PPACA, Obamacare and General Comments

[mpeirce]

The rumors are that the exchanges that are not quite ready to go live are such because the development and deployment efforts were underfunded. As with most other things in the government, politicians work to deliberately sabotage the efforts related to initiatives that they personal opposed but failed to prevail in their opposition.

"Never ascribe to malice that which is adequately explained by incompetence."

-- Napoleon (or variously Heinlein)

 

[bUU]

I have reason to know that it isn't (only) incompetence.

 

[Chuckanut]

I have a feeling that PPACA will free a lot of people from jobs and positions that are not right for them. Many people are forced to hang on to a job they do not care for because they or a dependent need the medical insurance. With PPACA they will be free to change to a more appropriate job or, perhaps, pursue, entrepreneurial opportunities. Either way, our economy should benefit. This is a hunch, but I think it is a logical one. My 2 cents.

 

[sengsational]

I have a feeling that PPACA will free a lot of people from jobs and positions that are not right for them. Many people are forced to hang on to a job they do not care for because they or a dependent need the medical insurance. With PPACA they will be free to change to a more appropriate job or, perhaps, pursue, entrepreneurial opportunities. Either way, our economy should benefit. This is a hunch, but I think it is a logical one. My 2 cents.

Probably true for pre-existing medical condition entrepreneurs. But the healthy ones? The prices might scare them away.

 

[MichaelB]

"Never ascribe to malice that which is adequately explained by incompetence."

-- Napoleon (or variously Heinlein)

I have reason to know that it isn't (only) incompetence.

If anything, Hofstadter's Law.

It always takes longer than you expect, even when you take into account Hofstadter's Law

 

[Htown Harry]

Has anyone come across age-specific advice giving details on how young adult eligibility and premiums will be figured through the exchanges?

Consider this no-so-hypothetical ER scenario...

Married parents are in their 50's, with DH's employment HI providing family coverage for the couple. There is a 19-year-old child in college and another self-sufficient 24 y.o. child presently qualifying for the "under 26 on his parents policy" provision in the ACA.

If the parents begin early retirement in 2014, from the IRS link posted I think it's clear that just as long as he remains a dependent on the parents tax return the 19 y.o. will be part of the household and therefore an exchange-eligible insured as part of the family.

It's not so clear for the older child. I have seen information on under-30's being eligible for a lower-premium, high deductible catastrophic policy, for example on the KFF calculator page:

Children and young adults under age 30 are eligible to purchase catastrophic coverage. Catastrophic coverage does not provide coverage for essential health benefits until you reach the annual limit on cost sharing ($12,500 in 2014).

The reason I ask is the Colorado / Berkeley and KFF calculators have very different input screens for children. KFF has a single check-box for "children 20 and younger". The other calculator has one box for "under 21" and a second for "children 21-15".

I ran a scenario on the Colorado calculator for a 3-person, $60,000 household with two 55 y.o.'s and a 19 y.o. The premium after subsidy was $475 /mo. ($1468 unsubsidized). Adding in a 24 y.o. while keeping the rest of the entries the same, the unsubsidized premium goes to $1756 and the premium after subsidy remains $475.

Restating these numbers, the government subsidy covers 100% of the 24 y.o.'s incremental cost of $288.

When I plug in a solo 24 y.o. at $20,000 income I get a $288 unsubsidized Silver premium, but the 24 y.o.'s premium after subsidy is $85.

I found no data on catastrophic policy premiums, but it's won't be zero.

My takeaway: I cannot see a scenario where it makes sense to do anything other than keep a 24 y.o. on the family policy.

 

[Buckeye]

Ah ha. So the family unit with one person on the exchange and one person on Medicare pays more compared to two 64 year olds because the net cost of the exchange policy considers the income of both people in calculating the subsidy but ignores the Medicare premium? That's stoopid.

Well, the only reason things get more expensive in the second scenario is because Medicare and Medigap are not subsidized. Whether things get more expensive compared to when there was no subsidy and I'm the only one on the policy is another story.

 

[Buckeye]

Has anyone come across age-specific advice giving details on how young adult eligibility and premiums will be figured through the exchanges?

Consider this no-so-hypothetical ER scenario...

Married parents are in their 50's, with DH's employment HI providing family coverage for the couple. There is a 19-year-old child in college and another self-sufficient 24 y.o. child presently qualifying for the "under 26 on his parents policy" provision in the ACA.

If the parents begin early retirement in 2014, from the IRS link posted I think it's clear that just as long as he remains a dependent on the parents tax return the 19 y.o. will be part of the household and therefore an exchange-eligible insured as part of the family.

It's not so clear for the older child. I have seen information on under-30's being eligible for a lower-premium, high deductible catastrophic policy, for example on the KFF calculator page:
The reason I ask is the Colorado / Berkeley and KFF calculators have very different input screens for children. KFF has a single check-box for "children 20 and younger". The other calculator has one box for "under 21" and a second for "children 21-15".

I ran a scenario on the Colorado calculator for a 3-person, $60,000 household with two 55 y.o.'s and a 19 y.o. The premium after subsidy was $475 /mo. ($1468 unsubsidized). Adding in a 24 y.o. while keeping the rest of the entries the same, the unsubsidized premium goes to $1756 and the premium after subsidy remains $475.

Restating these numbers, the government subsidy covers 100% of the 24 y.o.'s incremental cost of $288.

When I plug in a solo 24 y.o. at $20,000 income I get a $288 unsubsidized Silver premium, but the 24 y.o.'s premium after subsidy is $85.

I found no data on catastrophic policy premiums, but it's won't be zero.

My takeaway: I cannot see a scenario where it makes sense to do anything other than keep a 24 y.o. on the family policy.

Wouldn't you have to count the 24 year old's income if you are going to make them part of the family? The increase in income may have the effect of reducing or eliminating the subsidy.

 

[Buckeye]

I have a feeling that PPACA will free a lot of people from jobs and positions that are not right for them. Many people are forced to hang on to a job they do not care for because they or a dependent need the medical insurance. With PPACA they will be free to change to a more appropriate job or, perhaps, pursue, entrepreneurial opportunities. Either way, our economy should benefit. This is a hunch, but I think it is a logical one. My 2 cents.

+1, but I think it will be more ER's than entrepreneurs.

 

[Katsmeow]

Wouldn't you have to count the 24 year old's income if you are going to make them part of the family? The increase in income may have the effect of reducing or eliminating the subsidy.

The language quoted in Post 36 does seem to suggest that you count the income of everyone.

 

[Buckeye]

The language quoted in Post 36 does seem to suggest that you count the income of everyone.

From what I read in one of the documents, it seems you are obligated to count all the household income prior to determining your household subsidy. This is going to get interesting!

 

[gauss]

+1, but I think it will be more ER's than entrepreneurs.

That was the case for me.

I have access to DW health plan currently , but if her MegaCorp changes things, then I wanted to have something else between me and the old individual insurance market. I was carefully watching the 2012 election results while planning for a possible ER that became reality in April.

-gauss

 

[Htown Harry]

The language quoted in Post 36 does seem to suggest that you count the income of everyone.

Yes, I read that, but paragraph one explicitly says to count only the household members who are dependents on a tax return. I know that currently isn't a test for eligibility for coverage on an employer policy, thus my confusion.

I thought of another possibility. Perhaps the "under 26" provision only applies to an employer's policy. For the exchange policies, a dependancy test applies?

 

[MichaelB]

The way I ready the IRS language, the household income is only from individuals treated as dependents on the tax return. In that case, a 25 year old child that is working is automatically eligible for coverage, but his / her income is not included in the test. I recall a Q&A on this somewhere and have looked around but can't find it - but will look again later.

(d) Terms relating to income and families
For purposes of this section—
(1) Family size
The family size involved with respect to any taxpayer shall be equal to the number of individuals for whom the taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year.
(2) Household income (A) Household income
The term ‘‘household income’’ means, with respect to any taxpayer, an amount equal to the sum of—
(i) the modified adjusted gross income of the taxpayer, plus
(ii) the aggregate modified adjusted gross incomes of all other individuals who—
(I) were taken into account in determining the taxpayer’s family size under paragraph (1), and
(II) were required to file a return of tax imposed by section 1 for the taxable year.

 

[pb4uski]

So my 25 yo DS who is working and living on his own can be included on my HI policy but his income won't be included in my O-MAGI for determining the subsidy? sounds like his coverage would be a freebie then since if there is any extra premium for including him vs just me and DW that it would increase my subsidy.

 

[MichaelB]

So my 25 yo DS who is working and living on his own can be included on my HI policy but his income won't be included in my O-MAGI for determining the subsidy? sounds like his coverage would be a freebie then since if there is any extra premium for including him vs just me and DW that it would increase my subsidy.

I would imagine that most 26 and under working people are drawing incomes that are below 4x the FPL, so they would be eligible for premium support on their own. Also keep in mind that they must live in the policy coverage area.

Still, this looks like something that we should confirm before jumping in.

 

[Htown Harry]

So my 25 yo DS who is working and living on his own can be included on my HI policy but his income won't be included in my O-MAGI for determining the subsidy? sounds like his coverage would be a freebie then since if there is any extra premium for including him vs just me and DW that it would increase my subsidy.

This is exactly the result I got using the calculator.

On one hand, that was the deal when I kept DD on my employer policy following college graduation a couple of years ago. The premium table stopped at "employee +2". She was the fourth covered person, so the cost of keeping her on the policy was zero.

On the other hand, if DD#2 age 19 earns enough to file a tax return while still qualifying as my dependent, her income will be added to the calculation and the after-subsidy premium will go up. (or worse, given the 400% of poverty level cliff)

 

[sheehs1]

When plugging numbers into both of these calculators, it seems the payment is the same whether you make $60,000 or $200,000. Is this correct? If so, those just over the threshold get nailed. Is there no sliding scale for incomes beyond the threshold?

Don't know what to say. I've subconsciously avoided delving into this too much hoping "someone" would tweak the law for those of us with private insurance.

Minimally based on these calculators our health care costs will double and possibly triple what it is today.

 

[sengsational]

Minimally based on these calculators our health care costs will double and possibly triple what it is today.

Well, based on that statement I can say with impunity "at least you have your health" (otherwise you'd not see the huge price difference). And just think of all of the sick people you'll be helping out by paying extra.

 

[Mulligan]

Well, based on that statement I can say with impunity "at least you have your health" (otherwise you'd not see the huge price difference). And just think of all of the sick people you'll be helping out by paying extra.

I am in the same boat as Sheesh. We all are a little motivated in our own self interests. I haven't seen any posters who are facing 300-500% increases getting on the soapbox and espousing the virtues of this new act. But, I am resigned to the fact that there will be winners and losers in all laws, and I am going to be a big loser. But on the other side, there will be some big winners who have suffered for a while, and are going to catch a break finally.

 

[bUU]

I haven't seen any posters who are facing 300-500% increases getting on the soapbox and espousing the virtues of this new act.

I support the ACA, and I'll be over the 400% FPL limit as soon as we retire. Some of us are more concerned about our children, the children we help nurture through our church, the children that those children will have, our elderly neighbors, etc., collectively, than we are regarding ourselves.

 

[Mulligan]

I support the ACA, and I'll be over the 400% FPL limit as soon as we retire. Some of us are more concerned about our children, the children we help nurture through our church, the children that those children will have, our elderly neighbors, etc., collectively, than we are regarding ourselves.

Would your retirement date have changed if the Healthcare Act had not been implemented? Just because the 400% limit does not benefit you, does not necessarily mean you personally do not benefit from the Act itself. FWIW- I have previously said I am not necessarily against it, but that still does not avoid the fact I am a big financial loser in it. I had my plan prior to enactment of law and will now more than likely lose it, even though that wasn't supposed to be the case. BTW- I am working to be as pious as you, but I am still a work in progress.

 

[MichaelB]

This increase in price will be a real problem for many, and is an issue that deserves much more attention. Our health care costs much more than what most people pay individually, and while it is "good" that the distortions are removed and people see the true cost of healthcare in the US, it is time to move to the next phase, which is to control cost.

 

[Brat]

Oregon may be 'special'

Oregon's 2014 health premium filings spark relief, questions | OregonLive.com

Now there is a concern that insurers are bidding too low.

 

[bUU]

Would your retirement date have changed if the Healthcare Act had not been implemented?

Maybe; maybe not. The point is that it doesn't matter.

Just because the 400% limit does not benefit you, does not necessarily mean you personally do not benefit from the Act itself.

And just because you feel antipathy toward the ACA doesn't mean that it doesn't currently or won't eventually benefit you or yours.

FWIW- I have previously said I am not necessarily against it, but that still does not avoid the fact I am a big financial loser in it.

The question that you may want to ask yourself is whether you would prefer to qualify to be a "financial winner". I sure wouldn't, and I know a good number of very hardworking people who will be "financial winners" vis a vis ACA who would have traded their luck for mine, over the course of our lives, in this regard.