL, an actual illness will push you towards 30% as you approach OOPM.

Retirement is cheap, being sick isn't.

Even with the deduction changes then all of the premiums above 10% of AGI would be deductable, (above the 10% limit). Also if you have an LTC policy that can add to the total. So the question would become what other deductions you have, and if enough than at least a part of your premium would be effectivly tax protected. The simple fix is to add the employeer contributions, and the employee contributions where a benefit cost reduction plan is in place back into the gross pay, and allow above a 10% deduction.

 

[No_Such_Reality]

At that level would the premiums be tax deductible when itemized on schedule A ? I believe the threshold is now 10% for medical . I haven't run the numbers, just thinking if that might lessen the impact ( maybe that was part of 9.5% income cap for subsidy )

And yes the cost of basic medical care is beyond the reach of most working folk with out the aid of insurance.

Unless you're still carrying large interest payment on a mortgage, you'd need $11,900 over the medical base (7.5% in 2012, 10% in 2013)

So a family of four, making $94,200 (400% FPL), would need $21,320 in medical expenses before breaking even against the standard deduction. Or some other combination of other deductions exceeding $11,900 and then more than $9420 in medical expenses.

For someone in the income range in a family of four, the tax rate is 15%. So basically, 15% of the amount over $10000 is what you get back if you've got $11,900 in other deductions. i.e $20K in medical bills with $12,000 of other itemized deductions will get you $1500 back on your taxes.

 

[madbrain]

Covered California now includes a calculator with actual provider quotes in my zip code area. I get 4 provider quotes. I am not retired yet, so I will be just watching how this unfolds very closely.

Actually, Covered CA should show about 6 quotes.
But the site is very poorly done.

If you move the mouse over, you will see arrows on the left and right, which you can click, and additional options will show.

It took me a while to figure this out, as I was looking for the Kaiser option which was not showing in the first 4 .