OT: Obamacare… Don’t say we didn’t warn you…

[spdrun]

Hah, boss, I have insurance now WITH OR WITHOUT YOU.

Buh-bye, have a nice life, hope a bus doesn’t hit you!!!!!

[bearishgurl]

[quote=The-Shoveler] . . . This will end up much worse than doing nothing, (You might want to check if your company will cover your spouse and kids next year). . . [/quote]

Shoveler, most companies and govm’t entities OFFER spouse and children coverage but the employee has to pay all or nearly all of their premiums out of his/her pay. Most company and govm’t plans charge the same child premium whether the employee has one child or ten children. Minor children and college students up to age 26 are relatively cheap to cover and lower-income employees in CA can just sign up for “Healthy Families” which has a sliding scale of $37 – $57 for a monthly premium for the first child and lower for succeeding children, IIRC.

http://www.healthyfamilies.ca.gov/Home/default.aspx

In addition, military retirees can put a 18-26 yo son or daughter on Tricare Prime (HMO) for a $422 ANNUAL premium. This premium is not income-dependent or dependent on the kid being a “FT college student.”

It is the SPOUSE who is traditionally expensive on employee health plans. The only time it is worth it for the employer to fully cover a SPOUSE is when the SPOUSE also works for that same employer and is eligible for healthcare coverage in their own right. It is patently UNFAIR to single employees when married employees or those employees in registered domestic partnerships get generous spouse coverage at low or no cost to the employee. This amounts to unjust enrichment to some employees due to marital status.

If your able-bodied SPOUSE needed medical coverage in the past and you couldn’t afford his/her premiums out of your pay, then why weren’t they WORKING enough hours somewhere to get their own coverage?

Sorry, the presence or absence of minor children in the home have nothing to do with it. And this is coming from a mom.

Come 2014, unemployed spouses will be able to get coverage on the state exchanges but they will still have to pay what is remaining of their monthly premium after any tax credits they are eligible for are taken into consideration.

[spdrun]

Bearishgurl, so you’re saying that people should be forced into having two-working-parent families by overly high insurance premiums?

Remember that child-care is ALSO expensive. If this enables more families to have only one breadwinner (or causes families to have both parents working less than full time), this can only be a good thing. Americans work too much, too hard as it is. We should be more like the French.

(The economic problems in France come from other sources, like the difficulty of firing bad employees.)

[bearishgurl]

[quote=UCGal][quote=bearishgurl]

flu, you, all of people stand to be on the “winning side” of this HCRA equation if you retire early. Had the HCRA never become law, you might have been required to pay $2000+ month just for yourself for coverage (for a crappy HMO) :=0

Go check out coveredca.com and quit complaining.[/quote]
Actually – FLU will likely not qualify for subsidies based on his income. Subsidies (tax credits) only apply to those with income < 4 times poverty level. And it's MAGI, not AGI income. (MAGI income = your AGI income PLUS your 401k/IRA contributions.) That said - I suspect FLU will benefit because of the ban on pre-existing conditions. He’s relatively young – and premiums are based on age. His medical issues will not jack his rates up or allow insurers to not insure him.

This will give FLU the opportunity to do consulting, entrepreneurial ventures, etc – and not be tied to an employer for healthcare.

As far as retirees – Any non-government retiree that was firmly counting on retiree healthcare hasn’t paid attention for the past decade. It’s gone away along with pensions. And it was NEVER protected under PBGC, the way pensions were.

I know a lot of folks on the early-retirement.org board who are waiting till October to verify the exchange rates – then turning in their notices at work… Access to insurance for the early retiree has been the big crap shoot preventing people who would otherwise retire from doing so.

Lots of discussion over on that board about 4x poverty rate thing (and the cliff on the other side if you don’t manage it right.) How that effects the roth conversion plans (don’t convert to roth because it might kick you above that threshold.)[/quote]

The bolded portion of your statement is what I was referring to, UCGal. I realize flu likely isn’t eligible for tax credits. Since he is still young, I’m guessing that he can probably actually avail himself of the Platinum Plan for $500 mo (+/- $50).

I believe the details which were recently added to the covereca.com site regarding those four “Enhanced Silver” Plans are designed for those early retirees you are talking about – the 55+ boomer crowd who will likely qualify for tax credits.

My understanding is that a Covered CA applicant’s tax credits will be based upon the income they reported on their state tax return for 2012, unless they can prove it is substantially different now. The problem with CA private workers who are considering retiring on or before 12/31/13 or CA public workers considering retiring by 3/31/14 (to be eligible for the 2014 COLA) is that they will have a full year’s income as a “worker bee” on their 2013 tax return, which could keep them from becoming eligible for the credits until 2015. I don’t know how the exchanges are going to handle this issue, since ostensibly this group won’t be “employees” anymore and if they DO have a pension, it is likely nowhere near what their income was while working.

Gen X/Y should start REJOICING whilst contemplating applying for all those lofty job openings at your work that boomers will vacate come 2014. All because of the HCRA!!

[bearishgurl]

[quote=spdrun]Bearishgurl, so you’re saying that people should be forced into having two-working-parent families by overly high insurance premiums?

Remember that child-care is ALSO expensive. If this enables more families to have only one breadwinner (or causes families to have both parents working less than full time), this can only be a good thing. Americans work too much, too hard as it is. We should be more like the French.

(The economic problems in France come from other sources, like the difficulty of firing bad employees.)[/quote]

No, what I am saying is that US employers who provide costly full (or nearly full) spouse health coverage are discriminating against single employees, including unattached lesbian and gay employees.

In this day and age, having children is a choice, and, whether single or married, the cost of child care goes along with the territory. Why should employees who don’t have children or will never have children subsidize the healthcare cost of employees who choose to leave an able-bodied adult at home with or without children and cover them (mostly with employer money)? Just because an employee has an unemployed “partner” doesn’t mean that he/she is “worth more” to an employer than one of their single employees.

I’m not against nuclear families with one worker but I am against paying an employee more because that is their chosen lifestyle. When an employer gives a(n) (often $500+ mo) “subsidy” to an employee in the form of a healthcare allowance which other employees aren’t eligible for because of marital status, that is real money being paid to the married employee which amounts to unjust enrichment to only a portion of employees based upon marital (or RDP) status.

This is the main reason why large govm’t employers such as the City of SD changed over to having “cafeteria plans” in recent years. EVERY represented employee gets ~$6600 to spend per year on healthcare, including dental and vision care if they wish. If they are trying to cover more people than themselves with that, they are going to have a lot taken from their checks every payday UNLESS they sign up for the cheapest Kaiser HMO for everyone in their family, in which case they will have ~$175 mo taken out of their pay for spouse coverage.

This is the fair way to deal with ALL employees.

[spdrun]

I’m confused. You said that most companies offer spousal coverage, yet the employee has to pay it out of pocket anyway (at a lower rate than an individual plan, though).

So the exchanges will essentially extend this to families where one parent is self-employed and the other is a homemaker or part-timer. It doesn’t sound like it will discriminate based on gender either, since the exchanges will be available to all who aren’t covered by an employer.

Isn’t this a good thing? And yes, I think that two-parent families, with both parents in total working less than two shifts should be encouraged. It’s good for the kids, and with unemployment being high as it is, taking some people out of the workforce voluntarily would help spread the wealth.

Sort of offering people on an overbooked flight a $500 voucher if they take the next plane 🙂

[livinincali]

[quote=bearishgurl]
Since then, I have done some preliminary research on coveredca.com. However sketchy the info that is avail on there now, the tax credits based upon adjusted gross income and the premiums which are on there now are likely close to an accurate representation of what they will be, at least in 2014. (I may no longer be a resident of CA in 2015 and I checked the exchange websites of the two states I am considering relocating to and their premiums are approx. $100 – $150 mo less for me than the CA exchange for the Gold and Platinum plans, respectively.)
[/quote]

So it’s ok when you receive subsides in the form of tax credits.

[quote=bearishgurl]
This is the main reason why large govm’t employers such as the City of SD changed over to having “cafeteria plans” in recent years. EVERY represented employee gets ~$6600 to spend per year on healthcare, including dental and vision care if they wish. If they are trying to cover more people than themselves with that, they are going to have a lot taken from their checks every payday UNLESS they sign up for the cheapest Kaiser HMO for everyone in their family, in which case they will have ~$175 mo taken out of their pay for spouse coverage.

This is the fair way to deal with ALL employees.[/quote]

It’s not ok when some employees subsidize other employees.

This is the fundamental problem I have with people who claim these type of programs are good for the whole. It’s really only good for the whole if you happen to be on the right side of the balance sheet where you get a net benefit at somebody else’s net loss. If total medical spending as a percentage of GDP doesn’t go down after the implementation of this program it just means some are net winners while others are net losers.

[spdrun]

Assuming that government revenue stays approximately constant, maybe the subsidy dollars will be taken from somewhere else so that EVERY American ends up a winner.

There’s a lot of fat to be trimmed in law enforcement, imprisonment, and defense, and US lawmakers are slowly starting to see reason on those matters. (Drug law reform, sentencing reform, reluctance to unilaterally attack Syria, etc)

If we didn’t spend so much on death and violence, we’d have more money to spend on life, education, research, and infrastructure. We’re finally waking up to this fact, 33 years after Ronnie Ray-Gun graced the White House with his presence.

[bearishgurl]

[quote=spdrun]I’m confused. You said that most companies offer spousal coverage, yet the employee has to pay it out of pocket anyway (at a lower rate than an individual plan, though).

So the exchanges will essentially extend this to families where one parent is self-employed and the other is a homemaker or part-timer. It doesn’t sound like it will discriminate based on gender either, since the exchanges will be available to all who aren’t covered by an employer….[/quote]

Yes, “group rates” for an employer-sponsored health plan are MUCH lower than rates for individual plans. But even more important was the fact that employer-sponsored health coverage could not discriminate against a SAH spouse or partner who had pre-existing conditions as individual coverage did. Many employees who covered spouses could not even get coverage at all on the open market for them because of their pre-existing conditions.

All this is changing with the inception of the HCRA (“Obamacare”). Now the exchanges, although not priced as cheaply as employer group rates, will treat every applicant who is the same age and gender exactly the same no matter what their pre-existing conditions were or are.

If a family who applies to insure an unemployed spouse on the state exchange qualifies for tax credits, then the unemployed/self-employed spouse’s premiums could very well be as low or even lower than employer group rates (the actual premium the employed spouse’s employer would pay for that spouse coverage). In CA, the size of the tax credit will depend on the AGI (or MAGI, if applic, as UCGal stated) reported on their 2012 state tax return.

[bearishgurl]

[quote=livinincali][quote=bearishgurl]
Since then, I have done some preliminary research on coveredca.com. However sketchy the info that is avail on there now, the tax credits based upon adjusted gross income and the premiums which are on there now are likely close to an accurate representation of what they will be, at least in 2014. (I may no longer be a resident of CA in 2015 and I checked the exchange websites of the two states I am considering relocating to and their premiums are approx. $100 – $150 mo less for me than the CA exchange for the Gold and Platinum plans, respectively.)[/quote] So it’s ok when you receive subsides in the form of tax credits.[/quote]

Yes, livinincali. That is the ONLY reason “it’s okay.” I was completely okay with the way things WERE. I really don’t want to leave my carrier but they have decided to leave us (their ~50K indiv policyholders in CA). The tax credits are the only thing I can feel good about in having to sign up on the state exchange. For all we know, the HCRA may end up being a disaster and be abolished by 2015-16. To make the “numbers work,” the exchanges have to sign up a LOT of “relatively healthy” people, like myself. Before the HCRA was announced (in March 2010), my monthly premiums were ~50% lower.

[quote=livinincali][quote=bearishgurl]This is the main reason why large govm’t employers such as the City of SD changed over to having “cafeteria plans” in recent years. EVERY represented employee gets ~$6600 to spend per year on healthcare, including dental and vision care if they wish. If they are trying to cover more people than themselves with that, they are going to have a lot taken from their checks every payday UNLESS they sign up for the cheapest Kaiser HMO for everyone in their family, in which case they will have ~$175 mo taken out of their pay for spouse coverage.

This is the fair way to deal with ALL employees.[/quote]It’s not ok when some employees subsidize other employees.[/quote]

I completely agree.

[quote=livinincali]This is the fundamental problem I have with people who claim these type of programs are good for the whole. It’s really only good for the whole if you happen to be on the right side of the balance sheet where you get a net benefit at somebody else’s net loss. If total medical spending as a percentage of GDP doesn’t go down after the implementation of this program it just means some are net winners while others are net losers.[/quote]

Everyone has a choice on which side of the “balance sheet” they want to be on, here. You read UCGal’s post where she stated that posters on earlyretirement.org are trying to figure out how to become eligible for tax credits by retiring earlier than planned or manipulating the types of retirement accts they are contributing to. They can also take a demotion NOW, work less hours or take LWOP or FML for part or all of the balance of 2013 in order to be eligible for tax credits in 2015. There are more than nine ways to skin a cat.

The “rules” have changed now so if you’re completely a W-2 worker who wants to insure yourself or a family member though a state exchange, you have to figure out a way to “work the system” if you want to be eligible for a tax credit or a higher tax credit. For many high earners, it isn’t worth it to do this, especially if all their family members are currently covered through employer(s) and they are happy with that coverage.

If you are a high earner and like it that way but need to get yourself or a family member health coverage through a state exchange, then suck it up and pay the premium they ask for whatever level of coverage you desire.

None of us really know how the nuts and bolts of the HCRA are going to play out until a year or two passes.

[UCGal]

Back to the OP.
In reading about this elsewhere I see the following:

The IBM changes have NOTHING to do with the Affordable Care Act. They are moving MEDICARE age employees, from an IBM subsidized medigap policy, to giving a subsidy for the retired, age 65+ employee to get insurance through a Medicare Exchange program.

http://www.reuters.com/article/2013/09/07/us-ibm-healthcare-idUSBRE98602Z20130907

IBM is still subsidizing the retired medicare eligible employees – just letting them chose their own plan (and take on the risk of premium increase.)

According to the wall street journal – Time Warner is the same situation – they announced the change for medicare eligible retirees.

http://online.wsj.com/article/SB10001424127887324549004579063170451763800.html

In some ways this may benefit the retiree – they can apply the employer subsidy to any plan offered on the exchange – vs a one size fits all choice.

[no_such_reality]

[quote=UCGal]
That said – I suspect FLU will benefit because of the ban on pre-existing conditions. He’s relatively young – and premiums are based on age. His medical issues will not jack his rates up or allow insurers to not insure him.

This will give FLU the opportunity to do consulting, entrepreneurial ventures, etc – and not be tied to an employer for healthcare.

As far as retirees – Any non-government retiree that was firmly counting on retiree healthcare hasn’t paid attention for the past decade. It’s gone away along with pensions. And it was NEVER protected under PBGC, the way pensions were.

I know a lot of folks on the early-retirement.org board who are waiting till October to verify the exchange rates – then turning in their notices at work… Access to insurance for the early retiree has been the big crap shoot preventing people who would otherwise retire from doing so.

Lots of discussion over on that board about 4x poverty rate thing (and the cliff on the other side if you don’t manage it right.) How that effects the roth conversion plans (don’t convert to roth because it might kick you above that threshold.)[/quote]

Yes, that freedom from insurance being tied to employment is a huge item.

The crap shoot on costs is the other. That cliff, when the parents are in the 40s is a $193/month for a family of 4. But in the mid-50s, that cliff is $548/month. Or about $6500/year.

For a two 60-64 year olds, that tipping point is $62,039/yr. The cost is $1600/month (for gold) and $1366 (for Silver) and the credit is $863/month. That’s huge.

Since I have a young child if I retire and push my realized income below $78,120 (today) I would get a $664/credit or $0 if I hit $78,120 or more. The difference is my insurance $750-$950/month between ages 40-64 or is it $950-$1750/month.

CD laddering and realizing five years income in one year will become necessary so that you pay high one year and reap benefits the other 4.

Or plan B, just insure you have $200K/yr in income.

[UCGal]

[quote=bearishgurl]
Everyone has a choice on which side of the “balance sheet” they want to be on, here. You read UCGal’s post where she stated that posters on earlyretirement.org are trying to figure out how to become eligible for tax credits by retiring earlier than planned or manipulating the types of retirement accts they are contributing to. They can also take a demotion NOW, work less hours or take LWOP or FML for part or all of the balance of 2013 in order to be eligible for tax credits in 2015. There are more than nine ways to skin a cat.

The “rules” have changed now so if you’re completely a W-2 worker who wants to insure yourself or a family member though a state exchange, you have to figure out a way to “work the system” if you want to be eligible for a tax credit or a higher tax credit. For many high earners, it isn’t worth it to do this, especially if all their family members are currently covered through employer(s) and they are happy with that coverage.

If you are a high earner and like it that way but need to get yourself or a family member health coverage through a state exchange, then suck it up and pay the premium they ask for whatever level of coverage you desire.

None of us really know how the nuts and bolts of the HCRA are going to play out until a year or two passes.[/quote]

Ummmm. I don’t think I said that.
Folks on E-R.org are discussing that they are now FREE to retire without worrying about pre-existing conditions.

They are discussing how it can pay off if you can manage your retirement budget to be under the ACA subsidy levels… But not from a still working perspective, but from a retired (early) perspective. And that crowd how ALWAYS focused on the spending side of retiring early. (Need a smaller nest egg if you live on the cheap.)

One of the tools previously used – pre ACA – was doing ROTH conversions – up to the top of your current tax bracket… for a tax payoff in the future. That has been discussed as being weighed against losing the subsidy if you convert too much and end up outside the subsidy.

Retirement contributions (for those still working) DO count as income (not tax defered from an ACA tax subsidy point of view… just as it’s not tax deferred from a SS contribition point of view.). Hence the MAGI vs AGI.

BUT – they are not talking about retiring earlier than planned. This group is heavily focused on saving/investing so that they can retire early… So there’s no lack of planning… the goal of most is to become financially independent and retire early. But many held back because of healthcare concerns. They had the money – but were worrying about not being able to get affordable insurance. Staying in jobs they They are talking about having the FREEDOM to retire because pre-existing conditions are off the table, and health care is possibly more affordable than they expected (with subsidies.)

No one is talking about taking a demotion.

[spdrun]

The real question is “why was the Obamacare law written in such a fucking boneheadedly stupid fashion?”

Instead of making subsidies end at 400% of FPL, they should have gradually tapered subsidies to zero depending on family income, number of dependents, etc

[UCGal]

Yep. I’ve been looking at the same things – weighing it all.
My husband is a few years older than me – so he’ll be going on Medicare sooner. That’s a relatively known price. (Limits on increases tied to CPI.)

But for me and my minor sons – I’ve got to figure out the most frugal way to get coverage – or I have to work a lot more years – JUST for health insurance. I know the cobra costs for my current insurance – and they are similar (slightly better coverage – same cost) to what I can get from insurer privately… and the silver plan of the exchange is in the same ballpark.

I hadn’t looked at a 5 year plan (push 5 years of income into one year – so you qualify for 4 years of lower income/subsidies.) But I’d looked at pushing all deductible expenses into one year (prepay prop taxes, etc), and income into the other. (Sell stocks with gains, etc). So it bounces 1 year with subsidies, 1 year without… I like your idea better – except the interest rate issue.

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