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01-25-2011, 07:10 AM
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#1
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Full time employment: Posting here.
Join Date: Mar 2005
Location: Punta Gorda, FL
Posts: 828
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Health Care subsidies
I'm wondering how the health care subsidies are going to work. If they are still there in 2014. I have looked at some of the calculators, but I'm not sure if the income is your gross income or taxable income.
If my numbers are correct I can show $58,000 in income, family of two, and only have to pay 9.5% for insurance. Or $5,510, which is much lower than the $13,000 I'm paying now.
I can definatly make this work if it is taxable income.
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01-26-2011, 01:43 PM
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#2
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Full time employment: Posting here.
Join Date: Nov 2009
Location: VA
Posts: 923
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__________________
Disclaimer - I am an independent insurance agent. If the above message contains insurance-related content, it is NOT intended as advice, and may not be accurate, applicable or sufficient depending on specific circumstances. Don't rely on it for any purpose. I do encourage you to consult an independent agent for insurance-related advice if you have a question that is specific in nature.
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01-26-2011, 03:32 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Nov 2005
Location: Colorado, USA
Posts: 1,127
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Quote:
Originally Posted by dgoldenz
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A little playing around with this calculator produces some interesting results. This is what I came up with for my cost at various income levels:
Income $30,000, my cost $2,509
Income $40,000, my cost $3,800
Income $46,000, my cost $4,375
-- cross over 400% of the poverty level --
Income $47,000, my cost $10,172
Income $250,000, my cost $10,172
If this is the way it is really going to work, income tax brackets may pale in significance for some of us.
Coach
__________________
"Comprehensive health insurance is an idea whose time has come in America." President Richard M. Nixon, February 6, 1974
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01-26-2011, 03:36 PM
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#4
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Full time employment: Posting here.
Join Date: Nov 2009
Location: VA
Posts: 923
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Quote:
Originally Posted by Coach
A little playing around with this calculator produces some interesting results. This is what I came up with for my cost at various income levels:
Income $30,000, my cost $2,509
Income $40,000, my cost $3,800
Income $46,000, my cost $4,375
-- cross over 400% of the poverty level --
Income $47,000, my cost $10,172
Income $250,000, my cost $10,172
If this is the way it is really going to work, income tax brackets may pale in significance for some of us.
Coach
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Try it with a 64 year old family with $93,600 income - $24k tax credit and $8k cost of coverage. Then try it again at $93,700 - $0 tax credit and $33k cost of coverage. I guess when you earn that extra $100, you are now "rich" and can afford to pay $2,900/month for health insurance instead of $700/month. What moron would want a raise when they lost a $24k tax credit by earning another $100? Scary for future economic growth.
__________________
Disclaimer - I am an independent insurance agent. If the above message contains insurance-related content, it is NOT intended as advice, and may not be accurate, applicable or sufficient depending on specific circumstances. Don't rely on it for any purpose. I do encourage you to consult an independent agent for insurance-related advice if you have a question that is specific in nature.
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01-27-2011, 06:34 AM
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#5
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Full time employment: Posting here.
Join Date: Mar 2005
Location: Punta Gorda, FL
Posts: 828
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Quote:
Originally Posted by dgoldenz
Try it with a 64 year old family with $93,600 income - $24k tax credit and $8k cost of coverage. Then try it again at $93,700 - $0 tax credit and $33k cost of coverage. I guess when you earn that extra $100, you are now "rich" and can afford to pay $2,900/month for health insurance instead of $700/month. What moron would want a raise when they lost a $24k tax credit by earning another $100? Scary for future economic growth.
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I noticed that also. Overtime could put you over also. How would you get someone to work if it put them over the 400 percent number?
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01-27-2011, 06:36 AM
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#6
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Full time employment: Posting here.
Join Date: Nov 2009
Location: VA
Posts: 923
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Quote:
Originally Posted by dm
I noticed that also. Overtime could put you over also. How would you get someone to work if it put them over the 400 percent number?
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You couldn't. I haven't calculated the number but the marginal tax rate going over 400% of FPL is insane.
__________________
Disclaimer - I am an independent insurance agent. If the above message contains insurance-related content, it is NOT intended as advice, and may not be accurate, applicable or sufficient depending on specific circumstances. Don't rely on it for any purpose. I do encourage you to consult an independent agent for insurance-related advice if you have a question that is specific in nature.
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01-27-2011, 06:55 AM
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#7
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Recycles dryer sheets
Join Date: Sep 2007
Location: Chicago
Posts: 221
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It's going to make a big difference if that is total or taxable number. If it's taxable, you're going to see me calculating just how much i might need to donate at the end of December to stay at about 399%. Not such a big deal at 35 in 2014 (less than $400 subsidy) but gets ugly in your mid to late 50s!
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01-27-2011, 07:01 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,004
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It is difficult for me to believe those "off a cliff" provisions will not be modified to a more graduated scale.
__________________
Numbers is hard
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01-27-2011, 08:13 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
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Quote:
Originally Posted by REWahoo
It is difficult for me to believe those "off a cliff" provisions will not be modified to a more graduated scale.
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My House Rep in Congress mentioned they are going after the 1099 requirement debacle, seeking to get that section removed (they already voted for repeal of the entire bill, but that isn't going to go anywhere). Even Obama cited the 1099 issue in his SOTU address (which got applause - from the people who supported it a year ago? - I need a 'head-scratching' emoticon here - ).
I haven't seen much written about this steep cliff - it really is incredibly bad. I'm not sure it's getting any attention in Congress. It's another example that indicates the people who passed/signed this bill really had no idea what it really meant.
-ERD50
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01-27-2011, 08:40 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
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Quote:
Originally Posted by dgoldenz
Try it with a 64 year old family with $93,600 income - $24k tax credit and $8k cost of coverage. Then try it again at $93,700 - $0 tax credit and $33k cost of coverage. I guess when you earn that extra $100, you are now "rich" and can afford to pay $2,900/month for health insurance instead of $700/month. What moron would want a raise when they lost a $24k tax credit by earning another $100? Scary for future economic growth.
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Here's an even more striking example, down in the more 'average working man' pay scale :
59 YO single -
$46,021 Income = $4,372 premium ($7834 Government tax credit)
Now, our 59 YO worker miscalculates his OT, or gets an unexpected bonus of a SINGLE DOLLAR, and....
$46,022 Income = $12,206 premium ($ZERO Government tax credit)
That SINGLE DOLLAR cost him $7,834 in take home pay! He is going to be mad, mad, mad. Imagine, getting a $7,834 haircut because you made an extra dollar! Employees are going to be asking for, no demanding, caps on their salary! This is just Bat-Sh!t crazy!
-ERD50
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01-27-2011, 08:44 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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I understand the motivation behind the subsidies, but as implemented, it seems to be an effective "tax bubble" (in the form of reduced subsidy) on the order of 15-18% for middle-income households who buy their own insurance. In a solidly middle class income range, for every $1000 more you earn, you lose at least $150 in subsidies. It isn't a tax per se, but it walks like one and quacks like one -- and it's rather massive.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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01-27-2011, 08:54 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Aug 2006
Posts: 2,433
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Quote:
Originally Posted by ERD50
It's another example that indicates the people who passed/signed this bill really had no idea what it really meant.
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This is the type of egregious thing that happens with a two-thousand page bill that is voted on by people who haven't read it carefully, if at all.
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
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01-27-2011, 09:27 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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There will definitely be creative accounting at the corporate level, too, to take advantage of the subsidy money. Company X will keep all its management folks earning higher salaries and continue to provide health care coverage. They will spin-off Company Y to be the employer of all their lower-income employees. Company Y won't offer health care, will pay the minor penalty, and all the workers will get the government subsidies and will be in the exchanges.
I'm assuming we'll next hear from DC about how these more cumbersome management structures and the previously mentioned government intervention in the labor market through abrupt marginal taxation subsidy rates will boost US competitiveness and job creation. "The new law created thousands of high-paying jobs for accountants and administrative personnel . . . "
My DD is 21 and, under the new law, will be kept on our employer-provided insurance (Tricare) until she's 26. For that privilege, it looks like she (I) will pay about $200 per month. Given her very low anticipated earnings, she'd be better off without this coverage and going with the government subsidy (the out of pocket premiums would be just $100 per month). Of course, lots depends on the actual policy details, but I think there will be many people and companies finding ways to get those subsidy dollars. Some studies indicate the CBO estimates of the cost of these subsidies were much too low, as they didn't account for people and companies responding to these incentives.
Unanticipated effects and costs--who'd a thunk it?
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01-27-2011, 09:56 AM
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#14
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Full time employment: Posting here.
Join Date: Mar 2005
Location: Punta Gorda, FL
Posts: 828
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Quote:
Originally Posted by seabourne
It's going to make a big difference if that is total or taxable number. If it's taxable, you're going to see me calculating just how much i might need to donate at the end of December to stay at about 399%. Not such a big deal at 35 in 2014 (less than $400 subsidy) but gets ugly in your mid to late 50s!
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This is the info I'm looking for. Is it taxable income or total? That can be a big difference.
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01-27-2011, 11:45 AM
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#15
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Moderator Emeritus
Join Date: Oct 2007
Location: Portland
Posts: 4,946
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I wouldn't worry about it. The tax credit for health insurance looks like a target for defunding.
Now, if you want something to worry about, think about how far a $491 monthly voucher ($5,900/year) will go in buying individual medical coverage when you hit age 65 (unless you means-test at the poverty line for a subsidy), under the Roadmap for America’s Future Act of 20102011.
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01-27-2011, 12:56 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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I prefer what I have today. $735 in annual premiums (with a 5K deductible) and pray I dont get sick or need any treatment, compared to what you are all posting it would cost yearly to purchase on a $75,000 income. Not much good for me to be Er'd if I had no money at all thanks to health premiums.
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01-27-2011, 04:07 PM
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#17
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Full time employment: Posting here.
Join Date: Mar 2005
Location: Punta Gorda, FL
Posts: 828
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Quote:
Originally Posted by Mulligan
I prefer what I have today. $735 in annual premiums (with a 5K deductible) and pray I dont get sick or need any treatment, compared to what you are all posting it would cost yearly to purchase on a $75,000 income. Not much good for me to be Er'd if I had no money at all thanks to health premiums.
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I wonder if those planes will still be around. It will be for the government to decied how much insurance we have to buy.
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01-27-2011, 05:57 PM
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#18
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Moderator Emeritus
Join Date: Oct 2007
Location: Portland
Posts: 4,946
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Quote:
Originally Posted by dm
I wonder if those planes will still be around. It will be for the government to decied how much insurance we have to buy.
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I'm fine with seeing some of the more absurd plans drop dead. There were a bunch of, to be blunt, ripoff plans sold to college students and parents. "Pays up to $2,500 for hospitalization!" Yeah. That'll work. "Covers injuries due to student sports activities only." "Does not cover cancer or cancer-related illnesses." (All from campus insurance policies I looked at for the kids when they went off to school. )
Having a minimum level of coverage required to pass off an insurance policy as health insurance is a good thing. It sets a standard, and makes price comparison easier. We can argue about what that level should be. (I think Congress was generous with other people's money again...)
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01-27-2011, 07:28 PM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Quote:
Originally Posted by M Paquette
I'm fine with seeing some of the more absurd plans drop dead. There were a bunch of, to be blunt, ripoff plans sold to college students and parents. "Pays up to $2,500 for hospitalization!" Yeah. That'll work. "Covers injuries due to student sports activities only." "Does not cover cancer or cancer-related illnesses." (All from campus insurance policies I looked at for the kids when they went off to school. )
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This is the *opposite* of what insurance should be. Insurance should be protection against catastrophic loss, IMO, not merely paying for a few small things and then leaving you on your own to be bankrupted by the big things. Good insurance should leave you to self-insure smaller, absorbable financial hits while protecting you from the ruinous ones. These plans do the exact opposite.
Dental "insurance" is very much this way, too, which is why it rarely makes sense to purchase unless it's heavily employer-subsidized.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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01-27-2011, 11:34 PM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by REWahoo
It is difficult for me to believe those "off a cliff" provisions will not be modified to a more graduated scale.
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Well, the government is the planner here......
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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