2016 Exchange Rates- OUCH

[Mulligan]

I realize this is anecdotal, but here is an example of ACA not working. A friend of mine was complaining that his HI premium was going to increase from $400/month to $800/month in 2014. So he dropped his HI. He also mentioned that he had to pay a $900 penalty for 2014. With a 1% of income penalty, I estimate his MAGI at 90k. I have told him that the penalty will go up for the 2015 tax year. He was already aware of this. As background, He and his wife are self employed. They are both in their mid 50s. They are both pretty healthy and don't smoke.

He's in a bad spot income wise, too much for subsidies and too little for the premium to still be a significant part of his income.

I don't know what to tell my friend. I wish he and his wife would get HI. But, I can't be pushy about it. I just hope they don't get sick or injured.

Thanks for listening.

If he is hell bent on not buying health insurance, tell him to relax. Effectively THERE IS NO PENALTY for not having health insurance. There are many ways to get exempted which he may qualify for but the one that trumps all is this......Do not have a tax refund. This is the only way they can seek recourse in payment is by confiscating your tax refund. They cannot garnish your wages or take you to court.
I have already been screwed over many times by this Act (others have benefitted greatly I am aware of, but not me) and if a death spiral occurs, I assure you I will not be the last healthy person paying with all the unhealthy people. And I sure as hell ain't paying the penalty if I don't have the insurance as the law was basically written intentionally only for dumb people to pay the tax.


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[marko]

Why would you think that? They are just determining subsidies for some states... the rest of the law would still be the law...

My understanding is that the financial model hinges on nationwide participation (everyone being insured).

If the subsidies end, many people will go back to being uninsured. The law would collapse under its own weight.

Having said that, I could be misinformed; there seems to be a lot of misinformation about how this all works....

 

[Texas Proud]

My understanding is that the financial model hinges on nationwide participation (everyone being insured).

If the subsidies end, many people will go back to being uninsured. The law would collapse under its own weight.

Having said that, I could be misinformed; there seems to be a lot of misinformation about how this all works....

I would agree that the law as written would be difficult for some to afford insurance.... and many insurance companies would opt out of providing plans.... but the law will not be repealed by the decision.... it will still be 'the law'.... it cannot technically collapse under its own weight... someone will have to actually repeal the law or make changes to it so it works....

 

[MichaelB]

Legally, each state is a separate insurance market. So, an insurance policy offering in Connecticut, for example should be completely unaffected by anything happening, for example, in the insurance market in Texas.

 

[samclem]

Legally, each state is a separate insurance market. So, an insurance policy offering in Connecticut, for example should be completely unaffected by anything happening, for example, in the insurance market in Texas.

But, if sick people do as Fermion has suggested--flow from non-exchange states to those that have state-run exchanges, it could conceivably have an impact. As a practical matter, I don't think there will be enough of this to have a huge impact, but it could make those "lifeboats" take on more water, even if it doesn't sink them.

 

[MichaelB]

But, if sick people do as Fermion has suggested--flow from non-exchange states to those that have state-run exchanges, it could conceivably have an impact. As a practical matter, I don't think there will be enough of this to have a huge impact, but it could make those "lifeboats" take on more water, even if it doesn't sink them.

This is getting a bit hypothetical for me. Setting up new state residency is not always simple or quick, we haven't seen that happen for Medicaid.

We are speculating what insurance companies will do. Their business is to sell policies and this uncertainty must be a serious challenge to their business model. Even though cross policy subsidization is not allowed, some of them may have done so anyway and this only further complicates their strategy for 2016.

 

[Texas Proud]

But, if sick people do as Fermion has suggested--flow from non-exchange states to those that have state-run exchanges, it could conceivably have an impact. As a practical matter, I don't think there will be enough of this to have a huge impact, but it could make those "lifeboats" take on more water, even if it doesn't sink them.

I would think this will not happen.... welfare is different in the states... and people do not seem to move to the states with the best welfare system just to get more money....

And then the cost of living in the new state might be much higher than the old state....


I still think that the insurance companies will continue to sell policies... as long as they are making a profit they have no reason to stop... you do not have to buy a policy through the exchange.... that is only if you want the subsidy...

A lot of speculation for something that might not happen... and if it does happen I bet there will be a fix... and if neither of these things happen... it will be awhile before the crash and burn.... so I got time on my side to worry about what to do later...

So far today is a good day so I will not worry...

 

[aaronc879]

I haven't seen this mentioned yet. Does anyone know if our subsidies received so far this year would have to be paid back if the SC rules against them? Say I received a $300/mo subsidy Jan-Jun then the SC rules against them, does that just affect things from that date on or for the whole year, or not until next year's enrollment? I don't want to pay back $1800. That's more than 10% of my income.

 

[M Paquette]

Some additional 2016 rate data is now available.

More here: (PDF) http://avalere-health-production.s3...ate_Increases_Press_Release_edits_revised.pdf

View attachment 21885

LCS is the Lowest Cost Silver plan. SLS refers to the Second Lowest Silver plan.

 

[Texas Proud]

I haven't seen this mentioned yet. Does anyone know if our subsidies received so far this year would have to be paid back if the SC rules against them? Say I received a $300/mo subsidy Jan-Jun then the SC rules against them, does that just affect things from that date on or for the whole year, or not until next year's enrollment? I don't want to pay back $1800. That's more than 10% of my income.

Nobody can answer this question until there is a ruling... one Justice suggested that they delay the ruling until the end of the year (I would assume if they ruled against them)....

That would make it seem that you would not have to pay back anything you have received... but there could be a big surprise....

 

[Ian S]

I haven't seen this mentioned yet. Does anyone know if our subsidies received so far this year would have to be paid back if the SC rules against them? Say I received a $300/mo subsidy Jan-Jun then the SC rules against them, does that just affect things from that date on or for the whole year, or not until next year's enrollment? I don't want to pay back $1800. That's more than 10% of my income.

I recall reading that it would not be retroactive but I suppose it would depend on how the decision is worded. Most legal scholars seem to believe that the Administration position is supported by legal precedent and that a victory by the plaintiffs would be a major change in that area of settled law. I hope those legal scholars are right.