Obamacare and Health Ins Rates in CA

[martyp]

Here is an interesting article about expected premiums in CA under Obamacare. Could it be that competition and transparency works?

Unexpected Health Insurance Rate Shock-California Obamacare Insurance Exchange Announces Premium Rates - Forbes

 

[pb4uski]

Just keep in mind that these lower than expected rates are simply the insurers best guesses as to what is needed in an Obamacare world to cover claims, overhead and profit and have numerous uncertainties embedded within them. If their guesses are good, then rates will stabilize, if not then 2015 rates will reflect any differences.

It is much too early to tell.

To me its sort of like LTC insurance. As a new product the initial premiums were based on educated guesses and the carriers found out their crystal ball was wrong and increased rates as they adjusted the assumptions implicit in the premium.

 

[explanade]

There are going to be big ad campaigns this summer from both sides, urging people to enroll or not enroll.

This probably won't apply to people at ER, since they tend to educate themselves on how health care costs would affect retirement, so they've been paying attention.

But apparently the fight will be over the less-informed, because enrollment numbers will be part of the talking points of the 2014 elections. Plus, the more people are enrolled, the efforts to repeal or stall or block implementation in various states lose momentum.

 

[photoguy]

There are going to be big ad campaigns this summer from both sides, urging people to enroll or not enroll.

Can you clarify who would be funding ads NOT to enroll? or do you mean ads by one insurance company saying don't enroll in X as our plan is better?

 

[explanade]

Heard it on a podcast. Basically conservative groups will try to stall or block implementation, try to prevent it from becoming successful.

The administration will try to reach out to black and hispanic males -- apparently two substantial segments of the uninsured.

Of course some Republican governors and state legislatures are also trying to block efforts. For instance, Texas is refusing $7 billion in funds which would go to cover the poorer segments of the population.

 

[MichaelB]

The PPACA is in implementation stage, so why don't we skip the finger pointing part and stay focused on things we need to do to take advantage of it.

 

[Hawk50s]

Looking forward to the quotes on the Minnesota Exchange later this year.

 

[Beryl]

Looking forward to the quotes on the Minnesota Exchange later this year.

Moi aussi but in Colorado. I'm currently paying 9K/year (healthy, single, no smoking) to my MegaCorp's retiree plan (using a Future Health Account that will run out in less than 4 years). Based on my minuscule pension and the Kaiser website, it should be only 4K out of my pocket under PPACA (6K without credits). Waiting to see if MegaCorp will let us out or kick us out so government credits will pick up the overage.

 

[MichaelB]

Moi aussi but in Colorado. I'm currently paying 9K/year (healthy, single, no smoking) to my MegaCorp's retiree plan (using a Future Health Account that will run out in less than 4 years). Based on my minuscule pension and the Kaiser website, it should be only 4K out of my pocket under PPACA (6K without credits). Waiting to see if MegaCorp will let us out or kick us out so government credits will pick up the overage.

If your cost for the employer provided insurance is greater than 9.5% of your MAGI and your income is less than 4x the FPL you should be eligible to use the state exchange and qualify for premium assistance even if the retiree policy continues.

edit: see this flowchart http://www.naic.org/documents/committees_b_consumer_information_130319_flow_chart.pdf

 

[Beryl]

If your cost for the employer provided insurance is greater than 9.5% of your MAGI and your income is less than 4x the FPL you should be eligible to use the state exchange and qualify for premium assistance even if the retiree policy continues.

edit: see this flowchart http://www.naic.org/documents/committees_b_consumer_information_130319_flow_chart.pdf

I'm trusting this is the case as my income is definitely less than 4x the FPL. This is the first time I've ever been eligible for "government assistance" and it feels really weird but nice at the same time.

 

[Malcolm2]

The subsidy issue is a mess. Many more folks are planning (hoping) for government assistance than the system was designed for - especially now as verification has been deferred.' This includes some planning to ER and engineer their income down to get a subsidy. Who will pay for this? Seems a 'Tragedy of the Commons' issue.

I can see why most young people who pass on the expense of health insurance now will continue to do so. Two new college grads told me they don't plan to sign up to 'fund another entitlement.' Why should they? Although I would likely benefit if they do, I would certainly not If I was their age either, and feel uneasy with the burden shift that would be required.

 

[MichaelB]

How unique for your friends. Most new college grads are still on their parents policies (until age 26) and their incomes are so low they qualify for subsidy.

Income verification has not been deferred. From HHS Myth vs. Fact: Health Insurance Marketplace on Track | HHS.gov/healthcare

MYTH: The Marketplace won’t check income information submitted by individuals.

FACT: No matter which type of Marketplace is operating in a state, the Marketplace will always check the income information submitted by individuals against electronic income data sources such as tax filings, Social Security data, and current wage information. In most circumstances, we will request additional documentation from all affected individuals, such as when an individual does not have a tax return on file and attests to an income significantly below current wage data.

We will request additional documentation from a random sampling of individuals only in the specific circumstance when:

Current income information is not available;
There is a significant discrepancy between the income reported on an available tax return and the income provided by the individual; and
The individual cannot provide an acceptable explanation for this discrepancy.

What source documents that "many more folks are planning (hoping) for government assistance than the system was designed for? This is one area where there seems to be a pretty good assessment of how many people need coverage.

 

[Malcolm2]

Income verification has not been deferred. From HHS Myth vs. Fact: Health Insurance Marketplace on Track | HHS.gov/healthcare

Correction, I intended to refer to the verification of the people who can claim a subsidy when they already have employer coverage and thus would not otherwise qualify, although reporting by the WP indicated that delayed oversight of income shifts ( frequently called 'engineering income') also applies. These have been delayed per the WP and many other accounts: It’s not just the employer mandate: Three Obamacare delays you haven’t heard about.
Review & Outlook: ObamaCare's 'Liar' Subsidies - WSJ.com

 

[Arifriekinel]

How unique for your friends. Most new college grads are still on their parents policies (until age 26) and their incomes are so low they qualify for subsidy.

That's what I've seen too. I don't know a single person my age on their own plans, nonetheless sticking their noses up at others' choices to participate.

 

[rbmrtn]

More useless commentary from Avik Roy. The applicant doesn't actually get the subsidy it goes to the insurance company, but you are responsible for paying it back if you don't meet the requirements. The verification is no different from anything else reported on your tax returns.

 

[GoodWishes]

The PPACA is in implementation stage, so why don't we skip the finger pointing part and stay focused on things we need to do to take advantage of it.

+1

I hope this will work out over time. I feel that trying anything is better than nothing given how the current system works.

 

[pb4uski]

Correction, I intended to refer to the verification of the people who can claim a subsidy when they already have employer coverage and thus would not otherwise qualify.....

That should be easy to verify given one will know the applicant's employer from their W-2 and can find out if the employer offers HI coverage (via either a database of employers that offer or do not offer health insurance or even a call by an examiner to the employer).

I do hope that they institute a vigorous set of random checks and are hard with those who falsify their application information.

 

[MichaelB]

Correction, I intended to refer to the verification of the people who can claim a subsidy when they already have employer coverage and thus would not otherwise qualify, although reporting by the WP indicated that delayed oversight of income shifts ( frequently called 'engineering income') also applies. These have been delayed per the WP and many other accounts: It’s not just the employer mandate: Three Obamacare delays you haven’t heard about.
Review & Outlook: ObamaCare's 'Liar' Subsidies - WSJ.com

This was discussed in detail in this (now closed) thread http://www.early-retirement.org/forums/f38/employers-get-a-delay-in-providing-insurance-67322.html including the Sarah Kliff article (and other articles by her) The WSJ link is not to a news item, it is an opinion piece, and they have made their opinion clear already. Nothing new here, also nothing related to the thread topic.

 

[M Paquette]

The subsidy issue is a mess. Many more folks are planning (hoping) for government assistance than the system was designed for - especially now as verification has been deferred.' This includes some planning to ER and engineer their income down to get a subsidy. Who will pay for this? Seems a 'Tragedy of the Commons' issue.

So, you believe the verification for subsidies has been 'deferred'? Far be it from me to challenge someones belief system, but please do let us know how it works out when you file your 2014 tax return.

For everyone else... Verification is definitely in place. If you do manage to juggle things so you get a subsidy, but your 2014 income is high enough to render you ineligible for the subsidy amount, you'll get to pay it back in April 2015 when you file your 2014 tax return.

Personally, I don't have any interest in artificially impoverishing my family to maintain eligibility for an insurance subsidy. The 'full freight' rates are already cheaper than what I currently pay (what with being in the high priced 55 and up tiers), so I'll happily take the rate break (from the 3X maximum age rate differential) and the guaranteed issue and recission-proofing. The cost is already in my budget.

When you take financial advice from a stranger in a newspaper or on the Internet, you may want to double check that information. Especially if that stranger is grinding an axe. Most especially if you are the one with their neck stretched across that big wood block...

 

[Malcolm2]

So, you believe the verification for subsidies has been 'deferred'? Far be it from me to challenge someones belief system, but please do let us know how it works out when you file your 2014 tax return.

For everyone else... Verification is definitely in place. If you do manage to juggle things so you get a subsidy, but your 2014 income is high enough to render you ineligible for the subsidy amount, you'll get to pay it back in April 2015 when you file your 2014 tax return.

Personally, I don't have any interest in artificially impoverishing my family to maintain eligibility for an insurance subsidy. The 'full freight' rates are already cheaper than what I currently pay (what with being in the high priced 55 and up tiers), so I'll happily take the rate break (from the 3X maximum age rate differential) and the guaranteed issue and recission-proofing. The cost is already in my budget.

When you take financial advice from a stranger in a newspaper or on the Internet, you may want to double check that information. Especially if that stranger is grinding an axe. Most especially if you are the one with their neck stretched across that big wood block...

Of course the opposite of 'grinding an axe' is intentionally ignoring the realities. I usually don't take advice solely from strangers on the internet or a single news article, or for that matter someone on a ER blog. However personal attacks are rather useless, don't you think?? A free exchange of ideas is valuable. I don't think that anyone here (especially myself) is an expert on the ACA, so there is room for civilized disagreement, especially as CA is my home state and that is the topic here.

Good for you that you don't intend to game they system, however many will. Based on years of exactly that going on with Medicaid and Food Stamps(especially in CA), I think that is a fair assessment.

 

[steelhead]

This includes some planning to ER and engineer their income down to get a subsidy.

Since when did tax planning become so objectionable?

Who will pay for this?

And who pays for the tax subsidy granted to those receiving employer provided insurance or the many other tax subsidies/expenditures? Most people (myself included) who get/got an employer provided HI tax subsidy don't find the question "who will pay for this" too problematic because a person's view about whether a subsidy is good or bad depends largely on whether the person is among those getting it.

 

[Mulligan]

Since when did tax planning become so objectionable?

And who pays for the tax subsidy granted to those receiving employer provided insurance or the many other tax subsidies/expenditures? Most people (myself included) who get/got an employer provided HI tax subsidy don't find the question "who will pay for this" too problematic because a person's view about whether a subsidy is good or bad depends largely on whether the person is among those getting it.

You might be onto something Steel... Upon reflection, my complaints about getting bent over the barrel with Obamacare would disappear if I could write my premium costs off my taxes!

 

[modhatter]

What income will they be looking at exactly. Is it everything reported on your income tax return (interest income, dividends, rent etc.) as well as wages from employment.

Curious, because my son doesn't work, but receives a small income from CD's and now has his condo rented and living with me. (No earned income)