Supreme Court to hear arguments tomorrow on ACA Subsidy

[modhatter]

Tomorrow the Supreme Court will begin hearing arguments about the legality of subsidies being offered to individuals who have had to purchase their insurance via the government exchange website. A ruling is not expected until June.

I'm wondering if some members here are delaying their early retirement plans until a ruling is reached. Is it a consideration in your plans?

[samclem]

It has no direct impact on DW and I.

If the court rules that the present interpretation of the law is invalid, then there's still many miles to go before things are finally decided and the facts on the ground change. States can rapidly decide to set up an exchange (you can bet the present federal exchange will just be papered-over with logos of the various states in a quick makeover of the front end--the federal government will surely want to make it work.). There are already plans afoot to offer alternative legislation for states that don't want to have the kind of exchanges now offered, in a different construct.

If anyone is waiting to retire based on this, when would it end? There's going to be an election in 2016 that could well have an impact on this issue, should that also influence their plans?

[ERhoosier]

This next decision will have no impact at all on me either. Make just a bit too much in investment income to qualify for subsidy anyway. ACA ended up being minor net negative for my FIRE plans as Exchange plans for DW & I ended up being more $$$ than my state's old hi-risk pool with MUCH narrower provider networks. I went back to w#rk for post-COBRA HI....just like folks did pre-ACA.
FWIW- My guess is that SCOTUS will uphold & find fed exchange is functional equivalent of state exchange under ACA. If they rule otherwise, I agree with that most states will quickly decide to use fed template under their own names.....fed exch "papered-over" with state logos as samclem aptly put it .

[modhatter]

Quote:

Originally Posted by samclem It has no direct impact on us. If the court rules that the present interpretation of the law is invalid, then there's still many miles to go before things are finally decided and the facts on the ground change. States can rapidly decide to set up an exchange (you can bet the present federal exchange will just be papered-over with logos of the various states in a quick makeover of the front end--the federal government will surely want to make it work.). There are already plans afoot to offer alternative legislation for states that don't want to have the kind of exchanges now offered, in a different construct. If anyone is waiting to retire based on this, when would it end? There's going to be an election in 2016 that could well have an impact on this issue, should that also influence their plans?

Well, I think the longer is stays in place, the more unlikely it would be to overturn it (provided it survives 2016). There is something to be said for longevity in cases like this

For people retiring early who are very well set financially, or obviously have retirement medical insurance through their former employer, it is obviously not a significant factor.

But for those still wavering on "if" they can retire early or not, I think it might be a strong consideration.

[Fermion]

If the subsidy is nixed the penalty for not having health insurance will be nixed. You can then just go back to a cheap catastrophic plan which doesn't cover pregnancy for a 60 year old man. ER continues.

[wrigley]

Quote:

Originally Posted by Fermion If the subsidy is nixed the penalty for not having health insurance will be nixed. You can then just go back to a cheap catastrophic plan which doesn't cover pregnancy for a 60 year old man. ER continues.

Do those plans still exist? I thought they were all gone and replaced with plans that are specifically spelled out by the ACA?

Mike

[EastWest Gal]

It amazed me how many uninsured pregnant (well, postpartum) young women still had no health insurance. They heard their friends couldn't afford the premiums so they didn't apply. These are women who walk around with the latest iPhone! They could apply from their phone in about 15 minutes.

I started explaining the subsidies and that there is a penalty for not having insurance.

However, there were health benefits to babies as more women got good prenatal care due to being on their parents' plan and prematurity rates started dropping after the early provisions kicked in a few years ago.

I will make too much money due to my last check being received in January and too much investment income. This is a problem I don't mind having.

Let's just hope the SCOTUS doesn't gut the whole thing.


Sent from my iPhone using Early Retirement Forum

[Mo Money]

Quote:

If anyone is waiting to retire based on this, when would it end? There's going to be an election in 2016 that could well have an impact on this issue, should that also influence their plans?

+1

I am COBRAing for a while anyway because my excellent former empl*yer's health plan is much less expensive than a platinum plan under the ACA. But I decided all the politics surrounding this issue would not stop me from living my dream. If I had to, I'd move to a state where the coverage was available.

So I retired last week, politics be dam*ed.

[jabbahop]

we won't qualify for the subsidy anyway so I am not worried about that but am worried about this quote in a CCN.money article. I haven't looked into the issue enough to know whether this is scare tactics or fact. Given my recent cancer treatment, I am not excited about going without or on catastrophic.

What could kill Obamacare - Mar. 3, 2015

" It's likely that millions of enrollees would drop coverage after losing their assistance, experts said. Insurers would stop offering coverage or be forced to hike rates - by more than 250% by one estimate. Many remaining customers could leave the market after their premiums soar.

"The market would likely melt down very quickly," said Larry Levitt, senior vice president at the Kaiser Family Foundation. "The individual insurance market would be unable to function."

Hopefully worry about nothing.

[Fermion]

Quote:

Originally Posted by wrigley Do those plans still exist? I thought they were all gone and replaced with plans that are specifically spelled out by the ACA? Mike

I mean if ACA is eliminated (either through subsidy elimination, which would essentially kill it or in 2016).

I believe the only reason the catastrophic plans were replaced was because of ACA and the penalties. If healthcare becomes unaffordable because of elimination of subsidies, the penalties by law have to go away. Four femtoseconds later the insurance companies will bring back the catastrophic plans.

[2B]

This was beaten to death in a prior thread and the answer was that every state that didn't spend tens of millions (billions?) to get their own stand alone site to work (Oregon did but didn't) could simply put a state portal on the federal site.

It will be an interesting ruling because the wording in the law is very explicit. It must be a state exchange to get the subsidy. This was obviously not what the people that voted for the bill expected to be an issue because they assumed every state would rush to not only approve Medicaid for all but also set up a state exchange. This didn't happen. It's also very possible that the same states that did not extend Medicaid may also not put up a simple portal.

[wrigley]

Quote:

Originally Posted by Fermion I mean if ACA is eliminated (either through subsidy elimination, which would essentially kill it or in 2016). I believe the only reason the catastrophic plans were replaced was because of ACA and the penalties. If healthcare becomes unaffordable because of elimination of subsidies, the penalties by law have to go away. Four femtoseconds later the insurance companies will bring back the catastrophic plans.

It's going to be INTERESTING!

Mike

[Fermion]

One interesting twist may be that our current home state (Washington) becomes much more attractive for lower income early retirees over Texas and Florida. No income tax and a state run exchange, so no issue with subsidy payments.

This is assuming the whole system did not collapse when 48 billion dollars is withheld each year from the 39? states without a exchange.

[donheff]

Quote:

Originally Posted by Fermion I mean if ACA is eliminated (either through subsidy elimination, which would essentially kill it or in 2016). I believe the only reason the catastrophic plans were replaced was because of ACA and the penalties. If healthcare becomes unaffordable because of elimination of subsidies, the penalties by law have to go away. Four femtoseconds later the insurance companies will bring back the catastrophic plans.

Things don't work like that. If subsidies are gone that is all that changes. insurance companies would be hammered but couldn't just go back to previous practices. until the law was changed they would have to offer the same ACA plans they do now but wouldn't have takers except the sick. Costs would spiral, insurers would bail, etc . How quickly do you think this Congress could agree on a compromise to fix the problem that the President would sign?

[Corporateburnout]

In our case we made our decision to retire when we had "Romney care" and since our state has its own exchange the ruling will not affect us. We are currently purchasing insurance through the exchange and if the ACA collapses which is unlikely the state will go back to our state mandated health insurance coverage.

[Fermion]

Quote:

Originally Posted by donheff Things don't work like that. If subsidies are gone that is all that changes. insurance companies would be hammered but couldn't just go back to previous practices. until the law was changed they would have to offer the same ACA plans they do now but wouldn't have takers except the sick. Costs would spiral, insurers would bail, etc . How quickly do you think this Congress could agree on a compromise to fix the problem that the President would sign?

Things happen a lot faster when a lot of money is involved. Look at what has happened to drilling stocks over a period of a couple of months when oil fell from $110 to $50.

Something would change in less than one year...insurance companies would not sit around longer than that when their profits drop 30%.

Note I am not against subsidies as I think we will qualify for a hefty one if ACA stays viable. I would like the ability to go back to a simple cheap catastrophic plan though if the subsidy option is taken away.

[samclem]

Quote:

Originally Posted by EastWest Gal I started explaining the subsidies and that there is a penalty for not having insurance.

There's "sort of" a penalty. The penalty was supposed to rise in 2015, but is now being pushed back for some people who are allowed to claim they didn't know about the penalties. The application of the law has been subject to many delays and people betting that they won't pay a penalty may prove to be smarter than we are. And, penalties only apply if you file a tax return and fill it out honestly. Some people do not.

Quote:

Originally Posted by EastWest Gal Let's just hope the SCOTUS doesn't gut the whole thing.

That is a hope some people have. The SCOTUS has a job to do.

[utrecht]

I hope SCOTUS does gut the whole thing. It is one of the worst written, complex and impossible to understand laws that's ever been written. We have thread after thread here because nobody knows exactly whats what. The only thing close to this bad is the tax code. It doesnt have to be this complicated.

[Fermion]

Quote:

Originally Posted by utrecht I hope SCOTUS does gut the whole thing. It is one of the worst written, complex and impossible to understand laws that's ever been written. We have thread after thread here because nobody knows exactly whats what. The only thing close to this bad is the tax code. It doesnt have to be this complicated.

But the tax code has been bad and getting worse for decades and nothing has been done to fix it. Healthcare was bad, do we really want it gutted and then decades of it getting even worse? What confidence do you have that they would be able to quickly fix healthcare if ACA is gutted?


Edit: I mean is there any chance that we now just go to single payer like almost every other civilized nation in the world?

[tfudtuckerpucker]

Quote:

Originally Posted by wrigley Do those plans still exist? I thought they were all gone and replaced with plans that are specifically spelled out by the ACA? Mike

We bought this type of plan last year, from Assurant Health. It was much cheaper for us, but was not Obamacare-approved (didn't cover pregnancy LOL, and substance abuse), so they warned us that we could be fined for not having "adequate" insurance.