Should have chosen an ACA plan and not COBRA

[Earl E Retyre]

My COBRA eligibility ended in the middle of the year and so I switched to an ACA healthcare plan. I did a little bit of consulting this year for some blow your dough money. In doing my taxes, I now learned that if you are self-employed, you can deduct ACA health insurance premiums but you cannot deduct premiums you paid for COBRA health insurance. While they are both just medical premiums to me, I guess the rationale from the IRS is that COBRA is associated with my former employer's business and not mine. Maybe that is obvious to most, but I was unaware. So, I would have been better off if I had chosen an ACA all year and not been on COBRA at all.

The other lesson learned is that with the ACA subsidy, my monthly healthcare premiums would have been much lower when compared to my COBRA premiums. Since my COBRA plan was a PPO and ACA is an HMO, I assumed it was a much better plan and worth paying a bit more. But, now that I have been on an HMO, I do not really see much difference. We cannot self refer to see medical specialists but would likely ask our PCP for a referral regardless.

In hindsight, I would have saved several thousand if I had just chosen an ACA plan all year.

 

[Luck_Club]

My COBRA eligibility ended in the middle of the year and so I switched to an ACA healthcare plan. I did a little bit of consulting this year for some blow your dough money. In doing my taxes, I now learned that if you are self-employed, you can deduct ACA health insurance premiums but you cannot deduct premiums you paid for COBRA health insurance. While they are both just medical premiums to me, I guess the rationale from the IRS is that COBRA is associated with my former employer's business and not mine. Maybe that is obvious to most, but I was unaware. So, I would have been better off if I had chosen an ACA all year and not been on COBRA at all.

The other lesson learned is that with the ACA subsidy, my monthly healthcare premiums would have been much lower when compared to my COBRA premiums. Since my COBRA plan was a PPO and ACA is an HMO, I assumed it was a much better plan and worth paying a bit more. But, now that I have been on an HMO, I do not really see much difference. We cannot self refer to see medical specialists but would likely ask our PCP for a referral regardless.

In hindsight, I would have saved several thousand if I had just chosen an ACA plan all year.

So sorry I didn't get a chance through my taxes to subsidize your lifestyle more.

 

[Aerides]

I went with cobra even though all the above was true for me (small business, lower cost with subsidies, etc.). My main reason was continuity, and for many, swapping mid-year means a reset on their deductible so it can even out.

And um Luck-Club, I paid plenty enough taxes in my working days to be very comfortable on my contributions to the subsidies I now receive, as I'm sure many of us here are, so let's not make THAT a focus... dead horse, etc.

 

[RetiredAt55.5]

I paid plenty enough taxes in my working days to be very comfortable on my contributions to the subsidies I now receive, as I'm sure many of us here are, so let's not make THAT a focus... dead horse, etc.

+1

 

[pb4uski]

+2. But we don't get ACA subsidies so it's a moot point.

 

[ziggy29]

So sorry I didn't get a chance through my taxes to subsidize your lifestyle more.

We can all pick and choose our data points. I don't have any children but we pay as much in property taxes as someone who has six kids to educate. To be honest, I used to be bitter about that until I decided to look at school taxes NOT as used to educate other people's kids (which still has value for me), but as a way to repay the cost of my *own* education which enabled me to succeed enough to be more or less retired at age 53. When I thought about it that way, it made it a lot easier to accept.

Life is a lot happier when you find ways to see the glass as half-full.

 

[youbet]

I don't have any children but we pay as much in property taxes as someone who has six kids to educate. To be honest, I used to be bitter about that until I decided to look at school taxes NOT as used to educate other people's kids (which still has value for me).

+1

Yep Zig, having other peoples' kids acquire the skills and abilities you'll need to benefit from during your life is a good thing. Investing in those kids frequently pays off. Although, admittedly, it might be hard to draw a direct connection between each dollar you spend and the benefit you reap.

I had cataract surgery on my second eye this morning (all went well, thanks) and had this very thought while lying there waiting to be taken to the laser. For the preceding hour or so, a parade of well trained and very professional appearing young people came in and out doing things like placing an IV, putting drops in my eye, going over the paperwork and explaining the procedure that was about to take place. Then young techs/nurses worked with the doc during both the laser and scalpel phases of the work.

I actually pictured those young folks attending some of our local high schools, community colleges and four year colleges acquiring the skills I was partaking of. And I was glad they seemed so well trained and talented at their jobs.

 

[Bir48die]

My Cobra was better and cheaper than open market insurance by far. Will never get ACA subsidies. However insurance costs are worth it just to be retired.