Why does the same ACA plan change deductible based on subsidy amount?

[Aggie1999]

Quote:

Originally Posted by MRG Subsidies, deductibles, and cost are attributes of the plan, not a new entity.

I would agree on the subsidies, as the overall premium the insurance company receives seems to be the same. To me though, something like deductible amounts, out of pocket, etc fundamentally change the plan.


Of course, really doesn't matter as long as one understands what is going on. Having a different plan ID probably wouldn't have made it any more obvious. I thank everyone on this thread of educating me on this stuff.

[MRG]

Quote:

Originally Posted by Aggie1999 I would agree on the subsidies, as the overall premium the insurance company receives seems to be the same. To me though, something like deductible amounts, out of pocket, etc fundamentally change the plan. Of course, really doesn't matter as long as one understands what is going on. Having a different plan ID probably wouldn't have made it any more obvious. I thank everyone on this thread of educating me on this stuff.

I'm sorry, I should have explained. Attributes vs. entities is a data modeling discussion. In a physical data model, a column in a table vs. a new table.

[MichaelB]

Quote:

Originally Posted by MRG Subsidies, deductibles, and cost are attributes of the plan, not a new entity.

Exactly. The plan is 1) what medical services are covered by the insurer, and 2) what provider network is included. The ACA mandates highly standardize coverage, so most ACA compliant plans are almost identical in coverage. Plans vary widely in network and it is critical to understand exactly how broad the network is before enrolling.

Copays, deductibles and total out of pocket are just different ways to pay for the same plan. What matters is the total cost of health care: premiums + copays + deducibles. One really needs spreadsheet to calculate that. One of our members put together an easy to use excel sheet to help with that. Animorph’s spreadsheet can be found here https://www.early-retirement.org/for...ml#post1374536

[ncbill]

Quote:

Originally Posted by FrankiesGirl You could only get away with grossly underestimating your MAGI 1-2 years I imagine before they'd likely take action, and I would be quite concerned at them going after the ones that blatantly lied to take advantage. They do ask you to justify when there is a significant drop in income. When I quit my job and reported our income to be 75% lower, they contacted me and asked for a statement of why. I explained that I was no longer employed and income would be from investments/retirement accounts and swore the reported income was the closest estimate I could come up with to the best of my ability. I'm pretty sure if you lied on that statement, it would be noted the following year when you trued up the subsidies, and they wouldn't fall for it twice.

Which would require proving an intent to defraud...a high bar to overcome.

There are all sorts of reasons household income can be higher than initial estimates...e.g. a family member unexpectedly re-employed during the year, investments had to be sold to meet unexpected needs, etc.

Note that if household income turns out to be lower than expected (I.e. you should have been in Medicaid rather than the ACA) repayment is limited...i.e. $600 for MFJ.

[GTFan]

Quote:

Originally Posted by FrankiesGirl You could only get away with grossly underestimating your MAGI 1-2 years I imagine before they'd likely take action, and I would be quite concerned at them going after the ones that blatantly lied to take advantage.

You'd think so, but recently one of our members admittted underestimating income by at least 100% to get max CSR plans with no adverse actions over the last few years.

Given that, there really is no reason not to estimate below 150% FPL and just reconcile PTC at tax time. They don't care after your initial estimate is approved.