New ACA Subsidy In Relief Package?

[zinger1457]

A proposal in the new covid relief package would offer subsidies for higher income individuals on ACA that don't currently qualify for a subsidy. From the NY Times:

The Biden plan would create a new cap — 8.5 percent of an individual or family’s income on premium contributions — for midlevel health plans, something the president-elect had also proposed during the campaign. This policy would mostly affect higher-earning Americans who do not currently qualify for subsidies.

 

[RunningBum]

A proposal in the new covid relief package would offer subsidies for higher income individuals on ACA that don't currently qualify for a subsidy. From the NY Times:

Can you provide the link? I looked and can't find it and would like to read more.

 

[zinger1457]

https://www.nytimes.com/2021/01/16/upshot/biden-obamacare-stimulus.html

 

[aaronc879]

I don't think 6-figure earners should need help paying their premiums. The help would be better used for those in the 200-400% poverty level who lose the cost sharing. Get those people the cost sharing so they don't have a $5000 deductible. That is a killer for the low to mid earners but not so much for the 6-figure people.

 

[truenorth418]

If I read the NY Times article correctly, the proposal would eliminate the subsidy cliff? Instead, one would pay no more that 8.5% of their annual income on health insurance, regardless of their income. The devils in the details but for some of us I think this approach would lead to less “game playing” with income- such as taking massive capital gains one year in order to qualify for subsidies the next. it would make annual budgeting a lot more straightforward.

 

[RunningBum]

If I read the NY Times article correctly, the proposal would eliminate the subsidy cliff? Instead, one would pay no more that 8.5% of their annual income on health insurance, regardless of their income. The devils in the details but for some of us I think this approach would lead to less “game playing” with income- such as taking massive capital gains one year in order to qualify for subsidies the next. it would make annual budgeting a lot more straightforward.

Agreed. It's its as straightforward as that, then if I slipped over 400%FPL my insurance would only go from $198/month to $368, rather than $817, based on this year's numbers. I know it won't go into effect this year, but that's just a comparison. Still a jump, but not a chasm like the ACA cliff can be.

 

[GenXguy]

It won't help if SCOTUS strikes down the ACA, and we might not know the answer to that until June. Arguments sounded favorable that it would be upheld, except perhaps the $0 mandate.

I do think the cliff should have a more gradual rolloff. It can be shocking if you earn just enough to fall off the cliff.

 

[zinger1457]

Agreed. It's its as straightforward as that, then if I slipped over 400%FPL my insurance would only go from $198/month to $368, rather than $817, based on this year's numbers. I know it won't go into effect this year, but that's just a comparison. Still a jump, but not a chasm like the ACA cliff can be.

Not a lot of details provided on the new proposal but I'm assuming the subsidy calculation would stay the same, they would just remove the income limits. With the new proposal there shouldn't be much of a difference in premiums if you are just below or above the current cliff. The most you would pay is 8.5% of income based on the cost of a Silver plan, if you selected the lowest cost Bronze plan you would be paying a lot less than 8.5% of your income towards premiums.

 

[RunningBum]

Ah, yeah, my calc was based on paying 8.5% for the bronze plan I selected.

 

[ncbill]

Would love such a change...could dump our expensive employer health insurance for a heavily-subsidized ACA plan.

And Medicare at age 60 as well...

 

[erkevin]

As a retired couple paying $1348/mo. for a bronze ACA plan, any help would be wonderful.

 

[Stormy Kromer]

As a retired couple paying $1348/mo. for a bronze ACA plan, any help would be wonderful.

Same premium DW and I are paying this year for a Bronze Plan with a $7,000 plus deductible and $16,000 or so Out of Pocket.

Income is just over the cliff, but well under $100k. We're paying way more than 8.5% of our income in premiums.

 

[scrabbler1]

Fixing any Cliff problems would have been more helpful to me a few years ago when I was close to or barely going over the Cliff. Now that I have adjusted my portfolio to keep my income well below the Cliff, I can't say I have any big stake in this issue any more. Still, they should fix it with a non-income-related cap or a gradual phaseout.

 

[ivinsfan]

Would love such a change...could dump our expensive employer health insurance for a heavily-subsidized ACA plan.

And Medicare at age 60 as well...

For right now only the employee's cost of the work based insurance is counted in the 8.5% not the entire family. That's how I understand it. I know some older couples stuck on this point. Maybe I misunderstood what they said or they don't know the rules.

This does seem more even handed then the cliff but will cost taxpayers and boatload of money.

 

[ShokWaveRider]

A little off topic (Sorry), but why wouldn't they just re-implement the mandate or make it $1 to eliminate the ACA lawsuit currently in the SCOTUS?

 

[zinger1457]

Would love such a change...could dump our expensive employer health insurance for a heavily-subsidized ACA plan.

My understanding is that there are very limited circumstances where one who is offered health insurance through an employer could qualify for a subsidy through ACA, regardless of income level.

 

[erkevin]

Same premium DW and I are paying this year for a Bronze Plan with a $7,000 plus deductible and $16,000 or so Out of Pocket.

Income is just over the cliff, but well under $100k. We're paying way more than 8.5% of our income in premiums.

The $1348 comes to 20.2% of our income

 

[zinger1457]

A little off topic (Sorry), but why wouldn't they just re-implement the mandate or make it $1 to eliminate the ACA lawsuit currently in the SCOTUS?

I recall reading that there is a plan, through executive order, to undo the changes that got rid of the mandate.

 

[ShokWaveRider]

I recall reading that there is a plan, through executive order, to undo the changes that got rid of the mandate.

Hopefully...

 

[jim584672]

I recall reading that there is a plan, through executive order, to undo the changes that got rid of the mandate.

That would need that done via Congress, EO won't work.

"Bidencare" was supposed to be bench marked on the second lowest cost Gold plan and capped @ 8.5% with no income limit. Also a optional "public option" would be available.

 

[zinger1457]

That would need that done via Congress, EO won't work.

You might be right, got the EO mandate plan from this article: https://www.nbcnews.com/politics/me...cal-discussion-n988541/ncrd1030086#blogHeader

President Donald Trump got rid of the individual mandate when he signed the GOP tax bill into law in 2017. Biden would bring back the penalty for not being covered under health insurance under his plan.
Since the individual mandate currently is not federal law, a Biden campaign official said that he would use a combination of executive orders to undo the changes and use his “longstanding history of getting stuff done in Congress to get legislation to build on the Affordable Care Act.”

 

[ncbill]

My understanding is that there are very limited circumstances where one who is offered health insurance through an employer could qualify for a subsidy through ACA, regardless of income level.

Affordability is one...but that's based on only the premium to cover the employee, not employee & spouse or employee, spouse & kids right now.

 

[gauss]

I don't think 6-figure earners should need help paying their premiums. The help would be better used for those in the 200-400% poverty level who lose the cost sharing. Get those people the cost sharing so they don't have a $5000 deductible. That is a killer for the low to mid earners but not so much for the 6-figure people.

6-figure earners who's health insurance premiums are less than 8.5% of their income would not receive any subsidy under this proposal.

As a less than 6-figure, relatively healthy 'earner',who is currently above the 400% of FPL cliff, I welcome this change.

-gauss

 

[zinger1457]

6-figure earners who's health insurance premiums are less than 8.5% of their income would not receive any subsidy under this proposal.

One of the proposed changes is to use the cost of a Gold plan to determine subsidy eligibility/calculation instead of using a Silver plan cost. Based on the lowest cost Gold plan currently offered to me ($1500/mo) it looks like one could start collecting a subsidy with an income under ~$212K/yr, granted the subsidy would likely be very small at any income close to that level.

 

[ownyourfuture]

I do think the cliff should have a more gradual rolloff. It can be shocking if you earn just enough to fall off the cliff.

Don't I know it!
In late 2018, a food stock I own was acquired by ConAgra.
This resulted in unexpected capital gains of approximately $4,000.00
I went over the cliff by around $220.00 & this changed my federal return from a refund of $150.00, to owing $5,496.00