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Lower 2014 income can net huge health care subsidy
San Francisco Chronicle ^ | October 12, 2013 | by Kathleen Pender

Posted on 10/13/2013 6:02:49 AM PDT by Oldeconomybuyer

People whose 2014 income will be a little too high to get subsidized health insurance from Covered California next year should start thinking now about ways to lower it to increase their odds of getting the valuable tax subsidy.

"If they can adjust (their income), they should," says Karen Pollitz, a senior fellow with the Kaiser Family Foundation. "It's not cheating, it's allowed."

For people in their early 60s, "it's a huge cliff," going from 401 to 400 percent of poverty, Pollitz says. That's because insurers can still charge older people more than younger ones.

For younger people, moving below the poverty threshold has a much smaller impact because their premiums are lower to start with.

(Excerpt) Read more at sfgate.com ...


TOPICS: Constitution/Conservatism; Government; News/Current Events; Political Humor/Cartoons
KEYWORDS: failure; liberty; obamacare; rinocare

1 posted on 10/13/2013 6:02:50 AM PDT by Oldeconomybuyer
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To: Oldeconomybuyer

Race to the bottom.


2 posted on 10/13/2013 6:04:23 AM PDT by Zuse
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To: Oldeconomybuyer

Don’t be punished with financial success when failure may be within your reach.


3 posted on 10/13/2013 6:15:49 AM PDT by Proud2BeRight
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To: Oldeconomybuyer

Like everything else in the Obamacare abomination, the Law of Unintended Consequences rears its ugly head because nobody with a brain was involved. At least the IRS, as bad as it is, has a system that progressively increases the tax rate at higher income levels, but does not push you off a cliff. The (un)Affordable Healthcare Act actually penalizes people severely for having income that exceeds the subsidy level by even one dollar. Brilliant!


4 posted on 10/13/2013 6:21:41 AM PDT by TruthShallSetYouFree ( July 4, 1776: Declaration of Independence. Nov 6, 2012: Declaration of Dependence. R.I.P. America.)
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To: TruthShallSetYouFree
At least the IRS, as bad as it is, has a system that progressively increases the tax rate at higher income levels, but does not push you off a cliff.

Not quite true. Even the IRS pushes you off of a cliff if you have other subsidies, but maybe it's more correct to say that the high marginal rates faced by people who are trying to work their way thru welfare are more the fault of other agencies than the IRS.

By the way, in the world of Medicare, your costs change quite a lot for 1$ of income increase at several threshholds, but they aren't as large as a portion of salary as the premium increases for people below 65 who go from 400 to 401% of poverty level.

5 posted on 10/13/2013 6:27:18 AM PDT by Pearls Before Swine
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To: TruthShallSetYouFree

Unintended? I’m not so sure.


6 posted on 10/13/2013 6:31:05 AM PDT by 9YearLurker
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To: Oldeconomybuyer

“It’s not cheating, it’s allowed.”

That’ll be my defense next time I’m audited. *SPIT*


7 posted on 10/13/2013 6:33:15 AM PDT by Diana in Wisconsin (I don't have 'Hobbies.' I'm developing a robust Post-Apocalyptic skill set...)
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To: Pearls Before Swine

Yes, I was referring to the marginal rates. One often hears low-information folks saying that they don’t want to put in extra overtime because “that would put me in another tax bracket.” A single person who earns $35,350 is taxed at the rate of 15%. Should he or she earn another dollar, that dollar, and only that dollar, is taxed at the next bracket rate of 25%. The first $35,350 is still taxed at 15%, not 25%.

You do make an excellent point about all of the other credits that are not strictly part of the above analysis.


8 posted on 10/13/2013 6:34:54 AM PDT by TruthShallSetYouFree ( July 4, 1776: Declaration of Independence. Nov 6, 2012: Declaration of Dependence. R.I.P. America.)
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To: Oldeconomybuyer

This has to be intentional, because anyone with an 8th grade education should be able to do the math to see how ridiculously stupid this is... I figured this out a over a year ago when I first looked at the tables.. Your “marginal tax” (tax, plus loss of “subsidy”) is astronomical in this income level. You have to make something like $10,000 more a year once you lose the subsidy to just break even.

So, Mr and Mrs middle income wage earners, making a combined $64,000/year, I’ve got good news, you did such a good job this year you both will get a 4% pay increase!!!! With inflation so low (all praise to Lord 0bama, for keeping inflation in check, he’s always thinking about helping the little guy) now you are movin’ on up in the world!!!!!

Too bad your take home pay will now go down several thousand dollars......


9 posted on 10/13/2013 6:48:48 AM PDT by machman
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To: Proud2BeRight

Two Americas seems to be the ultimate goal...

For now they have a problem because there are three Americas...

The elites...(zero and cohorts along with McCain and his ilk)...

The already dumbed down masses...

And those who resist. We’re their problem.

Thank God for men like Sen. Cruz!


10 posted on 10/13/2013 7:15:53 AM PDT by Heart of Georgia
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To: Pearls Before Swine

For those not covered by an employer plan and falling between 138%-400% of poverty level, they get no subsidy and can’t even buy on the exchange.

IOW...Dey B screwed!...PS...They also get fined for not having coverage.

I would think that group would contain lots of O’bots that voted TWICE for Hopey Changy.


11 posted on 10/13/2013 7:39:59 AM PDT by Beagle8U (Free Republic -- One stop shopping ....... It's the Conservative Super WalMart for news .)
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To: Zuse

Yes don’t be upset because overeaching regulations forced you to shut down your formally profitable small business and go on Social Security early. Just because you had to eat up your savings trying live for a few years is no reason to be upset. Now you will get subsidized health care.


12 posted on 10/13/2013 7:40:44 AM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped.)
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To: Beagle8U
For those not covered by an employer plan and falling between 138%-400% of poverty level, they get no subsidy and can’t even buy on the exchange.

I thought everyone could buy on the exchange (assuming it worked) and that the only issue was cost and subsidy. How can they bar someone from looking on the exchange for an insurer?

13 posted on 10/13/2013 7:48:01 AM PDT by Pearls Before Swine
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To: Pearls Before Swine

I guess it was an oversight?

They were banking on all the states accepting the medicaid expansion to 138% of poverty level. More that half the states didn’t.

I think it was a different ‘glitch’ that zapped the other ones?


14 posted on 10/13/2013 8:03:14 AM PDT by Beagle8U (Free Republic -- One stop shopping ....... It's the Conservative Super WalMart for news .)
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To: Oldeconomybuyer

Where’s my Free health care at?


15 posted on 10/13/2013 8:11:11 AM PDT by SkyPilot
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To: Pearls Before Swine

I misspoke on that. 138-400% do get the subsidy on on the exchange.

Those that fall between 100-138% don’t, and the exchange will tell them they are covered by medicaid so they need to sign up for that. Except the majority of states didn’t accept that.

With any luck all the poverty cases will move to blue states to get free medicaid.


16 posted on 10/13/2013 8:18:29 AM PDT by Beagle8U (Free Republic -- One stop shopping ....... It's the Conservative Super WalMart for news .)
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To: Oldeconomybuyer

Now is the time to start an IRA.


17 posted on 10/13/2013 8:31:46 AM PDT by Mike Darancette (Right Wing Yahoos taking Over the GOP --YAHOO!)
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To: Zuse

Have a neighbor that works for Blue Cross and was talking to him yesterday. He said the new ‘talk’ is DIVORCE. He used me and hubby as an example. Hubby has a really good retirement income. Me not so much. My income is derived from an annuity account. If not for hubby I would qualify for $0 health insurance through Obamaare. Would save us about $10k per year as is.


18 posted on 10/13/2013 8:32:16 AM PDT by sheana
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To: Oldeconomybuyer

What is that a picture of?


19 posted on 10/13/2013 8:32:23 AM PDT by tbw2
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To: Proud2BeRight

Can you lower the income threshold on which Obamacare subsidies are based by contributing to a 401K or traditional IRA?


20 posted on 10/13/2013 8:32:52 AM PDT by tbw2
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To: tbw2

Chinese peasants reading a decree from Mao circa 1950-ish. Very much like the ABC Evening News.


21 posted on 10/13/2013 8:50:20 AM PDT by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
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To: Oldeconomybuyer

Every dollar of subsidy spent is either borrowed from china or is borrowed from our grandchildren, great grandchildren, great, great grandchildren and great, great, great grandchildren. How is that good news bender?


22 posted on 10/13/2013 9:50:36 AM PDT by LibLieSlayer (FROM MY COLD, DEAD HANDS!)
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