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Sun May 26, 2013, 05:03 PM

How an additional $1,000 in income can cost you $6,420 more in premiums in CA

Calculator:
http://www.coveredca.com/calculating_the_cost.html

Number of people in the household 2
Annual household income $62,000
Age of the first adult 55
Age of spouse 55

Estimated monthly silver plan premium (without subsidy) $1,026
Estimated tax credit from the government $535
-------------------------------
Your estimated monthly silver plan premium $491


Run the same scenario, except income goes up by $1,000 to $63,000:

Number of people in the household 2
Annual household income $63,000
Age of the first adult 55
Age of spouse 55

Estimated monthly silver plan premium (without subsidy) $1,026
Estimated tax credit from the government $0
-------------------------------
Your estimated monthly silver plan premium $1026

Your premium jumps from $491 to $1026 per month.
$1026-491=$535

$535x12=$6420

You have to spend $6420 more per year on premiums because your income went up by $1,000.
The additional $1,000 puts your over the threshold so you are no longer eligible for subsidies.

116 replies, 16486 views

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Reply How an additional $1,000 in income can cost you $6,420 more in premiums in CA (Original post)
antigop May 2013 OP
Honeycombe8 May 2013 #1
antigop May 2013 #3
JaneyVee May 2013 #41
antigop May 2013 #49
dsc May 2013 #8
Posteritatis May 2013 #19
pangaia May 2013 #32
Honeycombe8 May 2013 #39
dumbcat May 2013 #69
dsc May 2013 #73
antigop May 2013 #24
Honeycombe8 May 2013 #33
starroute May 2013 #65
LiberalFighter May 2013 #85
Honeycombe8 May 2013 #43
dsc May 2013 #67
dumbcat May 2013 #72
RudynJack May 2013 #88
Bluenorthwest May 2013 #11
uppityperson May 2013 #12
Honeycombe8 May 2013 #36
pangaia May 2013 #29
BenzoDia May 2013 #75
JVS May 2013 #83
still_one May 2013 #102
antigop May 2013 #2
uppityperson May 2013 #4
antigop May 2013 #5
uppityperson May 2013 #7
DebJ May 2013 #9
uppityperson May 2013 #10
Posteritatis May 2013 #17
uppityperson May 2013 #20
Posteritatis May 2013 #22
uppityperson May 2013 #70
Lucky Luciano May 2013 #45
uppityperson May 2013 #71
DebJ May 2013 #92
uppityperson May 2013 #105
JoePhilly May 2013 #6
magical thyme May 2013 #62
muriel_volestrangler May 2013 #13
antigop May 2013 #15
antigop May 2013 #18
Honeycombe8 May 2013 #44
kelly1mm May 2013 #53
Honeycombe8 May 2013 #59
muriel_volestrangler May 2013 #63
truedelphi May 2013 #81
Thinkingabout May 2013 #14
antigop May 2013 #16
uppityperson May 2013 #21
pangaia May 2013 #34
Honeycombe8 May 2013 #51
antigop May 2013 #52
lumberjack_jeff May 2013 #101
truedelphi May 2013 #80
slipslidingaway May 2013 #84
truedelphi May 2013 #114
slipslidingaway May 2013 #116
muriel_volestrangler May 2013 #35
davekriss May 2013 #23
Thinkingabout May 2013 #31
TreasonousBastard May 2013 #25
Honeycombe8 May 2013 #57
ProSense May 2013 #26
muriel_volestrangler May 2013 #40
ProSense May 2013 #46
muriel_volestrangler May 2013 #64
ProSense May 2013 #66
muriel_volestrangler May 2013 #68
ProSense May 2013 #74
muriel_volestrangler May 2013 #86
Herlong May 2013 #27
bettyellen May 2013 #28
antigop May 2013 #30
Herlong May 2013 #37
JaneyVee May 2013 #38
antigop May 2013 #42
JaneyVee May 2013 #47
antigop May 2013 #50
ProSense May 2013 #60
Major Hogwash May 2013 #77
muriel_volestrangler May 2013 #87
kelly1mm May 2013 #48
Honeycombe8 May 2013 #55
kelly1mm May 2013 #56
Honeycombe8 May 2013 #58
truedelphi May 2013 #115
Egalitarian Thug May 2013 #54
kelly1mm May 2013 #61
KentuckyWoman May 2013 #76
truedelphi May 2013 #82
subterranean May 2013 #108
BenzoDia May 2013 #78
muriel_volestrangler May 2013 #89
BenzoDia May 2013 #91
muriel_volestrangler May 2013 #93
BenzoDia May 2013 #96
muriel_volestrangler May 2013 #97
BenzoDia May 2013 #98
muriel_volestrangler May 2013 #103
BenzoDia May 2013 #104
muriel_volestrangler May 2013 #106
BenzoDia May 2013 #107
muriel_volestrangler May 2013 #109
senseandsensibility May 2013 #112
BenzoDia May 2013 #113
Sgent May 2013 #79
muriel_volestrangler May 2013 #90
antigop May 2013 #94
datasuspect May 2013 #95
lumberjack_jeff May 2013 #99
Savannahmann May 2013 #100
leftstreet May 2013 #110
roamer65 May 2013 #111

Response to antigop (Original post)

Sun May 26, 2013, 05:10 PM

1. There has to be a cutoff somewhere. Would you prefer it to be $60k?

That's the way everything is. In income taxes, if you earn $5 more, in some instances, that puts you in a higher bracket so that you'll end up with a lot less in income after taxes. There have been years where my Christmas bonus was wiped out by higher taxes, so it was as if I hadn't gotten a bonus at all.

It's always this way when you're close to a margin. The thing to do is to try to look ahead and not get that $1K in extra income, if you care that much. But then, you'd be giving up income, because even without the subsidy, you STILL come out about $500 ahead of if you'd bring home $62,000 in income.

And let's not forget: the subsidy is a welcome GIFT to the couple earning $62k or less (it's a sliding scale, I believe). So the ACE is a good thing for millions of people.

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Response to Honeycombe8 (Reply #1)

Sun May 26, 2013, 05:11 PM

3. LOL. Nice try. nt

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Response to antigop (Reply #3)

Sun May 26, 2013, 07:37 PM

41. It varies by age. If you 2 are 55 and make 63K/yr $1026 isn't bad for 2 people at that age.

 

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Response to JaneyVee (Reply #41)

Sun May 26, 2013, 07:44 PM

49. 63k is TOTAL for both people and that's just for PREMIUMS.

That's what you pay for PREMIUMS.

It's $1026 PER MONTH. That's NOT AFFORDABLE.

Once you get sick or require medical help, you will have copays/coinsurance/deductibles on top of that.

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Response to Honeycombe8 (Reply #1)

Sun May 26, 2013, 05:24 PM

8. no that isn't how it works

Say bracket A ends at 50k and bracket B ends at 150k. Also say bracket A is 15%, B is 25%, and C is 35%. Now say you make 49k in taxable income. you pay .15(49000) which is 7350. You keep 41650. Now say you make 51k in taxable income. You pay .15(50000) which is 7500 + .25(1000) which is 250 for a total of 7750. You get to keep 43250. Similarly if you make 150k in taxable income you pay .15(50000) + .25(100000) which is 7500 + 25000 or 32500. You keep 117500. If you make 151k in taxable income the you pay .15(50000) + .25(100000) + .35(1000) which is 7500+ 25000+ 350 or 32850 you keep 118150. In all cases the more you make the more you keep.

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Response to dsc (Reply #8)

Sun May 26, 2013, 06:41 PM

19. It boggles me how few people get that that's how the brackets work. (nt)

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Response to Posteritatis (Reply #19)

Sun May 26, 2013, 07:24 PM

32. Boggles is right...

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Response to Posteritatis (Reply #19)

Sun May 26, 2013, 07:34 PM

39. It boggles the mind how arrogant some men are....

and argue with someone else's personal experience.

The tax rate applies to the adjusted gross income (regardless of the underlying varying rates that result in the final tax rate applied to the AGI). Notwithstanding anything else, I can verify that a small bonus that puts a person over into the next tax rate results in a lower takehome pay amount.

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Response to Honeycombe8 (Reply #39)

Sun May 26, 2013, 09:22 PM

69. I think you are confusing withholding rate with marginal tax rate.

Marginal tax rates work as described by the poster above. Take home pay may go down due to the withholding rate jumps, but you get it back.

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Response to Honeycombe8 (Reply #39)

Sun May 26, 2013, 09:39 PM

73. you are mixing up two different things

Say you get paid 26 times a year (bi weekly). Say you normally make 52k a year meaning 2000.00 a check, pre tax. Now say you get a 1% bonus all in one check. That bonus would be 520. Your new check pre tax would be 2520 but it would be withheld on as if you made 2520 each check or 65520 per year. I don't know the exact math but clearly the rate at which the check was withheld would go up. It might be possible that a bonus amount would work out where the increase in rate would be such that it would more than negate the bonus. But even if it did, you would still get the money back.

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Response to dsc (Reply #8)

Sun May 26, 2013, 07:04 PM

24. thanks, dsc. It wasn't worth my time trying to explain it. nt

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Response to dsc (Reply #8)

Sun May 26, 2013, 07:25 PM

33. Unfortunately, no. I lived it. I know. nt

If you go from a 20% to a 25% income bracket, a small bonus will evaporate, if that small bonus kicked you over the line. The 25% applies to adjusted gross income. All of the adjusted gross income.

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Response to Honeycombe8 (Reply #33)

Sun May 26, 2013, 09:07 PM

65. There is no way that could be true

Have a look at this tax calculation table from 2011. See where it says "of excess over"? If you go through and check the figures, you'll see that you pay 0% up to $325, then 10% from that to $1038, then 25% from that to $3204. There is no point at which you pay the higher percent on your total adjusted gross income -- only on the excess.

If you thought a bonus lowered your after-tax pay to less than what it would have been without the bonus, either you were doing the figuring wrong or there was some other factor you weren't taking into account.



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Response to Honeycombe8 (Reply #33)

Mon May 27, 2013, 12:23 AM

85. Starrout and dsc are right

In your scenario the 20% tax rate does not exist. Instead, you will have income that is taxed at 0%, 10%, 15%, and 25%. None of it will be taxed all at the same rate.

For 2013, the standard deduction is $6,100 for single person and $12,200 for a couple. Exemptions are $3,900 per person.

A single person would have a total of $10,000 that is exempt from taxes. For a person to have their first dollar of income taxed at the 25% it would require $46,251 of wages. The tax on that first dollar which is the dollar after $46,250 would be 25 cents or 25% of the first dollar. But none of the $46,250 in wages would be taxed at 25%.


If you were correct in all of the AGI being taxed at 25% the tax would be $9062.75. Instead, it is $4991.50. The first $10,000 is not taxed. The next $8,925 is taxed at 10% for $892.50 and the $27325 is taxed at 15% for $4098.75. And the the final $1 at 25% for 25 cents.

The effective rate as applied correctly for $46,251 in wages would be 10.79%. While your application it would be 19.59%.

The above doesn't take into consideration if the person has itemized deductions which would reduce tax liabilities.

A married person or head of household have higher levels of income before the same rates apply.

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Response to dsc (Reply #8)

Sun May 26, 2013, 07:39 PM

43. My dear son...you don't understand tax rates.

There is a final tax rate (that results from the varying underlying tax rates) applied to the adjusted gross income.

If you make a small amount of money that puts you over one rate bracket into the next, yes, son, that FINAL rate applies to the AGI. (Since all the rates have varying underlying rates, it makes no difference whatsoever. It is the FINAL resulting rate that matters.) Then your deductions and credits are applied, resulting in the real rate the taxpayer ends up paying.

That real rate is what Buffet claims is unfair about the tax system and why he pays a lower real rate than this secretary. The initial rate he is supposed to pay is higher. But his real rate is lower because of his deductions and credits.

It matters not one lick that the IRS uses a formula of varyiing rates to arrive at the initial rate.

It is true that if someone, like myself, makes a SMALL bonus that puts one over one rate into the next bracket, s/he may well end up with less takehome pay.

It boggles the mind how some people fail to understand the basics of financial matters, including taxes.

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Response to Honeycombe8 (Reply #43)

Sun May 26, 2013, 09:10 PM

67. you are just plain, flat out, gold carat, 100 percent wrong

Our income system works on what are called marginal rates and brackets. Income within certain ranges, no matter what other income may or may not be earned, are taxed at the rate within those brackets.

Here is an explanation since you didn't like mine.

http://taxes.about.com/od/Federal-Income-Taxes/qt/Tax-Rates-For-The-2013-Tax-Year.htm


10% on taxable income from $0 to $8,925, plus
15% on taxable income over $8,925 to $36,250, plus
25% on taxable income over $36,250 to $73,200, plus
28% on taxable income over $73,200 to $111,525, plus
33% on taxable income over $111,525 to $199,175, plus
35% on taxable income over $199,175 to $225,000, plus
39.6% on taxable income over $225,000.

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Response to Honeycombe8 (Reply #43)

Sun May 26, 2013, 09:33 PM

72. Oh, my. This is embarrassing

Please tell me you are not a financial planner, or responsible for someone's retirement planning.

You are just flat out wrong. But I think I see why when you keep talking about takehome pay.

Sorry.

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Response to dsc (Reply #8)

Mon May 27, 2013, 04:30 AM

88. Thank you

The notion that a small raise will cause someone to lose money in ludicrous.

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Response to Honeycombe8 (Reply #1)

Sun May 26, 2013, 05:34 PM

11. That's so daft I don't even want to hear your excues for why only some couples get this 'gift' and

 

others get nothing when they make the same income. Bigoted laws by stupid,mean people.

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Response to Bluenorthwest (Reply #11)

Sun May 26, 2013, 05:43 PM

12. What do you mean? I am trying to understand, thank you.

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Response to Bluenorthwest (Reply #11)

Sun May 26, 2013, 07:30 PM

36. You don't understand why some people have less money than others and need subsidy?

You don't think there should be a cutoff for food stamps, or welfare, or housing subsidies? I don't understand why you aren't happy for those getting a subsidy. Makes no sense. Is your point that you just don't like the ACA, so anything connected with it is bad?

There has to be a cutoff somewhere. What's hard to understand about that? A couple earning $63k a year is hardly poor and doesn't really need a subsidy. So they don't get it. Easy to understand.

I haven't researched it, but I doubt the OP's premise that the subsidy for the $62k couple is that high, since the subsidies are on a sliding scale. Meaning a couple earning $40,000 would get a larger subsidy than the next level up, and they would get a larger subsidy than the $62k couple. But even accepting the OP's premise, there is a cutoff after which you don't get a subsidy.

Just like there is a cutoff after which you don't get food stamps, or welfare, or housing subsidies, or a lower tax rate. There's a cutoff after which you don't have to pay Social Security tax. There are always cutoffs. Easy to understand. If you're around the margin, it's irritating. But that couple has the option of NOT getting that extra $1k in income. But they'd end up with over $500 less in money, so that doesn't make sense.

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Response to Honeycombe8 (Reply #1)

Sun May 26, 2013, 07:22 PM

29. The 1% have an excellent slution for this situation.

It's called.. The Cayman Islands !

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Response to Honeycombe8 (Reply #1)

Sun May 26, 2013, 10:02 PM

75. This is absolutely incorrect. You should have someone do your taxes if you believe this.

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Response to Honeycombe8 (Reply #1)

Sun May 26, 2013, 10:43 PM

83. No there doesn't have to be a cutoff, they could make it a phase-out.

Well designed public policies phase things out so that this kind of situation doesn't arise. For example food stamp benefits decrease gradually as income rises in such a way that the recipient is always better off earning more money.

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Response to Honeycombe8 (Reply #1)

Mon May 27, 2013, 01:54 PM

102. Sorry that doesn't cut it. 12k a year for health insurance is too much

This is the DU member formerly known as still_one.

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Response to antigop (Original post)

Sun May 26, 2013, 05:10 PM

2. kick nt

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Response to antigop (Original post)

Sun May 26, 2013, 05:12 PM

4. There will always be a cutoff and even $1 will put you over/under.

$62,000 for a family of 2? That seems really high for a cut off point and a great deal for them.

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Response to uppityperson (Reply #4)

Sun May 26, 2013, 05:16 PM

5. wow you're a real hoot! nt

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Response to antigop (Reply #5)

Sun May 26, 2013, 05:23 PM

7. ETA non snark

I am used to cut offs being $25,000 and $63,000 sounds high to me. Times have changed and it is no longer $15,000 but $25,000 and $63,000 seems like a high cut off. So long as the state can afford it, that is good.

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Response to uppityperson (Reply #4)

Sun May 26, 2013, 05:25 PM

9. That could not amount to peanuts in California.

I live in a hugely lower cost area in South Central Pa and $62000 will get you
a small, old home and a 10 year old car.

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Response to DebJ (Reply #9)

Sun May 26, 2013, 05:31 PM

10. Who typically earns what their house costs in a year? Where I live it'd not even get

you a mobile home on a lot. I know of no one who has bought a place on a yrs salary, not sure what that has to do with this.

Every thing that has a cut off amount has a cut off amount. Going $1 over the amount puts you in the next category.

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Response to uppityperson (Reply #10)

Sun May 26, 2013, 06:39 PM

17. ...Where are you getting the idea that she's talking about buying a house outright for that much? nt

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Response to Posteritatis (Reply #17)

Sun May 26, 2013, 06:44 PM

20. "$62000 will get you a small, old home and a 10 year old car."

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Response to uppityperson (Reply #20)

Sun May 26, 2013, 06:56 PM

22. I repeat my question. (nt)

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Response to Posteritatis (Reply #22)

Sun May 26, 2013, 09:28 PM

70. I repeat my answer. nt

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Response to uppityperson (Reply #10)

Sun May 26, 2013, 07:41 PM

45. So why not linearly taper off the benefit starting at some point instead of having the shock? of

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Response to Lucky Luciano (Reply #45)

Sun May 26, 2013, 09:29 PM

71. That would be a good idea, to have it be sliding scale vs on/off. I agree with that. nt

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Response to uppityperson (Reply #10)

Mon May 27, 2013, 09:32 AM

92. I am saying that on an annual income of $62,000 a year, a family of

more than one person can barely get by, and is just one catastrophe shy
of losing what little they have. In that income range, you have an
older house and a rapidly degenerating automobile. Any day you
will need to replace the heating or cooling system, the plumbing,
the roof, etc. Soon you will need a new car. You probably don't take
vacations or go out much at all.


This is in response to the comment that
$62,000 is a comfortable income.

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Response to DebJ (Reply #92)

Mon May 27, 2013, 03:02 PM

105. Thanks for reply. Wages have not kept up with costs, that is for sure.

Too many are one catastrophe shy of losing what they have indeed.

I guess never having had a car newer than 10 yrs old, and having always lived in either an old or uncompleted house, my view is probably skewed.

I am looking forward to Obamacare kicking in next yr, hoping my state has enough as we will qualify easily for low income. We've thought of downsizing, with no kids now, but everything would cost more, including rent. We can not manage our health insurance, running up a bill, and at that with an unusable $10,000 deductible.

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Response to antigop (Original post)

Sun May 26, 2013, 05:19 PM

6. Donate a little more to a personal IRA.

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Response to JoePhilly (Reply #6)

Sun May 26, 2013, 08:56 PM

62. if you're already at the maximum, you can't. nt

 

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Response to antigop (Original post)

Sun May 26, 2013, 06:23 PM

13. For a couple both aged 64, the difference is $889/month - over $10,000 a year

If that calculation is correct (and I tried it on another site, which seems to confirm it is), the system truly sucks. They ought to have devised a sliding scale, not a sudden cutoff.

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Response to muriel_volestrangler (Reply #13)

Sun May 26, 2013, 06:32 PM

15. I agree. People are going to be outraged when they get caught in this. nt

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Response to muriel_volestrangler (Reply #13)

Sun May 26, 2013, 06:40 PM

18. isn't it amazing how people are trying to spin this? nt

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Response to muriel_volestrangler (Reply #13)

Sun May 26, 2013, 07:41 PM

44. It is a sliding scale. No one has bothered to check the facts of the OP. But it's clear....

I read that in the provisions of the ACA. It is done on a sliding scale.

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Response to Honeycombe8 (Reply #44)

Sun May 26, 2013, 07:50 PM

53. You are partially correct. at 133% of the poverty line the subsidy is 90%. The subsidy

does reduce gradually till you are at 400% of the poverty line. At that point the subsidy is 50% of the premium amount. At 401% of the poverty line the subsidy is 0%. That is what the OP is describing, the cliff-like drop off from 400% of poverty line to 401% of the poverty line.

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Response to kelly1mm (Reply #53)

Sun May 26, 2013, 08:08 PM

59. The California site says it's a sliding scale.

It says, "For individuals, financial assistance is available on a sliding scale, with more support for those who earn less."

But at some point, the subsidy ends. I suspect the difference is so great in the OP example because of the people's ages.

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Response to Honeycombe8 (Reply #59)

Sun May 26, 2013, 08:57 PM

63. Yes, it is because of their ages, but is that OK?

It leaves a couple aged 64 earning 401% of poverty level - ie just above $62,000 - about 25% of their gross income in insurance premiums. The problem is that they think a couple earning $62,000 should only pay 9.5%, but $63,000 should pay 25%.

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Response to Honeycombe8 (Reply #44)

Sun May 26, 2013, 10:32 PM

81. But these payments are sliding scale and offer us exactly what?

By the time a person has to pay off a huge deductible, and co pays, it is obvious that many people will be able to afford doing exactly as they are doing now - not having any health care.

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Response to antigop (Original post)

Sun May 26, 2013, 06:32 PM

14. A younger friend is receiving health insurance, disability, dental and life insurance for $104 a

Month which was offered through Paychex payroll system and they are able to get group rates. ACA is not as difficult as many are trying to make this. I do not know what the national exchange will be offering but we all need health insurance. Fines are made to encourage everyone to get coverage. Those who have been insured for many years is having to pay extra for the uninsured and this is a penalty on the current payers. I accepted less per hour wages in order to have medical insurance now all needs to get on the wagon.

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Response to Thinkingabout (Reply #14)

Sun May 26, 2013, 06:35 PM

16. $1026 per month for two people w/ income $63000 IS NOT AFFORDABLE.

That's just for the premiums ---if you have to go to the doctor or hospital, you have to add the co-pays/coinsurance/deductibles.

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Response to antigop (Reply #16)

Sun May 26, 2013, 06:46 PM

21. I agree, that is way too much. As is $550/month w/income $25,000 ($10,000 deductible)

Insurance costs too much. The whole insurance industry needs a big makeover.

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Response to uppityperson (Reply #21)

Sun May 26, 2013, 07:28 PM

34. To paraphrase Grover Norquist..

(sorry to mention that name) The whole insurance industry should be drowned in a bath tub.

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Response to antigop (Reply #16)

Sun May 26, 2013, 07:48 PM

51. Preventive exams are free. They don't have to choose that policy.

Each person is paying $518/mo. They might be able to find a less comprehensive plan for less.

Buying insurance has been a problem for decades and will continue to be, although it's less so, now, due to the ACA.

They are bringing home about $4,000 cash per month. Their house is probably paid off or close to it. They might be able to find a policy for two for about $800/month.

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Response to Honeycombe8 (Reply #51)

Sun May 26, 2013, 07:50 PM

52. and a "less comprehensive" plan will nail them if they have medical problems. nt

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Response to antigop (Reply #52)

Mon May 27, 2013, 01:47 PM

101. Medical care is expensive.

 

Make up your mind. You can either pay a lot in premiums or be underinsured and pay a lot for care.

Under current law, people with medical problems go bankrupt. Medical bankruptcy will now be a thing of the past.

"Affordable" <> "convenient"

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Response to antigop (Reply #16)

Sun May 26, 2013, 10:29 PM

80. Agreeing with uppity person. We were supposed to have reform

Instead we got The 2009 "Guarantee of Huge Perofits For the Big Insurers and their Buddies over at Big Pharma." So was what we ended up with even "reform"??

Every definition of reform I have ever considered as being legitimate means that you get rid of the problem.

And that is what this man himself said we needed to do, back when running for the Illinois Senate in 2004. that the best and the most logical method of reforming Health Care in the USA was to have Single Payer Universal HC. He also stated to do that, we would need to ahve a majority in the Congress and in a Dmeocrat in the oval Office as well.

Somehow by August of 2009, Obama decided to scrap going for the best and most logical solution, and instead insisted "Since we have to maintain our uniquely American way of having health care insurance, we must include the insurers."

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Response to truedelphi (Reply #80)

Mon May 27, 2013, 12:17 AM

84. Uniquely American Solution - What is it ? Why is it being pushed?

you are so right, what happened?

Uniquely American Solution - What is it ? Why is it being pushed?
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=6289091&mesg_id=6289091

IMHO this was a MAJOR disappointment from the Dems who once again blocked discussion of a national, not for profit HC system in favor of keeping the for profit system alive. This was not Obama's plan, he was just following along to keep the for profit system afloat.

And of course we hear talk of the deficit and I agree we need to do something, but it is Medicare that is the elephant in the room and the Dems did not address the issue sufficiently. The Repubs did not derail the issue the Dems did when they allowed no discussion to advance the issue. Obama said in a speech before the AMA that we we would not have a SP system because we would not allow a socialized system of HC... WTF? Does he think people are that stupid that they cannot differentiate between a socialized system such as the UK and a SP system as they have in Canada? All of the major candidates jumped on board to the Hacker plan to keep the profit in the system and the even the "liberal" media played along.



From the above link ...

"...In early June, a memo circulated from the Herndon Alliance and Lake Research Partners telling advocacy groups and other interested parties precisely what words they should use to counter Republican messages as health reform’s verbal war begins. The Herndon Alliance, which calls itself a non-partisan coalition, has partnered with some 200 organizations, including former single-payer advocates, think tanks, foundations, advocacy groups, businesses, and health care providers. The Alliance claims to “provide value-added services to partner organizations”—i.e., helping them develop communications strategies. Lake has worked closely with the Alliance in crafting messages its partners can use. She has counseled the Alliance’s partners against using the term “universal coverage.” Maybe that’s why it’s not talked about much anymore. Similarly, she tells activists never to say “Medicare for all.” Instead, they should say “choice of public and private plans.”

...Lake says that frame is “so effective” because it taps into the public’s key expectations for health reform, such as the choice of keeping your current plan and doctor—the president uses that one; affordability (paying less and getting more)—lots of groups are using that one; and finding a uniquely American solution—insurance companies and Sen. Max Baucus have used that one. But wait a minute. Didn’t the phrase “uniquely American solution” surface with Bill Clinton? In the early 1990s, as Clinton began to craft his plan based on managed competition, he framed it as his “uniquely American plan.” How many uniquely American plans can there be? ..."

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Response to slipslidingaway (Reply #84)

Tue May 28, 2013, 04:07 PM

114. I went off and spent some worthwhile time reading material over at

the link you provided. Then I forgot to thank you for posting it.

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Response to truedelphi (Reply #114)

Wed May 29, 2013, 11:03 PM

116. Thanks so much for coming back for a thank you ...

I cannot tell you how many times I've been distracted by reading info and not gone back to the OP to say thanks.



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Response to Thinkingabout (Reply #14)

Sun May 26, 2013, 07:28 PM

35. And the difference is that they're younger

The cut-off point is the same, whatever age you are - 400% of the federal poverty level. Just below that, the subsidy is so that you pay no more than 9.5% of your income. This works out OK for a couple aged 30 -their premium is $522, and at an income of $62,000, they pay $491/month (subsidy of $31); at $63,000, they pay $522. But a 55 year old couple has a premium of $1026. At $62,000, they pay the same $491/month; and at $63,000, they pay the entire $1026.

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Response to antigop (Original post)

Sun May 26, 2013, 07:01 PM

23. I'm surprised this hasn't been pointed out more often

The ACA comes with a pretty steep cliff at 400% of the federal poverty level for a given family size. Unfortunate, but true.

I love that things will incrementally improve, but the cliff will cause a number if households some grief.

This is the DU member formerly known as davekriss.

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Response to davekriss (Reply #23)

Sun May 26, 2013, 07:23 PM

31. There are some groups available andvwill require some shopping. One thing to

Remember, lots of the information being put out by Boggieman against ACA in not going to be correct. I have not seen the national exchange offering yet. I heard a story yesterday about a 62 year old terminated after 26 years of work, was told 7 was being terminated to get to the 29 number but amazing it was all the highest paid workers. We are not even at 2014 and lies are flying saying health care is going to cost $300,000 a year. This businessman is lying. I doubt if he made $300,000 in a year. This same offering through Paychex would be available to him. Even though OOPS Rick Perry declined the option to set Medicaid this is presently available. I am surprised some businesses are able to stay in business operating with lies.

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Response to antigop (Original post)

Sun May 26, 2013, 07:14 PM

25. A lot of bullshit and snickering in this thread, but a few years ago my income changed and...

Social Security kicked in so I was making about a grand more and that put me over the limit for freebies at the VA.

I lost the transportation supplement-- $48 bucks each appointment for driving there

I got an $8 per refill pharmacy copay.

New copays on procedures.

So, yeah it happens, but a sliding scale toward the lower end would be more appropriate then a median cutoff. Even so, in my case I'm better off now because my income went up again without additional penalties.


Anyway, have fun all predicting yet another dire future based on projections that may be adjusted before the sky falls.

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Response to TreasonousBastard (Reply #25)

Sun May 26, 2013, 08:04 PM

57. It is a sliding scale. But at some point, the subsidy ends. nt

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Response to antigop (Original post)

Sun May 26, 2013, 07:14 PM

26. You have to

Your premium jumps from $491 to $1026 per month.
$1026-491=$535

$535x12=$6420

You have to spend $6420 more per year on premiums because your income went up by $1,000.
The additional $1,000 puts your over the threshold so you are no longer eligible for subsidies.

...take into consideration the calculator's limitations.

Note: This calculator shows expected spending for families and individuals eligible to purchase coverage through Covered California under the Affordable Care Act. Under the law, maximum contributions to premiums will be based on modified adjusted gross income, while estimates in this calculator are based on the annual income entered by the user. The premiums in this calculator reflect estimates for Covered California silver plans.

It also doesn't reflect premium caps.

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Response to ProSense (Reply #26)

Sun May 26, 2013, 07:34 PM

40. Can you explain what 'premium caps' are?

The explanations I find online are exactly about this - ie a sudden cutoff of all subsidies at 400% of federal poverty level. Below that, premiums paid by the insured are capped at 9.5% of gross income; above, there's no cap at all - and the quoted premium for 55 year olds is about 19.5% of $63,000. See eg http://www.healthpocket.com/affordable-care-act/health-insurance-subsidy

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Response to muriel_volestrangler (Reply #40)

Sun May 26, 2013, 07:42 PM

46. That's what

Can you explain what 'premium caps' are?

The explanations I find online are exactly about this - ie a sudden cutoff of all subsidies at 400% of federal poverty level. Below that, premiums paid by the insured are capped at 9.5% of gross income; above, there's no cap at all - and the quoted premium for 55 year olds is about 19.5% of $63,000. See eg http://www.healthpocket.com/affordable-care-act/health-insurance-subsidy

...I was refering to. The point is that the calculators come with disclaimers.



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Response to ProSense (Reply #46)

Sun May 26, 2013, 09:02 PM

64. You said "It also doesn't reflect premium caps"

and I said I thought it did - that there are no premium caps above 400% of FPL, and that is precisely the problem that the OP identifies. So I can't see how you can say that's what you were referring to.

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Response to muriel_volestrangler (Reply #64)

Sun May 26, 2013, 09:09 PM

66. No

"You said "It also doesn't reflect premium caps and I said I thought it did - that there are no premium caps above 400% of FPL, and that is precisely the problem that the OP identifies. So I can't see how you can say that's what you were referring to."

...it was in the context of my point. What is the modified adjusted income of a couple earning $63,000?

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Response to ProSense (Reply #66)

Sun May 26, 2013, 09:16 PM

68. That doesn't explain what you say about premium caps

Why doesn't the calculator reflect premium caps, in your opinion?

The difference between 'earnings' and 'modified adjusted gross income' is a different matter. It depends largely on how much they pay into an IRA, as far as I can tell. But that has absolutely nothing to do with premium caps; can we stay on the question?

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Response to muriel_volestrangler (Reply #68)

Sun May 26, 2013, 10:02 PM

74. Well.

"That doesn't explain what you say about premium caps Why doesn't the calculator reflect premium caps, in your opinion?

The difference between 'earnings' and 'modified adjusted gross income' is a different matter. It depends largely on how much they pay into an IRA, as far as I can tell. But that has absolutely nothing to do with premium caps; can we stay on the question?"

...you are ignoring a big factor that will affect the actual premium of the couple in the OP scenario, which is the MAGI.

As for premium caps, the calculators do not address employer plans. Still, if an indiviual's employer doesn't offer affordable coverage, the person may be eligible to shop the exchange. Now what happens in that scenario?

From the link in the OP, scroll down to where it states methodology:

<...>

Californians who are U.S. citizens or lawful residents will be eligible to purchase coverage through Covered California beginning in 2014 if they are not eligible for a federal program such as Medicare or Medi-Cal, and do not have an offer of affordable coverage through their employer or a family member's employer. Employer-sponsored plans will be considered unaffordable if the employee contribution for employee-only coverage is more than 9.5 percent of household income or if the plan has an actuarial value of less than 60 percent.

Estimated premiums without subsidies reflect the statewide average second most affordable silver plan premium based on Covered California Health Plan and Rates for 2014 (May 23, 2013). Age-adjusted premiums for each household member who would enroll in coverage are aggregated into a family premium, using the methodology outlined in final federal regulations released in February 2013.

For individuals with household income below 400 percent FPL who purchase coverage through Covered California, the law limits individuals' premium contributions to a set percentage of household income. If the monthly premium without subsidies is less than the maximum premium contribution, the household will pay the premium without subsidy. The premium caps range from 3.0 percent of income at 133 percent FPL to 9.5 percent of income at 300 through 400 percent FPL. The premium percentage cap will be 2.0 percent for households with income below 133 percent FPL, applicable to legal immigrants who are not eligible for Medi-Cal. This cap is not shown in the calculator as most individuals with income below 133 percent FPL will be eligible for Medi-Cal. The calculator uses 2013 FPLs, which will be used by the Exchange during the open enrollment period for the 2014 plan year.

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Response to ProSense (Reply #74)

Mon May 27, 2013, 04:15 AM

86. So the calculator *does* accurately show the premium caps for the income shown

133% of FPL for a couple is about $20,000; the calculator correctly shows that a couple over 55 with a combined income of $63,000 will probably be paying over 20% of their gross income to get a silver health plan.

I, and the others here, are not "ignoring a big factor"; the MAGI is closely tied to the income. As I said, IRA contributions seem to be the one major item that will make some difference. This seems to show that a couple with a combined income of up to about $69k would be well advised to contribute as much as it takes to reduce your MAGI below the threshold. If you can't do that, then you will be better off by reducing your gross income, by working less.

This is a bad way of setting fiscal policy. We're not talking about rich couples finding themselves in a strange tax situation; 2 people each earning $35K a year will hit this, and they could lose an eighth of their disposal income, if their earnings go above the threshold.

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Response to antigop (Original post)

Sun May 26, 2013, 07:18 PM

27. A job where you are making $63,000 does not come with some type of insurance?

 

What, where, how?

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Response to Herlong (Reply #27)

Sun May 26, 2013, 07:21 PM

28. In NYC, frequently. That was me for many years. Freelancer/ Contractor status.

 

This is the DU member formerly known as bettyellen.

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Response to Herlong (Reply #27)

Sun May 26, 2013, 07:23 PM

30. the $63,000 income is for TWO PEOPLE in the example. nt

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Response to antigop (Original post)

Sun May 26, 2013, 07:31 PM

37. Side note: About us file not found?

 

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Response to antigop (Original post)

Sun May 26, 2013, 07:33 PM

38. How is that possible, I put in $88,000/yr for 3 people, 2 are under 21 = $573/month $0 Subsidy.

 

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Response to JaneyVee (Reply #38)

Sun May 26, 2013, 07:39 PM

42. because you probably put in an age of 35 for the first adult.

35 is a lot less than 55 (agewise)

And the two dependents under 21 are a LOT younger than 55.

ETA: The PPACA allows companies to charge an older person up to 3 times what they charge a younger person. Each state can make the charges less than that. I don't know what California law is.

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Response to antigop (Reply #42)

Sun May 26, 2013, 07:43 PM

47. I put in 31, $88000/yr, 2 under 21, and it came to $559/month. Thats a great deal actually.

 

I get healthcare through my employer but I once inquired how much healthcare would be for my family and the insurance company quoted me $2600/month. The goal is a healthier population.

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Response to JaneyVee (Reply #47)

Sun May 26, 2013, 07:46 PM

50. $1026 per month IS NOT "AFFORDABLE" for a $63,000 income. NT

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Response to antigop (Reply #50)

Sun May 26, 2013, 08:12 PM

60. Not only have you pointed out

"$1026 per month IS NOT "AFFORDABLE" for a $63,000 income"

...that the age of the couple is a factor (http://www.democraticunderground.com/?com=view_post&forum=1002&pid=2905873), but you're ignoring a key point stated at the OP link:

Note: This calculator shows expected spending for families and individuals eligible to purchase coverage through Covered California under the Affordable Care Act. Under the law, maximum contributions to premiums will be based on modified adjusted gross income, while estimates in this calculator are based on the annual income entered by the user. The premiums in this calculator reflect estimates for Covered California silver plans.

It also doesn't reflect premium caps.
In fact, if you enter a couple aged 45 or 40 with the same income, you get completely different premiums, $664 and 588 respectively.

Still, based on modified adjusted gross income, the case couple in the OP would see likely pay a much lower premium.

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Response to ProSense (Reply #60)

Sun May 26, 2013, 10:17 PM

77. It's official: California sucks.

I keed, I keed.

As if a couple making $63,000 a year is anywhere near the poverty level.
Gosh, someone pulling down $5250 a month probably works for a company that even offers healthcare insurance, ya think?

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Response to Major Hogwash (Reply #77)

Mon May 27, 2013, 04:25 AM

87. As has already been pointed out, it's the couple's *combined* income

So think of 2 people each earning $2625 a month.

This would also apply to self-employed people, wouldn't it?

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Response to antigop (Original post)

Sun May 26, 2013, 07:44 PM

48. Also a MASSIVE marrige penalty. If single, and at $31.5k each (same as 63k joint)

the monthly premiums for a 55 year old are $513 (gross), $283 (subsidy), so $230 (net). For both then for the year would be 230x2x12 = $5,5520

Same two people now get married and have a total gross of $63,000 (same as before) but now the premiums are $1,026 (gross), $0 subsidy, so $1026 net. For both of them for the year it is $1026 x 12 = $12,312.

So by having $0 extra income but just getting married, they now pay $6792 more!

Congratulations on the wedding!

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Response to kelly1mm (Reply #48)

Sun May 26, 2013, 07:53 PM

55. $31.5k single does not equal $63k joint.

I've been married and single. It takes more money for a single person to subsist than the costs for each person of a couple. That's because housing is shared (single person has 100% housing costs...with a married couple, they each have 50% of that housing cost). It takes less per person to eat, when there's a couple. The couple also shares the costs of household goods, utilities, etc. Those costs are more when you're a couple, but not double.

For utilities, for example, the less I use, the higher the rate. So there's a basic price I have to pay for utilities. If a second person lived with me, we could use more utilities and pay a lower rate.

It is single people who are penalized. We also get screwed on income tax standard deduction.

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Response to Honeycombe8 (Reply #55)

Sun May 26, 2013, 07:56 PM

56. Ummmmm, ever hear of shacking up? Same economy of scale as being married (shared expenses)

but, because they are not married, no health care marriage penalty.

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Response to kelly1mm (Reply #56)

Sun May 26, 2013, 08:06 PM

58. You mean with a man? You know any man who's in the market for a 59 year old woman?

Me, either. But a Golden Girls situation is not out of the question. I'm going to give this thought for my golden years.

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Response to kelly1mm (Reply #48)

Tue May 28, 2013, 04:39 PM

115. kelly1mm, one important consideration in considering the new ACA and its

Rules and subsets of rules is this one -

It is a fact that people were told that should the cost of their employer-provided insurance exceed 9.5% of their income, they would definitely be eligible for help.

This was especially good news to families, or even to just married couples, where one person's "pre-existing condition" pushes their premium skyward. For instance, if you are a healthy 32 year old, and you are the employee at a company where insurance is provided, and yet on account of having a child with diabetes, your insurance premium takes up more than your 9.5% of your income, you were hopeful that assistance would be provided to you. Or you are healthy and your rate under the insurance is one thing, but your spouse's pre-existing condition ups the premium. So you expect relief. But wait - that relief will not be yours.

Yes, it turns out that buried in the 2,000 pages of legalese that makes up the ACA, is the statement that the 9.5% situation is based solely on the person covered by the employer, and does not extend to including costs creating by other members of the family. Then your premium will be quite excessive in terms of cost - but since (as in the examples described above) the majority of that cost comes from your child's or spouse's end of the premium, you get no help in paying for that exorbitance!

I just read yesterday in "The Press Democrat" here in Santa Rosa, Calif., that of all the provisions in the ACA, that is the Number One change cited as being needed to occur immediately. And that even some Dem legislators believe it should be changed.

But there is no possibility of any changes to be forthcoming. (At lest according to yesterday's article in "The Press Democrat." Democratic leadership is so scared that the whole thing would be thrown out were the ACA to arrive on the floor of Congress so that changes might happen that they won't for allow the possibility. And Republicans who are aware of how disastrous this clause is are wanting the whole thing scrapped. and that is all they aim for, - so I guess people will just have to "suck it up" and suffer.

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Response to antigop (Original post)

Sun May 26, 2013, 07:51 PM

54. Gee, if only someone had... what do you call it?

 

Predicted that this kind of thing would happen...

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Response to antigop (Original post)

Sun May 26, 2013, 08:30 PM

61. Does not have to be $1000. Put in a couple both 55 and $62,039 income. Then add $1 to income

and see the result.

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Response to antigop (Original post)

Sun May 26, 2013, 10:03 PM

76. $12312 a year in premiums + yearly out of pocket

I'm told for California that's cheap, but I don't see how a couple making $63000 a year in a place as expensive as California can afford to spend that much on medical care. The penalty would be tempting if both are healthy. It's the sick folks that will come out ahead -- which puts us about where we started.......

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Response to KentuckyWoman (Reply #76)

Sun May 26, 2013, 10:35 PM

82. Bingo we have a winner. Your comment is spot on.

Of course the real winner was Rahm Emanuel who has an entire industry pledged to seeing he gets whatever office he ever wants to run for. And also the woman that helped him write up the legalese for the law - and she now has a very plush job inside the industry itself.

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Response to KentuckyWoman (Reply #76)

Mon May 27, 2013, 03:40 PM

108. That couple would be exempt from the penalty.

People will be exempt from the penalty for not purchasing insurance if the cheapest plan available is more than 8.0% of their household income. But then they'd still be uninsured, which, as you said, puts us back where we started.

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Response to antigop (Original post)

Sun May 26, 2013, 10:21 PM

78. Calculator is not working properly. I guarantee it.

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Response to BenzoDia (Reply #78)

Mon May 27, 2013, 04:41 AM

89. Other calculators agree with it

Such as this one: http://kff.org/interactive/subsidy-calculator/

Their estimate of the gross premium for 55 year olds is slightly higher, but the amount you pay for $62k income after subsidy is the same:
Household income in 2014: 394% of poverty level
Unsubsidized Health Insurance Premium in 2014: $13,461
Maximum % of income you have to pay for the non-tobacco premium, if eligible for a subsidy: 9.5%
Amount you pay for the premium: $5,890
(which equals 9.5% of your household income and covers 44% of the overall premium)
You could receive a government tax credit subsidy of up to: $7,571
(which covers 56% of the overall premium)

5890/12 = $491/month.
And for $63k:
Household income in 2014: 401% of poverty level
Unsubsidized Health Insurance Premium in 2014: $13,461
Maximum % of income you have to pay for the non-tobacco premium, if eligible for a subsidy: None
Amount you pay for the premium: $13,461
(which equals 21.37% of your household income and covers 100% of the overall premium)
You could receive a government tax credit subsidy of up to: $0
(which covers 0% of the overall premium)


Same here: http://laborcenter.berkeley.edu/healthpolicy/calculator/
Income $62k:
Estimated monthly silver plan premium (without subsidy) $1,285
Estimated tax credit from the government $794
Your estimated monthly silver plan premium $491

Income $63k:
Estimated monthly silver plan premium (without subsidy) $1,285
Estimated tax credit from the government $0
Your estimated monthly silver plan premium $1,285

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Response to muriel_volestrangler (Reply #89)

Mon May 27, 2013, 09:03 AM

91. The disclaimers say that their estimates are based on household income while the law uses

modified gross adjusted income. MAGI can vary quite a bit between households depending on whether people are in business for themselves, working for a large employer, etc. For instance, self-employed people buying their own insurance may be able to deduct their premiums:

http://www.healthcare.gov/using-insurance/employers/self-employed/

There are other adjustments as well. That's why these calculators put out disclaimers, because they're not definitive by any means.

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Response to BenzoDia (Reply #91)

Mon May 27, 2013, 12:47 PM

93. That page doesn't talk about how to calculate an adjusted gross income

It just talks about an 'income' of 400% of FPL.

This page does not mention health insurance premiums in the calculation of either AGI or MAGI. If you are allowed to say "we have a gross income of $67k, and gross premiums of $12,312; if I do qualify for tax credits, then I'll pay 9.5% of (67000 minus (12312 minus the tax credit)), and since 67000 minus that amount is below 62040, then I do qualify for tax credits, therefore my previous calculation is valid", then the professionals haven't picked up on it yet.

And I'm not surprised, because the above calculation is damn difficult. In general, you don't specify how to calculate something by saying "you need to know the result of this calculation to know an input for one stage of this calculation".

A calculation would go like this, even for someone who knows they will get a tax credit of some amount:
Gross income = 60000 - between 3 and 4 times the FPL of $15510
maximum net premium = 0.095 * 60000 = $5700
therefore adjusted gross income = 60000 - 5700 = 54300
but that means the maximum net premium should be calculated as 0.095 * 54300 = $5158.50
therefore adjusted gross income = 60000 - 5158.50 = 54841.50
so max net premium = 0.095 * 54841.50 = $5209.95
etc. It will converge on some value in the end, but you have to do many iterations to find it. But I don't see any instruction from the government to deduct your premiums to work out your MAGI, when your MAGI will tell you how much your premiums are.

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Response to muriel_volestrangler (Reply #93)

Mon May 27, 2013, 01:15 PM

96. The page I provided has a direct link to the IRS' webpage detailing things that can deducted.

Alternatively, just look at a tax return form.

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Response to BenzoDia (Reply #96)

Mon May 27, 2013, 01:28 PM

97. I can't see it; and how can a current tax form help with a new system that hasn't started yet?

No current tax form will have the rule about "maximum net payment of 9.5% for up to 400% of FPL" in its method of calculated an AGI.

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Response to muriel_volestrangler (Reply #97)

Mon May 27, 2013, 01:38 PM

98. You don't need that information to calculate your adjusted gross income.

You just calculate it and if you happen to be off for whatever reason, the difference is reconciled later on.

If your tax credit was too small one year, you'll get a refund. If it was too big, then you'll owe money.

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Response to BenzoDia (Reply #98)

Mon May 27, 2013, 02:23 PM

103. But you're still guessing that the insurance premiums are taken off to calculate AGI

and that they reconcile it at the end of the year. If the government had actually said that, then the professionals wouldn't have been writing these calculators you are so sure are incorrect. So either the government has really screwed up on communicating how the calculation is done, or the professionals are right.

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Response to muriel_volestrangler (Reply #103)

Mon May 27, 2013, 02:48 PM

104. There's no guessing about it. It's specified in the healthcare.gov and irs.gov links I pasted and

on your tax return form. No simple internet calculator can account for the various combinations of deductions each household will take. That's why each calculator says stuff like:

Please remember this is just an estimate.


Under the law, maximum contributions to premiums will be based on modified adjusted gross income, while estimates in this calculator are based on the annual income entered by the user.


Does the calculator provide definitive estimates of what people will pay under the health reform law?

No


Under the law, maximum contributions to premiums will be based on modified adjusted gross income, while estimates in this calculator are based on the annual income entered by the user. Actual premiums in the Exchange are not yet known.

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Response to BenzoDia (Reply #104)

Mon May 27, 2013, 03:08 PM

106. Yes, but we can't find anything on the websites to confirm what you say

That's why I say you're guessing. You can point to disclaimers, but you haven't yet pointed to information that say the premiums will affect the gross income. And, since the gross income affects the premiums, to assume they both affect each other introduces problems.

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Response to muriel_volestrangler (Reply #106)

Mon May 27, 2013, 03:10 PM

107. Read my links. It's in there.

edit:

http://www.healthcare.gov/using-insurance/employers/self-employed/

If you’re self-employed and have bought health insurance, the cost of the health insurance may be deductible from your federal taxes. Learn more about the self-employed health insurance deduction.


http://www.irs.gov/uac/Newsroom/Dont-Miss-the-Health-Insurance-Deduction-if-Youre-Self-Employed

If you are self-employed, the IRS wants you to know about a tax deduction generally available to people who are self-employed.
The deduction is for medical, dental or long-term care insurance premiums that self-employed people often pay for themselves, their spouse and their dependents. The insurance can also cover your child who was under age 27 at the end of 2012, even if the child was not your dependent.


Tax return form:

http://imgur.com/f1V13Ea

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Response to BenzoDia (Reply #107)

Mon May 27, 2013, 04:16 PM

109. OK, currently health insurance premiums are deducted to work out AGI for the self-employed

You'd hope that this will continue; but with the tax credits that will lower the amount many pay, that may or may not still be the case. And the way to work it out still seems extremely unclear; we have 3 online calculators, produced from groups in the sector, that don't try to allow for this deduction, even when it could be 15% of a couple's income. If they've got it wrong, it's been rolled out very badly.

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Response to BenzoDia (Reply #107)

Mon May 27, 2013, 04:59 PM

112. What if you have a defined benefit pension but no health insurance?

If you have to pay the entire premium out of pocket and don't qualify for a subsidy because you are slightly over the income limit, can you deduct the cost from your taxes? Edited to add that in such a scenario the person is not self-employed but is still paying a huge chunk of their income in premiums.

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Response to senseandsensibility (Reply #112)

Tue May 28, 2013, 07:44 AM

113. I don't believe you can lower your AGI with your health insurance premiums if you're employed.

It might be worth consulting a professional about that one though (and defined pension benefits). I may be able to speak with an insurance professional in June. I'll let you know if I find the answer. And please do the same if you find out because I'd really like to know.

You should be able to itemize your healthcare costs though.

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Response to antigop (Original post)

Sun May 26, 2013, 10:29 PM

79. This does happen in the tax code

although the effects are usually much better hidden.

Unlike some posters up thread have said, the tax code is generally graduated, meaning that only the last dollar is taxed at the highest rates, whereas the first dollar is taxed at lower rates.

However, there are some situations where this isn't the case and $1 of extra income can result in a much higher tax bill ($1000's). They generally involve:

1) High enough income to push you into the AMT, combined with AMT susceptible taxes. I know of one couple who earned $500 more from a hobby in one year and owed $3,500 in extra in income taxes....

2) The "right" combination of earned income and capital gains, such that your overall AGI pushes your capital gains rate into the next tax bracket.

Not to mention the loss of deductions, exemptions, etc. once your income reaches a certain level.

I've seen the effective marginal rate as high as 62% for 2012 (for federal taxes, based on $5,000 chunks) , depending on the exact situation.

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Response to antigop (Original post)

Mon May 27, 2013, 04:57 AM

90. I've found a new way to keep the net premium down - add an unemployed under-25

If they're not earning, the figures change to:

Number of people in the household 3
Annual household income $63,000
Age of the first adult 55
Age of spouse 55
Number of children age 21-25 1

Estimated monthly silver plan premium (without subsidy) $1,256
Estimated tax credit from the government $757
-------------------------------
Your estimated monthly silver plan premium $499

With 1 21-25 year old child in the household, the cliff doesn't happen until about $78,200, when $638 in monthly premiums disappears.

This is good news for the unemployed offspring, of course - they can now say "hey, I'm saving you $600 a month in insurance premiums by living here. No way that I'm going to put more into the household budget!"

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Response to muriel_volestrangler (Reply #90)

Mon May 27, 2013, 01:00 PM

94. I noticed that as well....but if you don't have any dependents under 26.... nt

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Response to antigop (Original post)

Mon May 27, 2013, 01:03 PM

95. load of horseshit

 

this is what happens every time democrats pass republican legislation.

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Response to antigop (Original post)

Mon May 27, 2013, 01:43 PM

99. Fun with math.

 

For a real eye opening exercise, play with turbotax. Exceeding an income threshold for a family of four by $1, can make $4,000 difference in taxes. (EITC plus child tax credits)

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Response to antigop (Original post)

Mon May 27, 2013, 01:45 PM

100. I think the point of the OP is the need for a graduated scale

 

It is a big jump, one thousand dollars cost you more than six thousand dollars. Instead of a common sense graduated scale, where that additional thousand dollars shouldn't cost you more than that.

The idea of a graduated scale is of course, one dead on arrival in Washington DC. Not just because the Republicans control the House, but because the Democrats are hoping that the ACA fails, so they can implement single payer. So this, along with other inequities was designed in to the system, to cause it to fail, so that it would lead invariably to the desired and needed answer, single payer.

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Response to antigop (Original post)

Mon May 27, 2013, 04:26 PM

110. It's all bullshit anyway. Healthcare should be NON-PROFIT n/t

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Response to leftstreet (Reply #110)

Mon May 27, 2013, 04:39 PM

111. Bingo. Single payor Canadian style system.

Medicare works in Canada, no reason it couldn't work here.

I still find the idea of a tax penalty for not buying insurance reprehensible. Increase income tax rates on the wealthy to pay for single payor.

It's really easy to do in the USA, too. We already have single payor for those over 65, simply bring everyone into the system.

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