Will the new healthcare law make it easier for me to retire early?

[MichaelB]

My children and their friends – all late 20’s and early 30’s – are very supportive and see this not as a cost but as a fairness issue.

People on this board are asset gatherers – we are older, more focused on accumulating and preserving that most. Young people have much less and are more focused on earning.

The problem with all these online calculators is that they only focus on single individuals or families of 4. I've not seen any that reflect other household situations. Would love to see a link if anyone has seen any such beast.

I would imagine we will see more detailed calculators and other aids now that the final (well, almost final) version has been passed. Same for things like income definition for subsidy, etc. My bet's on MAGI. It’ll take a month for the bureaucrats to break down the law, assign it to respective gov’t agencies and write the specific language needed to answer some of the questions here.

 

[MichaelB]

I went to the first link.... and WOW.... what a typo!!!! (I added the color...)


"The Congressional Budget Office estimates that the legislation will reduce the number of uninsured by 32 million in 2019 at a net cost of $938 over ten years, while reducing the deficit by $124 billion during this time period."

What a difference one word makes! Looks like you get the prize for actually reading the thing.

 

[donheff]

The most important previous cost containment mechanism on that health care spending will be gone. In the past, medical spending was "bounded" (however ineffectively) by consumers electing not to buy the product. With heavily subsidized third-party payers (private insurance companies), there will be much less of this. The insurance companies will have absolutely no incentive to reduce medical spending overall--their 20% "share" is now locked in, and every company will get the same 20%. Instead of a supply/demand based check on medical costs, we'll be substituting government cost controls. That might work, or it might not (history has an answer on this), but we should be aware that we are consciously abandoning whatever market-derived price moderation there was in favor of rulemaking and regulations-based controls.

Again, maybe it will work really well and people will love it. I hope it does!

I don't buy that argument. It is tantamount to saying the free market doesn't work. Everybody has to buy food but Giant and Safeway are competing down to fractions of a penny. The same can be said for lots of things. A larger market and a requirement to post your balance sheets won't stifle the market. The companies will have as much motivation to attract customers as ever but they won't be able to use the same set of reprehensible tactics they use now to trick people into signing up (e.g. searching for technical falsehoods in application but only exercising them when a big claim is filed). Granted, they will find other ways to game the system but that is part of a free market too.

 

[donheff]

I recently started posted in the Politics and Religion section of a computer games industry forum. ..
The games industry forum is made of primarily of 20 or 30 something who are involved as programmers, designers, and founders of computer/video game companies ...Compared to this forum they are far more liberal and supportive of the bill.

I guess the good news is they really like the bill.

That surprises me. Slashdot sounds like the same demographic and it is chock full of libertarians. Maybe they can see the dangerous crap shoot they are in without robust health insurance. I would not want to be a free lance contractor, left to my own devices and never sure whether my carrier might dig out some reason to rescind.

 

[donheff]

I went to the first link.... and WOW.... what a typo!!!! (I added the color...)


"The Congressional Budget Office estimates that the legislation will reduce the number of uninsured by 32 million in 2019 at a net cost of $938 over ten years, while reducing the deficit by $124 billion during this time period."

I can't follow this back to the lead-in post. What is the typo? This bill has always been portrayed as costing close to $1T in the first decade. Thus the regular contrast with the Bush $1T tax cut deficit that non of the health care deficit hawks seems to get crazy about. The $1.2T savings allegedly comes in the second decade as cost cutting impact takes hold.

 

[MichaelB]

I can't follow this back to the lead-in post. What is the typo? This bill has always been portrayed as costing close to $1T in the first decade. Thus the regular contrast with the Bush $1T tax cut deficit that non of the health care deficit hawks seems to get crazy about. The $1.2T savings allegedly comes in the second decade as cost cutting impact takes hold.

The links were updated by KFF with new summaries. Texas Proud found one of the summaries had omitted the word "Billions" in a sentence about the cost of the program. I suspect few people came to the wrong conclusion about the total cost...

 

[MichaelB]

There is an updated summary here http://www.kff.org/healthreform/upload/housesenatebill_final.pdf

It still compares the law with the senate and house versions - not sure why - but it is more detailed and written to be understood.

 

[rescueme]

Well, the way our legal system works, you can call anything unconstitutional and attempt to sue based on that. Health insurance is actually already mandated in a number of states by state law, and most states have some form of mandatory insurance (such as auto), so...I wouldn't jump to the conclusion it is likely unconstitutional just because it is mandatory, that is quite a reach.

The exception being that driving is a privlige - not a right. You don't have to drive (if you have alternative means, such as living in a city with good public transportation).

However, this is a bit different (that's all I'll say )...

 

[ERD50]

I can't follow this back to the lead-in post. What is the typo? This bill has always been portrayed as costing close to $1T in the first decade.

I see the answer has been provided and the text corrected for this, but on your other comment... (underline mine):

Thus the regular contrast with the Bush $1T tax cut deficit that non of the health care deficit hawks seems to get crazy about.

Maybe because this is 2010, not 2003? I know many conservatives who voiced disapproval of the cut-and-spend approach of that admin. George Will conservative enough for you?

A Questionable Kind Of Conservatism (washingtonpost.com)

It is just FYI, I'm not going to pull out any quotes as they are not relevant to this thread. But you might find it interesting reading. Now, back to:


Will the new healthcare law make it easier for me to retire early?

-ERD50

 

[MichaelB]

And I thought this was gonna be the first health-care threat without delving into partisan politics. Shows you what I know ...

 

[FinanceDude]

Nope, quite the opposite. I am very personally acquainted with Avastin and how such modern cancer drugs are priced.

Audrey

Then your comment makes no sense..............

 

[FinanceDude]

I can't follow this back to the lead-in post. What is the typo? This bill has always been portrayed as costing close to $1T in the first decade. Thus the regular contrast with the Bush $1T tax cut deficit that non of the health care deficit hawks seems to get crazy about. The $1.2T savings allegedly comes in the second decade as cost cutting impact takes hold.

So, it cost almost a trillion in the first decade, and supposedly saves $1 trillion in the next decade. Taking that at face value, there's no real saving and deficit reduction at all, correct?

 

[donheff]

So, it cost almost a trillion in the first decade, and supposedly saves $1 trillion in the next decade. Taking that at face value, there's no real saving and deficit reduction at all, correct?

So, by that reasoning we have covered 30 million people and killed off pre-existing conditions and rescissions for nothing-- pretty good result
It's actually $1.2T so there is some projected savings. But, like many who oppose the bill, I expect that it will cost significantly more when the dust settles. Nevertheless, covering 30+ million is worth some investment.

 

[walkinwood]

Does anyone happen to know if a conversion to a Roth IRA is currently considered to be income for the purposes of Medicaid or other government benefits? I've googled on this for almost an hour now and can't find anything.

I have seen references to AGI as the determining factor for government benefits. Roth Transfers do figure into AGI, so my guess is yes - transfers will be treated as income.

This should not be surprising since you are paying income taxes on T-IRA to ROTH-IRA transfers.

 

[huusom]

Asset test and Medicaid

Hi all:

I did more research and and found out that most states do not have asset test for Medicaid and CHIP eligibility. California for example do not asset test.

Can anyone confirm this?

 

[FinanceDude]

So, by that reasoning we have covered 30 million people and killed off pre-existing conditions and rescissions for nothing-- pretty good result
It's actually $1.2T so there is some projected savings. But, like many who oppose the bill, I expect that it will cost significantly more when the dust settles. Nevertheless, covering 30+ million is worth some investment.

Even the CBO can't provide a good estimate because the cost of the "fixes" during reconciliation will undoutedly raise the number. I heard yesterday one of the "fixes" was to allow pre-existing conditions for CHILDREN, apparently the House bill only had pre-existing conditions for adults?? Talk about confusing.....

I wish President Obama and everyone would NOT talk about COST SAVINGS because it looks like there won't be any.......

Does the bill say what the basis of coverage is, whether you have to be an American citizen or anyone can get it?

 

[FUEGO]

Will the new healthcare law make it easier for me to retire early?

Back on topic!

I was thinking this could help those wanting to semi-FIRE by going part time at their current employer or finding a new part time gig. Your income may drop down low enough such that you get subsidized health insurance for cheap, and you can tell your employer that they don't need to provide health insurance for you.

From a cost perspective, an employer would not want to pay for a whole health insurance policy for someone working 20 hrs a week as much as they would someone working 40+ hrs per week because, on a per hour basis, the employer is paying more for the part time employee's health insurance (at least from my consulting firm's eyes).

But then I recall there is a provision in the bill that penalizes employers if an employee doesn't receive company coverage and gets subsidized coverage. So maybe it isn't realistic to expect to walk into an employer and proudly proclaim "you can save money on me as a part time employee because I don't care if you give me health insurance". Unless the employer is a small company under 50 employees.

I can foresee a lot of gamesmanship with employers trying to be flexible with employees and their health insurance choices, while trying to get employees to not make choices that stick the employer with a big tax penalty/fine. Maybe the 1099 contractor will become a more favored employment relationship vs the standard W2 employment.

 

[FinanceDude]

Maybe the 1099 contractor will become a more favored employment relationship vs the standard W2 employment.

I have been a 1099 employee for some time now, and it IS the best way to go...........

 

[Texas Proud]

I can't follow this back to the lead-in post. What is the typo? This bill has always been portrayed as costing close to $1T in the first decade. Thus the regular contrast with the Bush $1T tax cut deficit that non of the health care deficit hawks seems to get crazy about. The $1.2T savings allegedly comes in the second decade as cost cutting impact takes hold.

The article said $938 DOLLARS... not BILLIONS OF DOLLARS...

 

[mh]

Note: here's a simple subsidy calculator on kaiser's web site...

Health Reform Subsidy Calculator -- Premium Assistance for Coverage in Exchanges/Gateways

 

[MichaelB]

Does the bill say what the basis of coverage is, whether you have to be an American citizen or anyone can get it?

Repeated references to American citizen or legal resident.

I did more research and and found out that most states do not have asset test for Medicaid and CHIP eligibility. California for example do not asset test.

Can anyone confirm this?

Every state has asset eligibility requirements for Medicaid – and they are quite strict.

The article said $938 DOLLARS... not BILLIONS OF DOLLARS...

Technically, on page one it says $938 dollars and on page three it reads says $938 billions. Still, good find.

 

[metabasalt]

I second this. Having worked in the actuarial profession for 23 years (specializing in personal auto insurance) before I retired in 2008 at age 45, I do plan to chime in soon on this thread. I have a long, busy day ahead tomorrow so it will have to wait until Friday.

Keep on posting here, everyone. I am finding this a great read in the meantime.

I'll third this and also say that I'm so happy to see that politics has rarely entered in, thus keeping it a useful thread.

 

[Bimmerbill]

Are pensions considered income? Roth distributions? It may be worth skipping the Roth IRA if it could be used in the future to reduce future health care benefits.

 

[Alan]

I'll third this and also say that I'm so happy to see that politics has rarely entered in, thus keeping it a useful thread.

Agreed. Let's keep politics out of this thread if we can.

 

[Texas Proud]

Technically, on page one it says $938 dollars and on page three it reads says $938 billions. Still, good find.

That is why I actually copied the exact quote... like most others, I had put the billion in on my own.. but thought... that looks funny....