What happens with Health Care (Page 2)

trinnas - 2012-06-29 11:14 AM

Whether you like it or not it is more economically advantageous if you are in about the top half of the middle class to drop your insurance and pay the "tax".

If you are poor you will have health insurance because the government will pay for it.

If you are in the lower end of the middle class the government will subsidize your insurance to the point of making it advantageous to a wash to have insurance.

If you are rich you will have insurance because premiums are less than 2.5% of your income.

If you are mid to upper middle class you get no subsidies, your premiums will be going way up and it makes more sense particularly if you are young without a family to forgo insurance and pay the "tax".

tech_geezer - 2012-06-29 11:25 AM

This is a bad idea.

If you pay the penalty rather than get the coverage, you get no coverage for the medical expenses that you incur in the time that you are uninsured.  This would be the emergency room care for the car wreck, the setting of the broken arm, the IV fluids for a bad case of vomiting and diarrhea, ... any emergency care.  There will be enrollment periods to make sure that there is a long time between time you discover that you need coverage and when it is in force.  You might be able to game the system for some long term medical coverages but you would not get good affordable health care that you could have gotten for your penalty money.  Current estimate say that the penalty is greater than the insurance which is as it should be.

TW

 

tech_geezer - 

If you pay the penalty rather than get the coverage, you get no coverage for the medical expenses that you incur in the time that you are uninsured.  This would be the emergency room care for the car wreck, the setting of the broken arm, the IV fluids for a bad case of vomiting and diarrhea, ... any emergency care.  There will be enrollment periods to make sure that there is a long time between time you discover that you need coverage and when it is in force.  You might be able to game the system for some long term medical coverages but you would not get good affordable health care that you could have gotten for your penalty money.  Current estimate say that the penalty is greater than the insurance which is as it should be.

TW

 

dontracy - 2012-06-29 11:35 AM

There are currently enrollment periods in place with the law?

Let's say you're hit by the falling tree on Saturday.
On Monday you buy insurance.
You'd be liable for those two days over the weekend, assuming no enrollment waiting period.

It's not gaming the system if it's legal.

Let's take another real world scenario.
Most people in my industry are self employed. They might be on a spouse's insurance plan,  go without insurance, or in many cases have a catastrophic plan with very low premiums. Very few I know of buy full HMO type plans on the open market.

Seems advantageous to carry the catastrophic coverage for the cases of falling tree limbs, then just buy a full coverage plan if some high ticket treatment is needed.  Then go back to the catastrophic coverage after that treatment.

Would you be liable for the tax if you have catastrophic coverage?

trinnas - 2012-06-29 11:30 AM

um No Not as far as I am aware remember you cannot discriminate for any preexisting conditions.  And No not for many middle to upper middle class who will not get subsidies.

Look at what you pay for ins and tell me is it greater or less than 2.5% of your salary?

The likelihood is also that when your company drops you they will throw you a bone by increasing your salary slightly, not enough to make up for the additional insurance cost to you as they still have to pay the fine for dropping you.

You don't believe me fine, watch and see.

 

Left Brain - 2012-06-29 9:51 AM

 

That's even better!!

trinnas - 2012-06-29 9:49 AM

trinnas - No but you will not be allowed to only have this type of insurance you and the Ins. companies are required to buy/provide a minimum amount of coverage.  The kind of policy you are talking about will not be available/legal.

dontracy - 2012-06-29 10:51 AM

velocomp - 2012-06-29 10:08 AM

I assume that costs will continue to rise as they have for the past x years.  I don't believe for one second that anything this program does will lower HC costs.  My job within Gov has seen my costs increase significantly for the past x years.  The place I work continues to pay the same amount (less percentage).  The budget gets tighter and tigher each year with cuts every year (again this is a local gov, so they are not going to go out of business).  I see no reason why they at some point won't decide to not pay for health insurance at all.  I assume that just offering for the employees to buy insurance won't be enough to avoid the penalty.  

I really have no idea how a Local Government will be affected by this.  Hopefully not at all.

scoobysdad - 2012-06-29 10:58 AM We were also told that ObamaCare would not be funded by a tax increase and that if we made under $200K we wouldn't have to pay anything more.

jgaither - 2012-06-29 11:05 AM

ok, I understand now.  You're assumption is that your company is going to drop healthcare eventually anyway based on past experience of healthcare increasing and continued healthcare increases in the future, right?  Well, that makes sense. I was framing it in the context of "obamacare is doing this" when really it's a course of action that is occurring anyway.  That's my mistake.

I've seen some other posters say you'll be covered in a catastrophe by medicare or something, but I haven't seen anything stating as such.  My impression was that you'd still be on the hook if you didn't have insurance and it would still be handled the same as today.  Does anyone have anything that shows that people who pay the tax will be covered by insurance in the event of a catastrophe?  I'm not saying it's not true, just saying I haven't seen it and I'd like to for my own edification.

dontracy - 2012-06-29 11:35 AM

There are currently enrollment periods in place with the law?

Let's say you're hit by the falling tree on Saturday.
On Monday you buy insurance.
You'd be liable for those two days over the weekend, assuming no enrollment waiting period.

It's not gaming the system if it's legal.

Let's take another real world scenario.
Most people in my industry are self employed. They might be on a spouse's insurance plan,  go without insurance, or in many cases have a catastrophic plan with very low premiums. Very few I know of buy full HMO type plans on the open market.

Seems advantageous to carry the catastrophic coverage for the cases of falling tree limbs, then just buy a full coverage plan if some high ticket treatment is needed.  Then go back to the catastrophic coverage after that treatment.

Would you be liable for the tax if you have catastrophic coverage?

scoobysdad - 2012-06-29 9:58 AM We were also told that ObamaCare would not be funded by a tax increase and that if we made under $200K we wouldn't have to pay anything more.

trinnas - 2012-06-29 10:14 AM

If you are mid to upper middle class you get no subsidies, your premiums will be going way up and it makes more sense particularly if you are young without a family to forgo insurance and pay the "tax".

dontracy - 2012-06-29 11:35 AM 

...

There are currently enrollment periods in place with the law?

Let's say you're hit by the falling tree on Saturday.
On Monday you buy insurance.
You'd be liable for those two days over the weekend, assuming no enrollment waiting period.

It's not gaming the system if it's legal.

Let's take another real world scenario.
Most people in my industry are self employed. They might be on a spouse's insurance plan,  go without insurance, or in many cases have a catastrophic plan with very low premiums. Very few I know of buy full HMO type plans on the open market.

Seems advantageous to carry the catastrophic coverage for the cases of falling tree limbs, then just buy a full coverage plan if some high ticket treatment is needed.  Then go back to the catastrophic coverage after that treatment.

Would you be liable for the tax if you have catastrophic coverage?

pilotzs - 2012-06-29 11:11 AM

And, to expand on the employer providing coverage above, I don't know what % they are paying now, but it's my understanding (in simple form), that employers will be required to cover 60% at a minimum of the total coverage amount.  I don't know how that plays into single vs. family coverage.

scoobysdad - 2012-06-29 11:58 AM We were also told that ObamaCare would not be funded by a tax increase and that if we made under $200K we wouldn't have to pay anything more.

tech_geezer - 2012-06-29 10:35 AM

There are fees and some bizarre stuff I was not aware of yesterday like the tax on tanning booths, but basically it is true that if you make less than $200K you will not incur any direct costs due to the ACA, unless you go to a tanning booth.  High wage earners pay more Social Security tax. Title IX of the bill deals with the revenue for all the costs of the service.  Her

Government administrative costs for administering insurance exchanges are paid for by insurance companies who particiapate in the exchange.   These are called " user fees" not "taxes" but that distinction is ignored by those who want to use more inflammatory language and call them taxes.  Users of regulatory services are frequently charged a fee for accessing the regulatory service, like you pay a fee to go in a national park.  Is that a tax to you? 

Lots of folks are grinding the numbers on revenue and the impact it might have.  What we have in this formum is a lot of people speculating without actually reading the law or doing the numbers.  I will be happy to google if for you if you can't do it yourself. 

tech_geezer - 2012-06-29 11:35 AM

There are fees and some bizarre stuff I was not aware of yesterday like the tax on tanning booths, but basically it is true that if you make less than $200K you will not incur any direct costs due to the ACA, unless you go to a tanning booth.  High wage earners pay more Social Security tax. Title IX of the bill deals with the revenue for all the costs of the service.  Her

Government administrative costs for administering insurance exchanges are paid for by insurance companies who particiapate in the exchange.   These are called " user fees" not "taxes" but that distinction is ignored by those who want to use more inflammatory language and call them taxes.  Users of regulatory services are frequently charged a fee for accessing the regulatory service, like you pay a fee to go in a national park.  Is that a tax to you? 

Lots of folks are grinding the numbers on revenue and the impact it might have.  What we have in this formum is a lot of people speculating without actually reading the law or doing the numbers.  I will be happy to google if for you if you can't do it yourself. 

sbreaux - 2012-06-29 12:38 PM

Thanks, that was my impression too, ie no direct tax implications for those making less than $200K. 

jgaither - 2012-06-29 11:29 AM

I've seen something like this too, but thought it was something to do 60% meant you got a full tax credit whereas 40% meant you got an 80% tax credit etc......  It's been a LONG while since I saw that, so I could be mixing things up.

pilotzs - 2012-06-29 10:50 AM  

My take on your second question, is that many 50+ companies are seriously thinking about dropping coverage all together and sending employees to state exchanges.  There are many reasons for this, but the ones that I've researched are following:

1) It's 1/2 the price to drop the coverage and pay the penalty, than continue to keep the insurance coverage, and the associated increases that will likely come.  MUCH cheaper to just drop insurance all together and send employees to the exchange.

A couple things you're leaving out here are that 1) it currently is more advantageous for a company to not offer heatlhcare.  Why do they not drop it today?  they would save money, would they not? 2) does this not create more competition in the health insurance market?  In order to keep participants, they can not charge too high a price.  the larger their pool of participants the more effective they can be.  I only bring these up as market conditions that effect pricing.

2) Even though you provide coverage, does not guarantee that you will not be penalized and taxed as a company.  Employees will be free to leave your plan, and go to the exchange to purchase insurance.  For many businesses, it will be  more advantageous for the employee to go the exchange and get the subsidy, than to keep the insurance that the employer provides.  If your employee does this, the company has to subsidize the insurance up to what they would have paid anyway, and pay a penalty.  And, it's my understanding, that the employee can take the full or partial (offset by the employer subsidy) benefit of the subsidy offered via the government too (I'm a bit fuzzy about this though).

I agree this part of the law is all kinds of convoluted and whacky.

Either way, it's generally setup, where the incentive is for the employer to drop coverage, and send employees to the exchange.  Hence, the argument, that the ACA was setup as a first step to a one payer system.

Currently employees have the option to leave and get healthcare elsewhere and while it won't cost the company anything, there is a disincentive to offer healthcare as much now as in 5 years.  In fact it seems to me there is a greater incentive to offer a more affordable option so that employees DON'T go to the exchange.

Now, the big unknown, just as it was when employers started offering health insurance as a benefit, is how competitive companies will get to attract employees with insurance coverage.  But, that is only sustainable up to the point where the business can afford to pay for the insurance and the increases of premiums.

I agree it will be interesting to see how this one plays out.

I could be wrong on some of the above, but that is what I've gathered from the times I've looked through the information of the ACA and a couple of classes I've taken that have discussed it.    I might have misinterpreted something or multiple items.

Left Brain - 2012-06-29 12:49 PM This thread is like a soup sandwich.