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One Of My Concerns
Old 04-12-2018, 01:37 PM   #1
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One Of My Concerns

https://www.twincities.com/2018/04/1...-make-a-point/

On the one hand, I applaud this man for having the guts to go through with this to prove his point. On the other hand, I fear that if they ever seriously addressed this & counted assets, they could also apply it to subsidized healthcare at some point.

I'm sure I'm not alone when I say, I've been thinking about this since I retired @ 53 mid 2015.

I know one side of the political aisle here in Minnesota, has been pushing to count assets & not just income relating to subsidized healthcare for years.

If this was addressed, & because of my assets, I had to pay the amount I'm 'supposed to be paying' I could absorb it. But what if they took that amount & doubled it ?

This could be very interesting.
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Old 04-12-2018, 01:44 PM   #2
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This trickles over into social security as well.
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Old 04-12-2018, 02:23 PM   #3
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This trickles over into social security as well.
Probably not... SS is different in that it is effectively (ok, I know not legally but effectively) a life insurance, disability insurance and pension program bundled into one. We pay premiums (in the form of taxes) and our beneficiarie receive benefits if we die, or we receive benefits if we become disabled and we receive retirement benefits when we reach retirement age. And admittedly, the retirement benefits are lopsided in that higher earners get lower retirement benefits relative to their contributions than lower earners so there are some warts.... but support for the program would disappear if it were to evolve into just another entitlement program.

On the point that the gentleman was trying to make.... I totally agree that those with substantial assets should not receive SNAP, or ACA subsidies, or other such benefits intended for the "needy"... but that is not the way those programs are designed.... I suspect in part because of the perceived difficulties in admnistering compliance.

However, IMO that compliance issue could be solved very easily by having a question on the program application along the lines of is your net worth greater than $x? Those who answer yes get benefits... those who answer no do not... and those who answer yes are subject to random audit and if you answer yes falsely then you go to jail for up to a year.

P.S. If I had done what the guy did... instead of saying that I increased my charitable giving by the amount received I would have handed the state treasury a check equal to the benefits that I received plus interest since then the "payback" would be verifiable.
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Old 04-12-2018, 02:25 PM   #4
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You don't think there will be means testing for SS at some point?
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Old 04-12-2018, 02:28 PM   #5
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No, not directly anyway. Perhaps indirectly in taxing more than 85% of SS benefits... but I think more than 85% would be questionable theoretically but as a political reality it might happen.
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Old 04-12-2018, 02:42 PM   #6
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Probably not... SS is different in that it is effectively (ok, I know not legally but effectively) a life insurance, disability insurance and pension program bundled into one. We pay premiums (in the form of taxes) and our beneficiarie receive benefits if we die, or we receive benefits if we become disabled and we receive retirement benefits when we reach retirement age. And admittedly, the retirement benefits are lopsided in that higher earners get lower retirement benefits relative to their contributions than lower earners so there are some warts.... but support for the program would disappear if it were to evolve into just another entitlement program.

On the point that the gentleman was trying to make.... I totally agree that those with substantial assets should not receive SNAP, or ACA subsidies, or other such benefits intended for the "needy"... but that is not the way those programs are designed.... I suspect in part because of the perceived difficulties in admnistering compliance.

However, IMO that compliance issue could be solved very easily by having a question on the program application along the lines of is your net worth greater than $x? Those who answer yes get benefits... those who answer no do not... and those who answer yes are subject to random audit and if you answer yes falsely then you go to jail for up to a year.

P.S. If I had done what the guy did... instead of saying that I increased my charitable giving by the amount received I would have handed the state treasury a check equal to the benefits that I received plus interest since then the "payback" would be verifiable.
As you know many people on this site including myself manages their income for ACA purposes.
They could/should change the rules to resolve this issue, but guessing that the overall population that uses this concept are very low in percentage terms and it would open up asset means testing which is not used for other programs.
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Old 04-12-2018, 02:52 PM   #7
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I agree... other than Medicaid LTC I can't off hand think of any programs that directly test assets... others mayhave an indirect asset test in that if your total income exceeds certain thresholds then your benefits are reduced or you pay more (like Medicare Part B premiums).... and in most cases you would need substantial other assets to trip over the income thresholds.

That said, I think it is hard to defend someone with $1 million or even with $100k of financial assets receiving SNAP benefits or ACA subsidies... so if they were to add such a constraint it wouldn't bother me... but until they do if people want to manage their income to qualify then I think that is fair game.
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Old 04-12-2018, 03:21 PM   #8
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Not many will abuse the program unless they really need the help. $300/mo for two adults is helpful if their need is significant, but it's not a windfall. I don't understand why it took 19 months "to prove a point".
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Old 04-12-2018, 03:34 PM   #9
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Not many will abuse the program unless they really need the help. $300/mo for two adults is helpful if their need is significant, but it's not a windfall. I don't understand why it took 19 months "to prove a point".


Thinking the same thing.....
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Old 04-12-2018, 03:35 PM   #10
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I wonder what Roth conversion benefits he missed out on during this 19 month experiment?
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Old 04-12-2018, 03:41 PM   #11
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"He said receiving the food stamps would do more to prove that some people get food stamps when they do not need them than if he just said it without the experience.?"

He only proved that one couple got food stamps when they didn't need them.
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Old 04-12-2018, 03:47 PM   #12
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No, I think he proved much more than that.... he proved... or perhaps rather, demonstrated.... that ignoring assets results in a risk that people who we generally would not think should get this SNAP benefit for the needy and game the system. If qualification is based on income then many folks with substantial taxable account savings could easily qualify.
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Old 04-12-2018, 04:14 PM   #13
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No, I think he proved much more than that.... he proved... or perhaps rather, demonstrated.... that ignoring assets results in a risk that people who we generally would not think should get this SNAP benefit for the needy and game the system. If qualification is based on income then many folks with substantial taxable account savings could easily qualify.
That risk never needed proof, any more than the risk of people manipulating their MAGI in order to get ACA subsidies needs proof, of the risk of people performing back-door Roth conversions to minimize future taxes and RMDs needs proof.
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Old 04-12-2018, 04:19 PM   #14
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Perhaps it is obvious to you... and to many here... but not to the average legislator or wo/man on the street.
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Old 04-12-2018, 04:32 PM   #15
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i think there should be asset tests for the ACA also.
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Old 04-12-2018, 04:37 PM   #16
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People usually will do what they are financially incentivized to do. If you want to change behavior, change the financial incentives by changing the law. But don't whine when people follow the law, just because you don't think they "should".
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Old 04-12-2018, 04:45 PM   #17
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How many people could actually do this?
You have to be younger than 70 so you are not collecting Social Security.
You have to have enough assets in exactly the right form to use to pay living expenses.
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Old 04-12-2018, 04:50 PM   #18
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I understand those who say taking or applying for ACA should involve asset testing and I don't really disagree. The problem I potentially see, is for someone like myself, who maybe would not qualify if my assets are too high for the ACA, how else could I get health care since it went away when I retired and I am too young for medicare?

If I would be locked out, I wouldn't be alone, and then a lot of people would either be knocking on their representatives doors demanding a solution or many people would be forced back into the work force.
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Old 04-12-2018, 05:00 PM   #19
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How many people could actually do this?
You have to be younger than 70 so you are not collecting Social Security.
You have to have enough assets in exactly the right form to use to pay living expenses.
This link suggests that there is a resource hurdle... perhaps MN is different and does not have one. For those states that don't use resources as a hurdle, early retirees who live off of taxable savings might qualify.... we probably could have before I started my pension but I would have been giving up doing no/low cost Roth conversions so it would not have been worth it.

https://eligibility.com/food-stamps

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Determine your household resources or assets. You may have $2,250 in countable resources, such as a bank account. If at least one person is 60 years old or older, or is disabled the household may have $3,500 in countable resources. Resources do not include SSI, TANF and in most states vehicles.
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Old 04-12-2018, 06:01 PM   #20
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I agree... other than Medicaid LTC I can't off hand think of any programs that directly test assets... others mayhave an indirect asset test in that if your total income exceeds certain thresholds then your benefits are reduced or you pay more (like Medicare Part B premiums).... and in most cases you would need substantial other assets to trip over the income thresholds.

That said, I think it is hard to defend someone with $1 million or even with $100k of financial assets receiving SNAP benefits or ACA subsidies... so if they were to add such a constraint it wouldn't bother me... but until they do if people want to manage their income to qualify then I think that is fair game.
On SNAP I agree. SNAP is public assistance.

Following this logic on ACA is it wrong in your view for a high net worth individual to pay no or low income taxes?
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