The link I provided has comments from people who have retired in their 50’s through early 60’s. One person in that thread claims to be 59. Another comment, in response to a question similar to your thought, says that people who retire and start collecting Social Security at 62 rely on the ACA until they’re eligible for Medicare. Another person says they retired at 50 and actively manage their income to be less than $72,000 to qualify for the subsidies.
I suspect that [quote=“TravelerMSY, post:75, topic:31”]
the tiny subset of rich retired people with taxable income low enough for the subsidy
[/quote]
is a little bigger than many people realize. It sure opened my eyes.
So if that 59 yo bought his house 30 years ago that might be worth $1M today and worked hard all his life to save up for retirement and has another $1M in savings and investments. Say his income now is $25K. Should he be forced to sell his house to pay for his medical care? And on the other hand why should millionaires get Medicare for free when they turn 65?
I’m 53 and retired with 7-figure NW and I take full advantage of ACA subsidies by keeping income just below 150% of fed poverty level. But that’s easy to do when everything’s paid for and you’re living cheap in a low COL area off of savings and investment income. Not to mention that travel etc. is dirt-cheap with MS.
They considered and rejected means-testing when the ACA was drawn up btw. The bucket of folks in my category is just a blip cost-wise.
The biggest issue is the unaffordability of plans when you can’t get a subsidy, and I don’t think I got a good understanding of why they didn’t simply phase those out instead of cut them off once you hit 400% FPL.
I’m not really sure what you think Obamacare is doing about the costs of the most expensive 5-10% of the population that differs from any other insurance program. Obamacare insurance costs only covers the costs of people in Obamacare and does not carry any extra burden beyond that group.
Medicare has a 5-10% group within it that has extremely high costs. Also Medicares base average costs are well above Obamacare.
I’m in the same situation. It definitely draws your attention to tax planning, and plausibly-taxfree activities like miles and points definitely improve your lifestyle without increasing AGI.
If the house is in a low COL area, it won’t be worth $1M today most likely. But no, it doesn’t make sense to force the sale of the home. Other assets could be considered. People are forced to use their personal savings before Medicaid will kick in to pay for nursing home costs, as a general rule. Why aren’t assets considered when it comes to ACA? Note that I’m not saying they should or shouldn’t be. Definitely the rules don’t seem to be uniform when it comes to using taxpayer money for healthcare. They should be.
You can’t have it both ways. If you feel that millionaires shouldn’t get free Medicare when they turn 65, then why should they get heavy ACA subsidies before they turn 65?
I don’t have a personal dog in this fight at the moment, other than being a taxpayer. We have health insurance through my husband’s employer and foresee that continuing for several more years. Both 54 years old and he has no plans to retire anytime soon. I just find it fascinating that one could be quite wealthy and easily able to afford paying full freight for ACA, yet game the system to pay almost nothing compared to others.
I also want to clarify that I’m not resentful or jealous of people who can do this. It’s quite probable, if my husband decided to retire early someday, that we’d be in a position to do the same. I’m not sure how I feel about it though. It’s more likely I won’t want to reduce the income just to get the subsidy if it means giving up higher cash flow that can be continually reinvested.
I think a better question is why people don’t think they should pay for medical care in the first place. Obviously doctors and nurses don’t work for free, and hospitals and their machinery need upkeep, cleaning, etc. the money has to come from somewhere.
As for Medicare, the reason you get it when you turn 65 is because you’ve been paying 3-4% of your wages in Medicare taxes as an advance payment towards this insurance benefit and it starts at 65.
Well, why don’t parents think they should pay for their kids schooling? And why should a couple with no kids to put through the public school system pay the same property taxes as parents with a kid or five? Not to mention the tax exemptions they allow. The government tax and benefit system isn’t always equitable or fair.
This is getting way off topic. Short answer though, is that is costs MILLIONS to run a school district, even a small one. If you divided up the cost per child, no family would be able to afford to send their kids to school. Since public education from K-12 is compulsory, society as a whole has to foot the bill. Unless we want to change the laws and become like nations where the kids can’t go to school when their parents can’t afford school supplies and fees.
[quote=“jerosen, post:85, topic:31”]
I’m not really sure what you think Obamacare is doing about the costs of the most expensive 5-10% of the population that differs from any other insurance program. Obamacare insurance costs only covers the costs of people in Obamacare and does not carry any extra burden beyond that group.[/quote]
Of course it does, the largest of which is the NII tax of over $100B in “extra burden”. Those with enough total income pay an extra 4% of their investment gains. For those with long term gains, this is a 20% increase in the tax rate (from 20% to ~24%). Next on the list is hiking the Medicare tax rate on higher incomes, so all those wages get taxed as well. There are plenty of other Obamacare taxes:
Medicare has a 5-10% group within it that has extremely high costs. Also Medicares base average costs are well above Obamacare. Average spending per Medicare enrollee was nearly $11,000 as of 2014. Obamacare premiums are around half that much.
Yes, of course some people have high costs. For Medicare, everyone who works pays into the system and they don’t know yet if they’ll need those benefits or not (or even live long enough to claim it!). It’s a classic example of diversifying risk through insurance.
In Obamacare, the people in the individual market bear the costs of these very sick people, but instead of having 2% of very expensive people out of 100% of those age 65 for example, now you have 2% of those people’s costs being spread over the group of 5% of average health people in the individual market, while the other 93% of people skate away scot free from paying for this (income-based taxes aside for now). This is why the premiums are so high compared to what they were before the ACA.
Yes, individual Obamacare premiums are around the same price as the Medicare number you cite, but remember that the average person under Obamacare is only 35-40 years old while the average Medicare person is practically dead ;). You should expect a factor of several higher cost for the Medicare group based solely on their age. For example, the oldest ACA people in their early 60s would have gotten premium rates about 6x higher than the young adults in their 20s if it weren’t for the law restricting premium pricing.
Government covers the bulk of Medicare. For 80% of Obamacare enrollees government cover the bulk of the cost too.
Taxpayers cover the costs, one way or the other. The government doesn’t magically pay for anything, it just bills other taxpayers. This is why costs should matter, and the ACA hasn’t done much for affordabilty since it was designed to increase the fraction of insured people to score political points and not particularly to reduce medical costs.
Seems that the real complaint is that ~20% of the highest income Obamacare enrollees have to pay for their insurance themselves.
They are not complaining about paying their own insurance. They’re complaining about paying 3x the fair rate, ie for themselves and two other people in poor health as well. If the ACA covered the whole market and not just the small individual market, those extra two unhealthy people’s cost would be spread over 20 people instead of 1 (i.e. 5% individual market size vs 100%) and then the costs would be much more reasonable.
The main benefits are being 1/3 the typical cost of an unsubsidized ACA plan, and giving a good network of doctors. The downsides are preexisting exclusions or other health-related disqualifications (i.e. They don’t have to take you), possible limitations on certain medical issues like maternity or mental health and drug coverage, and of course a possible tax penalty (YMMV getting out of this). BruDude, an insurance broker who used to be on FWF and was quite helpful, had some good comments half way down:
Petersen and National General have short-term plans with national PPO networks that can be extended for up to 12 months. You have to buy a 3-month policy and then it can be renewed up to 3 times. If you are diagnosed with a pre-ex condition during one of those periods, it will be covered in the following period. They do not cover pre-ex from before the policy was purchased though, don’t cover maternity/mental health/preventative care, and they aren’t compliant for tax purposes.
If the lowest priced bronze plan on HC.gov is more than 8.16% of your household income, you would be exempt from the penalty since it would be considered unaffordable.
I would stay away from any ministry sharing plans and US Health Group.
The Petersen and National General policies allow for guaranteed renewal and pre-ex conditions developed in a prior coverage period are covered, but pre-ex conditions from before the first policy were bought are not covered. Ex: Buy policy that starts January 1, have heart attack January 30, renew policy on April 1, heart attack/complications still covered. Pivot/Companion Life also has one of these type of policies available. Options vary depending on what state you’re in.
Coverage currently only available in AZ, CA, CT, GA, IL, LA, MN, OK, TX, VA
Limitations include only paying U&C for out of network care, and non-covered expenses are not covered at negotiated rates. Rates 1.25x higher if you want your moderately risky sports to be covered, like skiing, rollerblading, etc. the very risky stuff they just don’t cover.
You can get up to 11 months of rolling coverage (see their “retro date”), in that new illnesses that show up in the first 3mo are covered for almost a year before you need to renew with them as “preexisting”.
they also offer a separate plan for seniors approaching Medicare age, but you have to be 60 for that.
Agile / National General short term policy resources. Aetna PPO network. Offers some more expensive, lower max coverage policies as guaranteed issue, rather than medically underwritten (i.e. $100k max instead of $1M max for the former vs the latter).
More medical exclusions than I’d seen in the fine print for the others, including not covering things like hospice, joint replacements, kidney disease, organ transplants, sales tax, etc… (as well as the typical exclusions for mental health, fertility issues, routine pregnancy, hearing/vision aids, drug abuse, etc).
Agile also offers several other plans not through National General. Not sure, these may not have the rolling renewal feature so that you can keep a year’s worth of coverage for conditions that arise only since the start of your coverage with them.
OK thats a general tax that everyone/ anyone with high income is paying not specific to people buying Obamacare.
I’ve really no idea what you’re talking about here.
The most expensive costs for the individual market are spread across the individual market. This is fundamentally how any insurance works. Are you just upset that sick people are allowed to have insurance now?
The problem for the overall healthcare insurance system here is that the individual market is very small compared to the whole market, only 7% of people give or take. 3/4 is employer group plans, including government employees, and the rest is Medicare and Medicaid. The problem is very sick people are dropping out of the 3/4 sector of the pool, i.e. working people with coverage, and into the 7% individual pool. So essentially the individual pool is being asked to subsidize the health costs of a 10x larger group, and consequently the premiums skyrocket, the non-sick individuals leave somehow or refuse to buy, and the government has to extort the healthier members of the individual pool via punitive penalties or bail out those who remain in the individual pool (or let them suffer with unaffordable insurance / medical costs, I supposed).
In short, the Obamacare plan of guaranteed issuance applied only to the individual market, is destroying the individual market. If they want that to work, they should have pooled the costs over the whole population instead of trying to support these sick people using just a small corner of the overall pool. If there are 2 sick people out of say 80 (ignoring Medicare / Medicaid at about 20), the cost sharing works if each person pays ~1/40 (=2/80) of those excess costs a lot better than if they pay ~1/4 (=2/7) of those costs.
Do you have any data or anything to support the idea that sick people are dropping out of employer provided coverage into the exchange in any significant numbers? Or is this pure conjecture on your part?
I’m sure that happens in some cases but I can also see people with high medical costs clinging to their jobs and employer sponsored health insurance.
Exchange plans are still a lot cheaper than employer provided insurance.
Average cost in the exchange is $4382
Average cost for a single person in group employer provided insurance is $6690
