Poll: Who's going to try to get ACA subsidies by staying under the threshold?

[explanade]

So the ACA cliff has garnered a lot of discussion.

Since a lot of people here are able to manage their ER income by deciding how much to withdraw, it seems there would be the temptation to save thousands by keeping income below the threshold.

 

[ER Eddie]

What are the thresholds? Sorry, I haven't been paying attention to the discussion.

 

[REWahoo]

What are the thresholds? Sorry, I haven't been paying attention to the discussion.

http://www.early-retirement.org/forums/f38/obamacare-65057-11.html#post1303138

 

[W2R]

I don't understand the PPACA very well. Sure, most people can say that, but I really mean it!

Anyway, in 2014 Medicare will be my primary insurer, and group employee/retiree insurance will be my secondary insurer. So, very tentatively speaking, I don't think Obamacare and the subsidies were meant for people in my situation.

Even if they were, I have no plans to try to reduce my AGI somehow to pull it below the $44,680 threshold (for a single person) in order to qualify for a subsidy in 2014. To be honest, I don't see how I could do that.

 

[gerrym51]

I don't understand the PPACA very well. Sure, most people can say that, but I really mean it!

Anyway, in 2014 Medicare will be my primary insurer, and group employee/retiree insurance will be my secondary insurer. So, very tentatively speaking, I don't think Obamacare and the subsidies were meant for people in my situation.

Even if they were, I have no plans to try to reduce my AGI somehow to pull it below the $44,680 threshold (for a single person) in order to qualify for a subsidy in 2014. To be honest, I don't see how I could do that.

if your on medicare-forget about ACA. does not apply

 

[ER Eddie]

http://www.early-retirement.org/forums/f38/obamacare-65057-11.html#post1303138

Thanks.

I don't expect my income to be above 25K or so, so it looks like I'll qualify for the subsidy. That's good news, though I don't know that I'll use the ACA. I'll have retiree healthcare through my employer, so it'll be a matter of comparing the two options.

 

[W2R]

if your on medicare-forget about ACA. does not apply

Oh good! That is what I thought or at least hoped. Those tables only go to age 64 anyway, and in 2014 I will be 65-66 years old. So, I voted "Don't plan to use ACA plan, have alternative health care"

 

[FIREd]

Assuming there will be no difference in the quality of care received by people who are subsidized (and it looks like there won't be), then yes, I will do my best to keep my income below the threshold.

 

[bondi688]

Even if they were, I have no plans to try to reduce my AGI somehow to pull it below the $44,680 threshold (for a single person) in order to qualify for a subsidy in 2014. To be honest, I don't see how I could do that.

Just curious. When you say you do not think you can do that, is it because you need more than $ 44680 for your annual expense, or you cannot do that to qualify for the subsidy because of philosophical reason?

 

[pb4uski]

It is interesting how things have changed over time. When I was planning to retire I planned to do Roth conversions and stay within the 15% tax bracket. Given HSA contributions, home mortgage interest, charitable contributions, etc. that would have been limiting my income to ~$96k a year.

Now with ACA, I'll be reducing my income to 400% FPL (~$62k a year). If I stayed at ~$96k a year the additional $34k would cost me ~$23k (~$5k in federal income tax @ 15% + ~$15k in lost Obamacare subsidy + ~$1k in state income tax + ~$2k in lost state property tax relief) an effective cost of 68%!!

Now I'll probably defer my pension and SS until after I am under Medicare.

 

[bondi688]

pb4uski.
Think of that is involuntary LBYM.

 

[daylatedollarshort]

I think the subsidies are an additional incentive to move to a low cost of living area, since the income limits are the same no matter where you live. The lower a household's annual expenses, the less income is needed to cover them.

 

[REWahoo]

I think this changes the equation on the "pay off the mortgage early" discussions. No mortgage = lower income needs = greater opportunity for subsidy.

 

[sunnysideup]

If I retire when I plan to in another year, I will have 7 gap years till Medicare kicks in. If things go well and DH continues to work for the next 3 years, he will cover me for medical and I may only have 5 gap years.

My ex employer had an Aetna plan for retirees that is not subsidized, but seemed reasonable for the coverage. When the day arrives, I will look at compare that with the ACA and see which is better for me at that time.

SO, in the event that I may use the ACA for several years, I am planning to keep my income low enough to get a subsidy of some amount and am making sure I have adequate cash reserves to get through those years.

How can I pass up a discount when I have enough time to plan for it?

 

[retire2020]

I'm planning to be on obamacare In future. We will be family of 5 until my daughter finishes her college in 2022 and then family of 4 until 2030...that means i will keep MAGI below 110K initially and then 92K after 2022. Kids upto 26 can stay on parents plan provided they're in college and hoping my kids get into medical college which takes 8 yrs to complete.

 

[FIREd]

I think the subsidies are an additional incentive to move to a low cost of living area, since the income limits are the same no matter where you live. The lower a household's annual expenses, the less income is needed to cover them.

I agree. It's a lot more manageable to stay under the threshold if you live in the South than if you live on the West Coast. So it sounds like those who already pay a lot (for taxes, RE, etc...) will end up paying even more (less likely to be subsidized).

This discussion comes at the right time. The tenants in my Ala. house have made an offer to purchase it. Now I'm not so sure I should sell. We can live very comfortably on less than $60K there.

 

[MichaelB]

Oh good! That is what I thought or at least hoped. Those tables only go to age 64 anyway, and in 2014 I will be 65-66 years old. So, I voted "Don't plan to use ACA plan, have alternative health care"

There are 24 provisions of the PPACA that are directly related to Medicare. Some affect service providers and not consumers, but others are very much of interest to members. Examples are medica advantage plan subsidies and pricing, the drug plan coverage gap, and premiums for higher earning retired people. KFF has an easy to real drop down window to see all the changes here Implementation Timeline - Kaiser Health Reform

 

[HFWR]

Assuming Megaconglomocorp doesn't [-]screw me out of it[/-] alter it, I'll have retiree, subsidized HI.

Plus, I won't need to work very hard at all to stay under the AGI threshold...

 

[explanade]

What about those who withdraw enough for 3 years of expenses?

So one year with big income and then the next two years, nothing.

Can it be that easy to determine your income so that you get the subsidy?

 

[obgyn65]

This Is a good idea. I like it. Thanks for sharing.

What about those who withdraw enough for 3 years of expenses?

 

[bondi688]

What about those who withdraw enough for 3 years of expenses?

So one year with big income and then the next two years, nothing.

Can it be that easy to determine your income so that you get the subsidy?

I suppose that is the solution if the amount each year that would qualify you for the subsidy is not enough to see you through the year.

 

[MichaelB]

I didn't answer the poll because it didn't include my option. We definitely will use the state health exchange to get our policies, and I will manage the portfolio the same way I have done 'till now, no change. If we qualify for a subsidy we will take it, but it will not be part of our portfolio planning.

 

[dm]

I wonder if you can file "Married filing separately", with one spouse getting the subsidy and one not?

 

[MichaelB]

I wonder if you can file "Married filing separately", with one spouse getting the subsidy and one not?

Subsidy is based on household income.

 

[mickeyd]

Since I'm on the Medicare/Tricare teat, I suppose that I will only be paying higher taxes so that others may become covered by the plan.