ACA changes in the new stimulus bill

For those that aren’t aware there are some new consumer-friendly provisions for health insurance in the bill:

From https://www.medpagetoday.com/infectiousdisease/covid19/91512

The bill would also eliminate a “subsidy cliff” that stops subsidies abruptly for people with incomes over 400% of the poverty level, and instead would continue the subsidies beyond the 400% level, limiting the percentage of income those higher earners pay toward their premium to 8.5%, resulting in a gradual decrease in the subsidy as income rises, she said in a phone call.

A “repayment holiday.” In addition, the bill addresses the miscalculations that may have occurred at the beginning of 2020, when taxpayers using the advance tax credit had to estimate their coming year’s income in order to calculate the credit they would receive. Usually, if people estimate their income too low and receive too large a credit, they have to pay back the excess the following year.

“But people’s income was all over the place in 2020,” and they could have ended up owing the government a lot of money. So a provision in the bill says that “just for 2020, there’s a repayment holiday,” said Pollitz. “People can still claim additional credits if those are due, but if their income bounced around and they earned more than projected, they don’t have to repay” the extra tax credits. And there is one other provision of interest in this area – if a person received as little as 1 week’s worth of unemployment insurance, any income above 138% of the poverty level would be disregarded when calculating eligibility for tax credits. The Senate version of the bill also includes a similar provision for calculating cost-sharing subsidies.

Also from https://www.healthaffairs.org/do/10.1377/hblog20210209.337315/full/

Building On The ACA
The Ways and Means proposal would make significant changes to bolster the ACA and improve marketplace access and affordability. The proposal would:

Extend ACA subsidies to higher-income people who do not currently qualify for 2021 and 2022;
Increase ACA subsidies for lower-income people who already qualify for 2021 and 2022;
Provide maximal ACA subsidies for individuals that receive unemployment benefits in 2021; and
Prevent taxpayers who misestimated their income in 2020 from having to repay excess premium tax credits at tax time.

The interesting last bit means that those who had to pay back excess advanced premium tax credit for 2020 now won’t have to do so. I’ve already filed am and in that category (like a lot of others), we’ll see how they address it since the bill won’t be signed until a month before tax deadline.

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It’ll be interesting to see how they impliment 2020 changes after so many 2020 returns have already been filed. We’ve seen last minute changes delaying the release of certain tax forms, but have we ever seen tax forms being changed after they’ve been released? Sounds like a nightmare.

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Does anyone else see an issue with so much targeting unemployment recipients? Especially while there was the $600 “boost”, so many people continued to go to work daily while being paid less than what UI recipents were receiving. Yet there’s almost a tunnel vision focus on giving additional breaks to the UI recipient.

How can anyone say with a straight face that the UI recipient needs more financial assistance thaan anyone else? Especially when a lot (most?) of those UI recipents could’ve gotten a job stocking shelves at Walmart for half the money, in which case no one would be thinking twice about kicking them extra tax breaks.

I get that someone making $100k would feel a pinch when reduced to $26k UI instead. But giving them tax breaks only serves to help them hold on to their $100k lifestyle and avoid being reduced to a $26k lifestyle - which is pretty offensive to all those who have been living off $26k/yr all along.

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This might save me personally a few thousand bucks this year caused by an unfortunate accident in estimating income.

This. My numbers don’t match your scenario, but I was a well paid professional that got furloughed on the Friday that the $600 UI bonus passed, so I got it for the maximum number of weeks it was available. Considering it didn’t come with benefits, it was a pay cut for me, but not that much of a pay cut. I haven’t done my taxes yet (because I knew this was a possibility) so I can’t give a 2019 to 2020 comparison, and I will spare you all a ton of detail about my situation, but in the end, with being unemployed for 7+ months last year, I had more in my savings at the end of 2020 than I started (and that’s after making several donations).

I applied to a ton of jobs, but never applied to anything that would seriously change my lifestyle or anything that required manual labor. With UI, it made no sense to do that. I am also very different than most people that ended up jobless - I did have over a year’s worth of expenses in cash savings at the time I was furloughed. No point in saving for a rainy day if you don’t use it when it starts raining. But I ended up not using any of it. Our household expenses went down in part because of extra frugality, and in part because of the pandemic (I’m sure that was the case for nearly everyone else too).

All that said, I have a skill that I knew would get me another professional job when places stopped hiring freezes. That isn’t the case for all the unemployed people in the hospitality and service industry. I feel for those folks and I think they actually deserve help considering what the government did to their livelihoods. I hated these bills that threw money at everyone with no real qualifier of who needed it. But since the federal government doesn’t have needles, only hammers, I don’t know how else they could have aimed money at the people who “need it” besides focusing on the unemployed. I have to say that aiming things at unemployed people is a much better tactic than cutting everyone a check, even if someone like me that doesn’t need it ends up paying nearly zilch in federal tax. Hell, my federal taxes are already lower than I think someone at my comfort level should have.

The only other way of getting it to people that need it is just to give it to people making less than $30k. But then you’re giving it to a bunch of people in that category that would have made $30k had there been no pandemic too - so it ends up not really being pandemic relief, just a big ass welfare windfall. It would have been better than the 26 year old married couple with no kids that each made $60k working from home last year getting a check though.

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Your story is interesting. I remember earlier, when you were trying to decide which job to take. Is this that job of which you were just furloughed?

And that professional job requires use of flashlights. It’s funny but I’m wondering just what do you do?

But back to the topic here, ACA. The government really has this pandemic handout wrong. Using IRS records from which to payout is wrong.

I’m not sure, but I expect I will be getting that $1400 stimulus, relief payment. Like so many others getting paid, we are not in desperate need. When I see folks in line for food giveaways, they probably really need those funds. A real shame!

Your idea would work! So someone needs to help our POTUS in his relentless handout scheme. :woozy_face:

Not only requires the use of flashlights, but his safety depends on them…

For some reason I’m envisioning deep cave exploration or recovery diver. :laughing:

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lol, much less interesting

Accounting Degree > public accounting firm > CPA license > hated it and wanted something exciting > patrolman in a city police department (but kept my cpa license up) > married > local government internal auditing > kids > furlough > museum accounting manager (with a tax prep seasonal side gig started as a cop and still going)

I got furloughed from local government internal auditing. At that point, I had been in public service for 12+ years and most governments here (state and local) froze hiring for a while, so I didn’t have many opportunities last summer, but thanks to the $600/wk, I wasn’t in a rush. Expanded my job search outside gov’t when my furlough turned into my position being eliminated and the $600/wk disappeared.

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The elimination of the subsidy cliff alone made these ACA changes worth it, but they’re only in place for two years. We’ve been thinking about moving to FL and I’d have to incur some cap gains to fund the new place (which would put us way over the cliff). Now I know that I’ll only be on the hook for 8.5% of income no matter what the premiums are, if we decide to do it in the next couple of years. For example if we had AGI of $100k our ACA premium would be $8500, our current Silver plan costs $18k unsubsidized and that’s what we’d pay without a cliff. Big savings.

The cliff was a major complaint of a lot of folks and I don’t blame them, it needs to go away permanently.

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I saw somewhere today but wasn’t able to verify it, that it’s going to be for 2021 and 2022, not 2020.

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It is 2 years but I don’t see how it doesn’t get renewed. It will clearly be very popular. How do Republicans run against this in 22 ?

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“When the people find that they can vote themselves money, that will herald the end of the republic.” - not Poor Richard, but I can’t figure out who.

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It may actually add impetus to include a public option solely because the subsidies will be high. In many areas in California, the presence of Kaiser and Oscar has reduced subsidies paid out under the Second Lowest Cost Silver Plan criteria. This spikes health insurance rates for those on higher cost plans but ensures competition and access to health care, although not necessarily the gold plated, wide network plans that some people want. https://insuremekevin.com/competition-raises-health-insurance-rates-in-northern-california/