It's tax time. It's also time to work out the details of what the Affordable Care Act has done this past year. Yes, I'm retired, living on SS and what little the recession left of an IRA - I qualify quite easily for an ObamaCare subsidy for my wife. At least for the cheap one, with a $7,000 deductible.
But last year my wife and I had some serious health costs, requiring that we dip into that meager IRA to pay the nearly $10,000 that was required of us. The result, when doing taxes, was that by paying our health costs we "earned" too much money in 2016 and have to re-pay some $1500 of the ACA subsidy. Because our health costs were exceptionally high last year the health care subsidy was reduced for the year!
In unison now, all chant: "That's really retarded!".
But wait, it gets better! Because 2018 subsidies are based on 2016 income, it will go down for that year as well, requiring another big dip into the IRA to comply with the law. And because income will then rise for 2018, the subsidy for 2020 will fall yet again. A never ending cycle, where "Affordable" means "take everything they have" to buy what the idiots on the hill require. (Is there a person out there that doesn't think the way we chain the poor to charity is not intentional?)
So please, Mr. President, get this "affordable" travesty off my back before the IRS takes a lifetime of savings, my home, my car and sends the sheriff to auction off my clothes and escort me to a new home under the bridge. Leave me be, to file bankruptcy as required but keep my home and some semblance of a decent standard of living in my waning years.
I am sincerely sorry to hear about your troubles. A detached retina costing me $7,000 out of pocket last year led me to some helpful tips. I hope you don't mind if I share a few.
1) You may not be able to change plans at this point, but if you have a $7,000 deductible, you might try getting an HSA account if your current plan allows it. You can then do a once in a lifetime, tax-free transfer of funds from your IRA to your HSA. That way you can pay future expenses with the HSA and not have an IRA withdrawal show up as taxable income and impact your subsidy.
2) Even though your projected income is based on past income, I was able to claim a reduction in my projected income mid year, which led to better rates on my premiums. They usually just need some documented proof.
3) If financial pressure puts your home at risk, which sounds like a big worry for you, then you might want to look at homestead exemption laws for each state. They provide varying levels of equity protection for homes and other possessions. Some also protect IRAs and pensions.
Best of luck to you, Wilderness.
Already changed plans; according to the info received last year my subsidy went up nearly 50% and allowed the purchase of a much better plan. Of course, if they reduce that subsidy I really have a problem.
Though of changing it, but not sure how to "prove" I won't extract funds from a savings account. It's not like I changed jobs and have a lower salary.
Not really - at this point the home is not in jeopardy. 5 years of this crap and it could be, though! And it DOES hurt to see that much of the IRA saved for good times waft away on political wings, with the resulting loss of living standard. Waiting with bated breath for the wife to hit 65 and get off Obamacare and onto medicare. Lousy insurance, but better than this!
Thanks, promisem. One way or another it'll work out.
All insurance is fairly lousy, its a lousy system. I have what is considered top tier insurance and when I actually got seriously ill it only covered 50% of the true costs.
But better lousy insurance than no insurance at all.
Wow - that would really hurt. And it is, after all, what insurance should be about - to share the occasional extraordinary costs among everyone. Mine did better than that, and I'm glad I had it. It's just that idea that because I paid for higher than normal health care costs I'm suddenly hit with greater insurance costs as well. Doesn't make sense!
Yeah, I was pretty confused but they have a long list of conditions with 50% coverage for whatever reason and I got one of those.
Then one person at my company had a very expensive cancer treatment and they next year they double all of our rates.
It pisses me off no end.
When I was still working we lost our insurance because of one person. It went so high the company (small one) could no longer afford insurance for employees. There was talk of increasing the employee portion of the cost, but no one could afford it!
But that's kind of like dental insurance; some years ago it was part of a cafeteria plan at my company and I carefully went through all possible scenarios for my family, from no care to lots of crowns and other expensive care. In not a single instance was it cheaper to have insurance. Actual care didn't matter - it was always cheaper to simply pay for it. I sometimes look at dental plans now, and have always found the same thing; dental insurance can never pay for itself regardless of how high the bills are for dental care.
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