Patient Protection and Affordable Care Act

[MichaelB]

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Originally Posted by Brat One way to prevent 'just in the nick of time' behavior is to limit coverage opportunities to once or twice a year and upon specific events (marriage, birth of a child, loss of a job) as employers do today.

That's what insurance companies do now in Florida for small business policies of 1. Enrollment is October 1 and the window is 8/1 thru 8/31.

[tapper]

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Originally Posted by MichaelB This from the Kaiser Family Foundation summary. Nowhere near 60. More like 6, if you count new taxes and changes in tax rates. Quote: • Increase the threshold for the itemized deduction for unreimbursed medical expenses from 7.5% of adjusted gross income to 10% of adjusted gross income for regular tax purposes; waive the increase for individuals age 65 and older for tax years 2013 through 2016. (Effective January 1, 2013)

Is there anything in the law to allow for a deduction for health insurance? It doesn't seem very fair that group policy holders get an implicit deduction while individual policy holders don't. The upward adjustment to unreimbursed medical expenses seems to be applying some salt to the wound.

[scrabbler1]

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Originally Posted by tapper Is there anything in the law to allow for a deduction for health insurance? It doesn't seem very fair that group policy holders get an implicit deduction while individual policy holders don't. The upward adjustment to unreimbursed medical expenses seems to be applying some salt to the wound.

This unequal tax treatment bugs me, too. Those in group policies through their employer pay no tax on the employer-paid portion, then can use pretax dollars on their share even if they do not itemize deductions on their income tax retrns. But those of us with individual policies can at best deduct part of our premiums (and soon a lesser part of those premiums) but cannot deduct the rest of the premiums. And if we don't itemize, we can't deduct any of it.

Having just switched from a group policy to an individual one in 2009, I have seen this change first hand. And now that I won't be itemizing every year, it only gets worse for those of us FIREd.

[easysurfer]

Okay, so I go to a website (not going to give the link here as some consider it too political) that asks to enter a few info (age, state of residence, annual income, do you have current insurance or denied in the past, etc.). I put in some numbers that a person in ER might have. Then out comes a recommended report.

One of the results, might want to consider medicaid. Is that a glitch in the ACA? For example, if one if financially independent enough to FIRE, but doesn't have wage income anymore, would medicaid really be the appropriate option to look into?

I remember, when I FIRE'd and told my boss, during my exit interview, he asked me "So, do you need to file for unemployment now?" I said, "Nope, I called it a career."

[ziggy29]

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Originally Posted by easysurfer One of the results, might want to consider medicaid. Is that a glitch in the ACA? For example, if one if financially independent enough to FIRE, but doesn't have wage income anymore, would medicaid really be the appropriate option to look into? "

As I recalled, ACA expanded Medicaid eligibility up to incomes of 138% of the federal poverty line. So if someone can live an acceptable (to them) lifestyle on that income level or less...

Who Benefits from the ACA Medicaid Expansion? - Kaiser Family Foundation

One thing that historically could vary from state to state is asset limits on top of income limits.

[easysurfer]

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Originally Posted by ziggy29 As I recalled, ACA expanded Medicaid eligibility up to incomes of 138% of the federal poverty line. So if someone can live an acceptable (to them) lifestyle on that income level or less... Who Benefits from the ACA Medicaid Expansion? - Kaiser Family Foundation One thing that historically could vary from state to state is asset limits on top of income limits.

Thanks for the link.

That's very interesting. I see the rationale about both asset limits on top of income limits.

As an extreme example, lets say Mr. Chicken only invests in Money Market Funds. He carrys his entire life savings in a MMF that, at the paltry interest rates, earns him $15K in dividends a year. No other income. To earn $15K in dividends alone in a MMF still requires a pretty large amount. Yet, he'd still qualify for medicaid if there is no asset limit...

Interesting..

[donheff]

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Originally Posted by easysurfer Thanks for the link. That's very interesting. I see the rationale about both asset limits on top of income limits. As an extreme example, lets say Mr. Chicken only invests in Money Market Funds. He carrys his entire life savings in a MMF that, at the paltry interest rates, earns him $15K in dividends a year. No other income. To earn $15K in dividends alone in a MMF still requires a pretty large amount. Yet, he'd still qualify for medicaid if there is no asset limit... Interesting..

Yeah, we can parse things a million ways but how many of marginal income FIRE folks are out there to worry about. Most people in the situation you mention will be over 65 and on Medicare. Most of the rest will be temporarily unemployed and looking for work (a good example of people who could use a subsidy). The few young intentional ERers that sneak thru are winners on the ACA sweepstakes.

[Mulligan]

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Originally Posted by scrabbler1 This unequal tax treatment bugs me, too. Those in group policies through their employer pay no tax on the employer-paid portion, then can use pretax dollars on their share even if they do not itemize deductions on their income tax retrns. But those of us with individual policies can at best deduct part of our premiums (and soon a lesser part of those premiums) but cannot deduct the rest of the premiums. And if we don't itemize, we can't deduct any of it. Having just switched from a group policy to an individual one in 2009, I have seen this change first hand. And now that I won't be itemizing every year, it only gets worse for those of us FIREd.

I agree, also with you. I would have loved an increased HSA contribution limit too!

[clifp]

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Originally Posted by MichaelB This from the Kaiser Family Foundation summary. Nowhere near 60. More like 6, if you count new taxes and changes in tax rates.

Well the tanning bed tax makes it 7 taxes.

[Mulligan]

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Originally Posted by clifp Well the tanning bed tax makes it 7 taxes.

This article says 21 taxes.

The high court’s ruling leaves in place 21 tax increases in the health care law costing more than $675 billion over the next 10 years, according to the House Ways and Means Committee. Of those, 12 tax hikes would affect families earning less than $250,000 per year, the panel said, including a “Cadillac tax” on high-cost insurance plans, a tax on insurance providers and an excise tax on medical-device manufacturers.

http://p.washingtontimes.com/news/20...bamas-health-/

[Nords]

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Originally Posted by marko ... when do we see a thread on 'controlling your taxable income' pop up? Many of us seem to be just above the thresholds...a little creativeness would drop us below.

Getting back to this question, I think that's a perpetual thread not necessarily related to healthcare.

Most ERs spend considerable effort controlling their taxable income after they ER so that they can do Roth IRA conversions, enjoy long-term unrealized cap gains, and minimize their SWRs.

[Purron]

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Originally Posted by Nords Getting back to this question, I think that's a perpetual thread not necessarily related to healthcare. Most ERs spend considerable effort controlling their taxable income after they ER so that they can do Roth IRA conversions, enjoy long-term unrealized cap gains, and minimize their SWRs.

True Nords, but doesn't the PPACA add another dimension to controlling taxable income? Does for DH and I since we haven't or plan to do roth conversions plus have miminal capital gains. Don't think we're the only ones...

[Nords]

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Originally Posted by Purron True Nords, but doesn't the PPACA add another dimension to controlling taxable income? Does for DH and I since we haven't or plan to do roth conversions plus have miminal capital gains. Don't think we're the only ones...

Don't know, and it's probably too early to speculate until the IRS starts coughing out new pubs & forms...

[Purron]

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Originally Posted by Nords Don't know, and it's probably too early to speculate until the IRS starts coughing out new pubs & forms...

Now that will be an occasion worthy of a new thread

[devans0]

Fine print or the market can change plans but the guaranteed coverage part of PPACA means I have just joined the January class of 2014. Roth/IRA taxes adds another wrinkle to keep life interesting.

[Texas Proud]

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Originally Posted by Purron Nothing I can see, but what would happen if they had an accident, heart attack, or some other medical condition requiring immediate treatment?

Most accidents will get you in a hospital and taken care of..... maybe with big bill.... but then you have to decide if you want to pay them or not... I do not see this being the deciding factor in a number of people's decision....

[Purron]

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Originally Posted by devans0 Fine print or the market can change plans but the guaranteed coverage part of PPACA means I have just joined the January class of 2014. Roth/IRA taxes adds another wrinkle to keep life interesting.

Back on topic: I'd proceed with caution if the guaranteed coverage part of the PPACA is your final deciding factor for early retirement. As discussed extensively in this thread, there are lots of things that can (and probably will) happen between now and 2014 to impact all of our future decisions - retired or not.

[donheff]

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Originally Posted by Texas Proud Most accidents will get you in a hospital and taken care of..... maybe with big bill.... but then you have to decide if you want to pay them or not... I do not see this being the deciding factor in a number of people's decision....

I think it is a big factor if you earn a decent salary or are building a portfolio. Can't a hospital put a lien on your wages and attach assets outside of an IRA/401k? This seems like an area where health insurance acts like, well insurance. If you don't earn enough to care and have no assets, you probably qualify for a nice subsidy.

[Texas Proud]

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Originally Posted by donheff I think it is a big factor if you earn a decent salary or are building a portfolio. Can't a hospital put a lien on your wages and attach assets outside of an IRA/401k? This seems like an area where health insurance acts like, well insurance. If you don't earn enough to care and have no assets, you probably qualify for a nice subsidy.

I agree that it is a big factor in most of our decisions... but that is because we think different....

Some people are willing to take the chance.... and most people who do will not have anything bad happen... I was only pointing out that if there were an accident etc., not having insurance will probably not be the deciding factor in your getting health care.... paying for that health care is the other matter....

[shotgunner]

This thread is a LONG read but it is a great thread. I currently have a HDHP w/HSA health policy which before Obamacare I thought would be my insurance plan until reaching Medicare in 10 years.

Using the KFF subsidy calculator for a single person like myself the cutoff between Obamacare subsidy and Medicaid is just under $15,303.

Medicaid is a state run program, Obamacare is Federal. Medicaid in NH is asset tested so I would never qualify.

So IF Obamacare stands and is funded, I will want a taxable income somewhere between $15,303 and $46,021. I have not figured out where the sweet spot is yet.

Presently I am working P/T without benefits but if I were to stop I might consider starting an income stream from several pretax retirement accounts to qualify for the subsidy OR I might decide to continue P/T work.

Obamacare as it stands will change the decisions of how people draw from retirement accounts, investments and how much they want to make from employment at a minimum. It would appear it may make early retirement easier for some folks.

The devil is in the details and politics yet to come.