Thoughts on using ACA if you can afford private insurance?

The ACA saved us. I had a pre existing condition, cancer, and DH had diabetes. When DH retired in 2011 he had a generous severance package but the insurance only lasted a year. We joined ACA in 2014, kept our doctors and chose a HD policy to contribute to our HSA. The deductible was $9000, way less than what it would cost to purchase a plan on the open market. Talk about means testing. My brother had a friend who had a large trust fund. His income was low so he qualified for the ACA. I think that's what upsets some. Billionaires can keep their income low, like Jeff Bezos. I'm certainly not going to complain because it helps so many.
 
Rianne said:
The ACA saved us. I had a pre existing condition, cancer, and DH had diabetes. When DH retired in 2011 he had a generous severance package but the insurance only lasted a year. We joined ACA in 2014, kept our doctors and chose a HD policy to contribute to our HSA. The deductible was $9000, way less than what it would cost to purchase a plan on the open market. Talk about means testing. My brother had a friend who had a large trust fund. His income was low so he qualified for the ACA. I think that's what upsets some. Billionaires can keep their income low, like Jeff Bezos. I'm certainly not going to complain because it helps so many.
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I think one of the greatest beneficiaries of the ACA were people who had to retire because of health reasons. Once the umbrella of company coverage fell away, they could be in dire straits in the old days.
 
It has also been said (though I have no idea of supporting data) that some whom the ACA freed of the health insurance handcuffs to their megacorp employer went on to do something entrepreneurial or philanthropic in their next phase of life.

But you ER.org old timers probably discussed all this 10 years ago.
 
I don't fit into that. At least I don't feel rich, but I'm just glad to not be poor and broke. I can do what I want, buy that newer car one of these times when I figure out what to get.

Enough money is enough. :)
 
Koolau said:
I hate to tell you this, but (for the most part) we here ARE the rich.
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True, though it’s so hard to accept that. I suspect that most of us in that group don’t think of ourselves in those terms.

A recent article on Yahoo Finance said that a net worth of $4 million puts you in the top 3.4% of Americans. Lots of folks here, myself included, are at that level. I definitely don’t consider us to be rich.
 
Somewhat subjective terms I guess. 50 years ago, $4Mil would have been rich for sure. Now, I think I'd go with well off. But other people might say $500k is rich. Those are the poor folks, if you are retirement age.

One guy I know a little mentioned he is 64 yo and his SS is $800 a month. I hope he is not trying to survive on that.
 
MC Rider said:
Somewhat subjective terms I guess. 50 years ago, $4Mil would have been rich for sure. Now, I think I'd go with well off.
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If that article I referenced is accurate and $4M is the top 3.4% of the population, that makes them (us) richer than 96.6% of Americans so I suppose it's all relative.
 
I retired back in 2017, and have used the ACA every year since then. I do a Roth conversion every year to ensure that I stay within the 30-40K AGI level to get the highest subsidy possible. I don't consider it gaming the system, because I would be doing the same thing with my brokerage account in utilizing capital gains to minimize AGI.
 
I'm signing up for ACA for the first time and just need 6 months until Medicare kicks in. My conundrum is whether to keep my income low for a sizable subsidy and forgo a Roth conversion next year. Alternative is to do a small Roth conversion and get a small subsidy.
 
momoney said:
I was telling a friend how you can use ACA to retire early if you have sufficient funds in a taxable account. You just need to do Roth conversions to the amount needed to qualify for ACA. He thought that was gaming the system because ACA is meant for people who can't afford insurance.

I feel like Medicaid is for people who can't afford insurance and ACA is affordable care? At least buying into ACA helps the insurance pool? After all they could limit who is able to participate by means testing? And what about two 55 year olds who made the same exact salary throughout their careers but one of them wasn't a saver? Why should the non-saver get ACA coverage but the other not get it?
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This is our plan.
Generate income w Roth conversions.
Just enough to control our ACA cost.
 
orbops said:
I retired back in 2017, and have used the ACA every year since then. I do a Roth conversion every year to ensure that I stay within the 30-40K AGI level to get the highest subsidy possible. I don't consider it gaming the system, because I would be doing the same thing with my brokerage account in utilizing capital gains to minimize AGI.
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Exactly
 
I didn't write the law but use it to the best of my ability. Would he not itemize on his 1040 if he qualified? It does feel a bit slimy, though. Particularly with the 'caid program for our dependent. But ACA insists we do.
 
GATime said:
I'm signing up for ACA for the first time and just need 6 months until Medicare kicks in. My conundrum is whether to keep my income low for a sizable subsidy and forgo a Roth conversion next year. Alternative is to do a small Roth conversion and get a small subsidy.
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Use this site to get an estimate on your premium and subsidy and decide which way will give you the most savings.
www.kff.org

Health Insurance Marketplace Calculator | KFF

The Health Insurance Marketplace Calculator, updated with 2025 premium data, provides estimates of health insurance premiums and subsidies for people purchasing insurance on their own in health insurance exchanges (or “Marketplaces”) created by the Affordable Care Act (ACA).
www.kff.org www.kff.org
 
disneysteve said:
So if I’m 52 and have a couple million in retirement accounts that I can’t touch until 59.5 that should disqualify me from getting affordable insurance? That makes no sense. Income, not assets, is what matters.
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pb4uski said:
Perhaps, but the government would probably end up paying more to administer and enforce whatever means testing criteria that was designed than they would save in ACA subsidies. Let's say that x% of households have over $1m in assets and y% don't have employer provided insurance and x% manage their income to capture ACA subsidies... by the time you multiply that all out it's a pretty small number and not worth bothering with. No to mention that people would not like disclosing all their assets info and it would require appraisals of real estate, businesses and farms owned, etc. A quagmire that isn't worth the effort.
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I would think a work requirement if not disabled would be a much easier way to gain much of the same effect, and I'd be all for that. That being said, I do have the option to qualify for medicaid by limiting my income and use my Roth account to live on, and I have no issue with that as these are the exact kinds of scenarios I did my Roth for in the first place. To gain flexibility to limit my taxes in an unknown future. I figure I better take the wins when they present themselves. The only question I need to research is whether quality of a fully subsidized silver plan would justify having to pay co-pays and deductibles for health care.
 
cat4ever said:
I would think a work requirement if not disabled would be a much easier way to gain much of the same effect, and I'd be all for that.
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That would actually be a bad idea. You don't realize how difficult and how long it takes for a lot of people to be considered disabled. That would also create a lot more expense and managing the program. They have it right the way it is now.

Who knows how long the ACA will be around, let alone the changes that allowed more people to get subsidies in recent years that people in this thread are expressing concerns of coming to an end. I take it one year at a time.
 
momoney said:
I was telling a friend how you can use ACA to retire early if you have sufficient funds in a taxable account. You just need to do Roth conversions to the amount needed to qualify for ACA. He thought that was gaming the system because ACA is meant for people who can't afford insurance.

I feel like Medicaid is for people who can't afford insurance and ACA is affordable care? At least buying into ACA helps the insurance pool? After all they could limit who is able to participate by means testing? And what about two 55 year olds who made the same exact salary throughout their careers but one of them wasn't a saver? Why should the non-saver get ACA coverage but the other not get
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I've had ACA since my employer laid off 98% of the company.
1st Y I paid $895 (and by pure (bad?) luck it saved me from medical bills in excess of $300,000. I've been healthy all my life, and saw my Dr. annually. Suddenly (and my Dr. says it can't be predicted) I wasn't healthy anymore. ACA saved my retirement (and house, and car)
2nd Y I paid around $750
3rd Y I paid around $685
Now I pay $420 - Which reflects my current income
I am curious about private individual insurance. Sorry for my ignorance but I didn't know that was an option.
 
momoney said:
I was telling a friend how you can use ACA to retire early if you have sufficient funds in a taxable account. You just need to do Roth conversions to the amount needed to qualify for ACA. He thought that was gaming the system because ACA is meant for people who can't afford insurance.

I feel like Medicaid is for people who can't afford insurance and ACA is affordable care? At least buying into ACA helps the insurance pool? After all they could limit who is able to participate by means testing? And what about two 55 year olds who made the same exact salary throughout their careers but one of them wasn't a saver? Why should the non-saver get ACA coverage but the other not get it?
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My experience with ACA is it is far from affordable if you cannot keep your income below 400% of the poverty level, or around $63K. Over that amount, the federal and state subsidies drop off rapidly. In our case, ACA was $1800 a month for a silver plan for two , a level needed due to pre-existing conditions. Deductibles were around $8K per person, with an out of pocket maximum of around $20K. Federal and state subsidies brought this down to around $400 a month. The catch is when you do your taxes, all income of any form counts-go over the limit, and the difference between unsubsidized and subsidized comes due as additional income tax to pay.

Using this example, just for the Fed: Worst case: $1800-$400 = $1400; $1400 x 12 months = $16,800 you owe to the IRS. Plus you may have paid thousands of dollars during the year towards the deductible. the This is worst case- I never hit the top end of the income limit and always ended up with some level of subsidy, but still had to pay back a whole bunch of money at the end of each year.

Luckily (??) I did not have many years of playing the income game, and now on Medicare. Might have to divorce the wife until she qualifies for Medicare, so she has a lower income and does not get hit with the payback.

Hope this helps.
 
timeismine said:
My experience with ACA is it is far from affordable if you cannot keep your income below 400% of the poverty level, or around $63K. Over that amount, the federal and state subsidies drop off rapidly. In our case, ACA was $1800 a month for a silver plan for two , a level needed due to pre-existing conditions. Deductibles were around $8K per person, with an out of pocket maximum of around $20K. Federal and state subsidies brought this down to around $400 a month. The catch is when you do your taxes, all income of any form counts-go over the limit, and the difference between unsubsidized and subsidized comes due as additional income tax to pay.

Using this example, just for the Fed: Worst case: $1800-$400 = $1400; $1400 x 12 months = $16,800 you owe to the IRS. Plus you may have paid thousands of dollars during the year towards the deductible. the This is worst case- I never hit the top end of the income limit and always ended up with some level of subsidy, but still had to pay back a whole bunch of money at the end of each year.

Luckily (??) I did not have many years of playing the income game, and now on Medicare. Might have to divorce the wife until she qualifies for Medicare, so she has a lower income and does not get hit with the payback.

Hope this helps.
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Considering you may not have been able to get insurance at all prior to the ACA with your pre-existing conditions, I’d still probably consider your numbers affordable.
 
Yea, it can be a big hit if you have significant income.... that happened to me last year as I got a big distribution from my company 401(k)... had to pay all the subsidy back...

HOWEVER, I did have insurance on my DW and DD... it was expensive but worth the cost IMO...
 
I retired early, in large part because of my elderly parents and older spouse; I wanted to spend time with them and be able to care for them as needed. I was deeply grateful for the ACA insurance. On paper, I could have afforded to buy health insurance, but was so grateful to get subsided, high quality insurance. Because I was there to care for them, I'm sure I saved the government $$ for their care.

Now that I am on Medicare, I miss those subsided premiums quite a bit ;)
 
DW and I will be talking to an insurance guy in a couple of weeks about this. We are currently using Cobra which is costing us about $1300 per month. We can go another year (max is 18 months and we will have used 6 months at the end of this year). Of course the question is do we qualify for subsidies and what would be the cost when our estimated taxable income is 116K per year. We will know in a few weeks.
 
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