The Affordable Care Act (Obamacare) is a potentially great way to help lower income individuals afford health care. I’m a supporter of ACA despite the trappings of ever bigger government running our lives because disease and accidents do not discriminate between rich or poor. In a nation as rich as ours, nobody should die or get stuck in a permanent loop of poverty just because they can’t afford medical treatment.
The two most common reasons why people don’t retire earlier are: 1) Lack of money and 2) Uncertainty regarding health care access and costs. As an early retiree in 2012 with a full 30 years to go before being eligible for Medicare benefits, I was worried about health care until I did some research on cheap health care alternatives. Now that I’ve spent a good amount of time studying what healthcare.gov has to offer, I’m not worried but thrilled for the potentially millions of other people who don’t have health care or who have no desire to work into their 60s.
I’ve also discovered that even millionaires will be eligible for health care subsidies. More equality is a welcome relief from the constant class warfare rhetoric and discriminatory policies we hear from Capital Hill.
OBAMACARE SUBSIDY AMOUNTS BY INCOME
When it comes to paying income taxes and receiving health care subsidies, it’s generally better to be middle to lower middle class. The philosophy on Financial Samurai is to be wealthy but blend in with the crowd. Staying in the shadows is even more important as an early retiree because we are no longer contributing as much to society, yet we don’t look as old as we should which may anger some people. We already paid our dues in the form of taxes, hence why we retired. One tip for early retirees is to never tell anybody you’ve retired. Instead, tell them you are unemployed, a consultant, or an entrepreneur to deflect envy and potentially garner sympathy.
The below are four charts I painstakingly put together by inputting income levels in the Kaiser Family Foundation Subsidy Calculator. A Silver Plan is used in the example where the insurer will pay for 70% of the medical expense. Premium expense is capped at 9.5% of income, and out of pocket expense excluding premium expense ranges from $6,350 for a single individual up to $12,700 for a family of four. You are welcome to play around with the calculator to fit your situation.
SUBSIDY BY INCOME FOR FAMILY OF FOUR
SUBSIDY BY INCOME FOR FAMILY OF THREE
SUBSIDY BY INCOME FOR MARRIED COUPLE NO CHILDREN
SUBSIDY BY INCOME FOR SINGLE INDIVIDUAL
ANALYSIS OF INCOME LIMITS FOR SUBSIDIES
* Poverty levels: Income under $23,550 to be exact for a family of four (two adults, two children), $20,000 for a family of three, and $11,490 for an individual are considered poverty levels in the United States. The calculator spits out $0 subsidies, which is a glitch, implying such applicants pay $0 to next to nothing for annual health care premiums.
* Phaseout levels: Income of $94,200 or higher for a family of four, $78,000 for a family of three, $62,000 for a married couple with no kids, and $45,960 for single individuals will no longer receive government health care subsidies. The basic math is 4X the poverty level as determined by the government. Despite the phaseout, the good thing is that it looks like the max % of income one has to pay annually in premiums gets fixed at 9.5% of gross salary no matter what you make.
* Other levels of coverage: The premium and subsidy amounts above are based on a Silver plan. You have the option to apply the subsidy toward the purchase of other levels of coverage, such as a Gold plan (which would be more comprehensive) or a Bronze plan (which would be less comprehensive).
* Out of pocket costs: The out of pocket costs excluding premium costs are capped, depending on your situation. For example, a family of four making $50,000 cannot exceed $10,400 for the silver plan for example. The out of pocket increases to a maximum of $12,700 for a family of four making $94,000. The out of pocket costs for an individual making $30,000 cannot exceed $6,350. It’s good to see these out of pocket costs limited, however, they still seem quite high. A family making $50,000 a year should bring home roughly $35,000-$40,000 after taxes. To spend 30% of their after tax income on health care is a large percentage. Hence it is always important for people to continue saving no mater what their income level. The point is at least we know our backstop cost and can plan accordingly.
Related: The Health Affordability Ratio
ACTION PLAN TO TAKE ADVANTAGE OF HEALTH CARE SUBSIDIES
It’s obviously better to make so much money where you have no problem affording unsubsidized health care. However, let me share some ways in which everybody can better benefit from government subsidies and not just the middle income to lower income population.
*Maximize contribution to pre-tax retirement accounts. Contribute the maximum $18,000 to your 401k to reduce your taxable income by $18,000. If you have a working spouse, do the same thing to get a combined $36,000 reduction to your MAGI. You can contribute $5,500 each to your IRA as well pre-tax if you make under $116,000 as a single and under $183,000 as a married couple. But your goal is to get way down the charts so you start receiving subsidies. Related: How Much Should You Have Saved In Your 401k By Age
* Start an S-Corp or LLC. Starting a business is a way to reduce your taxable income by deducting all business related expenses. Everyone should check with an accountant first about deductions before going ahead because each business is different. There is a lot of overlap in terms of business expenses and general lifestyle expenses. For example, if you are a Scuba Diving Instructor, how are you going to put together your course and write about your experiences online about scuba diving in the Maldives without going to the Maldives? There’s no law saying you can’t enjoy yourself on business. You can start your own website to legitimize your business with Bluehost. You get a free domain name for a year. There’s not a day that goes by where I’m not thankful for starting FinancialSamurai.com in 2009. I no longer ever have to work for someone else. I pay ~$750 a month for excellent healthcare, and it’s tax deductible.
* Become a rental property owner. All expenses related to operating your rental property are tax deductible. Add on the non cash expense of depreciation and you’ll easily be able to reduce your rental income and pay less taxes. If you have a rental property in Bora Bora, you can deduct your transportation costs to get there. Not bad at all. (Read How To Pay Little To No Taxes For The Rest Of Your Life)
* Own income producing assets and be debt free. Let’s say you own $1 million dollars worth of property outright that generates operating income of $45,000 a year (4.5% net rental yield). You have no other income, but you have no debt so life isn’t too hard supporting your family of four. Your family qualifies for $5,640 a year in health care subsidies and you only have to pay $2,650 a year. Another example is amassing a $3 million dollar stock portfolio yielding $90,000 a year in dividends with a $25,000 a year deduction in primary mortgage interest. Your MAGI is $65,000 meaning that you and your family of four still qualify for $2,600 a year in health care subsidy as multi-millionaires.
* Check with private exchanges online. Like every good deal shopper, you shouldn’t just rely on one source. I checked online for very similar plans for a family of four and for an individual and here’s what I came up with: $950 a month for a family of four with a $5,000 max deductible and $210 a month for a 35 year old individual in good health with a max deductible of $2,000. There are many options tailored to each individual case. For those of you who have much higher incomes than $94,000 for a family of four and more than $30,000 per individual and can’t adjust your MAGI down any further, going the private exchange looks like the better option.
Bottom line: It is much better to have a high net worth and low adjusted gross income instead of a high adjusted gross income and low net worth to take advantage of government subsidies. I’m sure the government realizes this as well, which is their way of encouraging individuals to save and invest for their future. By accumulating a healthy amount of assets, the government will also reward you with subsidies. (Read The Average Net Worth For The Above Average Person and What Should My Net Worth Be By Income?)
HELPING EACH OTHER LIVE
As you can see from the charts above, income plays the key role in how much subsidy an individual or a family gets. Together, we are helping subsidize lower income groups to gain health care access that they deserve. Helping others is what being a good citizen is all about.
Those with pre-existing conditions and who are considered of lower health can no longer be denied health care or discriminated against. Yes, Obamacare creates somewhat of a moral hazard when it comes to exercising and eating healthy. However, just as the rich help subsidize the poor through a progressive tax system, the healthy will subsidize the less healthy through the Affordable Care Act. In order to prevent Americans from forsaking their health too much it’s likely that large preventative health care campaigns will be launched to teach Americans about healthier living.
The largest point of contention will likely be how the government determines what income levels are poverty levels and what income levels are considered too much to receive subsidies. It’s difficult to live on less than $20,000 a year as an individual in San Francisco for example, yet the poverty level is $12,000 and below. Healthcare.gov does address cost differentials to some extend by state. It’s too bad a family of four can no longer receive subsidies if they make $94,000 while living in expensive Manhattan where a three bedroom apartment can easily cost over $5,000 a month in rent.
I don’t think there will be push back if large asset owners with low incomes can also receive subsidies. We aren’t going to punish a 55 year old widow who can’t find a job that pays more than $35,000 a year but who owns a nice house that was purchased 30 years ago worth $2 million are we? Of course not.
The greatest benefit from the Affordable Care Act is that if you or your family are experiencing hard times, you will be highly subsidized until income improves. Having at least disaster insurances is tantamount. For those who are considering quitting their jobs to do something new, or others who’ve decided to get out of the rate race early, you’ve now got one less thing to worry about.
Recommendations
Looking for affordable term life insurance? Check out PolicyGenius, an independent insurance broker that is revolutionizing the way we shop for life insurance – for free! Answer a few simple questions on PolicyGenius’s website and instantly receive free, personalized and comprehensive life insurance quotes. PolicyGenius provides free, unbiased advice on more than 25 A-rated top life insurance companies they have thoroughly researched and vetted. Because life insurance prices are regulated, you don’t have to worry about not getting the best deals. PolicyGenius helps you compare the best quotes all in one place. When insurance companies compete, you win.
Manage Your Finances In One Place: The best way to become financially independent and protect yourself is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize. Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing and how my net worth is progressing. I can also see how much I’m spending every month.
Their most important tool is their Retirement Planner. The tool uses your real linked data to run a Monte Carlo simulation to see whether your future financial situation is on track. There is NO REWIND BUTTON when it comes to your finances. Therefore, I highly recommend you take full advantage of the best free financial management tool on the web today.
Is your retirement on track? Sign up to find out!
Updated for 2017 and beyond.
Great article, Sam! I’m glad you took the time to look into it and break down the numbers for all of us. Unfortunately, I think that most of the people that are against the ACA/Obamacare have reached that stance on principal instead of by examination.
I am opposed to the ACA because the economics don’t make sense. Subsidizing more people into an insurance market, while at the same time limiting or reducing compensation for such services (Medicare) will only result in shortages of Doctors taking new patients and increasing wait times to see specialists. If you subsidize you get more of it (demand curve shifts right, P increases, Quantity increases), limiting compensation reduces the supply of such services (supply shifts left, Price increase, quantity decreases) result: Ambiguous shift in quantity of care, and price definitely increases.
Nathan, that’s what private health networks are for. People who have financial means can simply opt to pay more for better service. My doctor has a $1,500/year concierge plan that provides weekend access, an even more comprehensive physical, and his private mobile for questions.
I’ll sign up if my health begins to deteriorate. The ACA doesn’t restrict people from paying more and getting better service if they want to pay more. We’re talking about helping the uninsured and those who can’t comfortably afford health care.
Private exchange insurance plans are still subject to affordability targets set forth in the ACA and the cadillac tax for rich benefits. For companies that are in both public and private exchanges the risk pool to the company is the same so premiums will rise on the private exchanges when the reimbursement rates are capped in the public option. You are not insulated.
We are retired couple, 63 & 61. Working class people that lost both our union contracted post retiree healthcare benefits when both our employers were able to shed responsibility in bankruptcy. Our combined fixed income is slightly over 400% poverty and we get no subsidies at ACA. (Kaiser and HHS reply, tough luck). How can we legally lower our fixed income That is from combined ( PBGC, SS, and Monthly employer sponsored annuity payments)?
It is frustrating that income of 1K over 400% poverty costs us over 9K in ACA subsidy. Have looked all over web and this article was the closest we found that may offer some good advice. Help!
Hi John,
Do you still have your pension, and savings? If so, unfortunately it seems like the government will ask you to help subsidize others. Their rationale is that you’ve had a lifetime to save and invest, and if you have a pension + social security, then you should be able to pay under the guidelines.
A lot of younger people will never have a pension. What is your actual income and costs?
Sam
Hello. I’m in a similiar situation. I was told for every dollar you contribute to a traditional IRA, note, traditional, not Roth, will lower your your adjusted gross income by a dollar.
So, if your gross income is say, 65,000, if you simply contribute 5,000 dollars to a traditional IRA, this will bring your income down to 60,000 as far as ACA is concerned. (Note the subsidy cut-off for married couple of two is 62,040).
True, however, one needs earned income to contribute to an IRA. The gentleman to whom you responded has no earned income.
During this open enrollment you can find a plan that is HSA Qualified and then put any amount up to $7,000 plus in to a Health Savings Account which is a deduction for MAGI. This would legally lower your income by what ever you put into your account and you can qualify for a credit. There are rules that you need to follow but it is very do-able.
Hi John,
So, in your case, if you have a health insurance plan that is HSA qualified all you have to contribute to the Health Savings Account is a little over $1,000 or just enough to bring your income down to qualify for the credit. Remember the Health Savings Account that you establish is your savings account. It can be used tax free on your behalf to pay for out of pocket qualified expenses like Co-Pays, prescription drugs and many other medical expenses. The amount that is not used up can be rolled over for use in future years.
I am in the same predicament. My daughter (26) has permanent employment now and insurance through her employer. I called Obamacare and informed them that I needed to take her off of my insurance and it constituted a “Life Change”. In so doing, it reduced us to a “Family of (2) instead of (3) as we were. My income from retirement + MRD from inherited IRA was okay for the 3 of us and kept us within the 400% poverty threshold. When we became just the two of us, now the threshold was lower and I lost all the subsidy for these last two months. Invest $4K in IRA to reduce AGI to within the 400% range again?
Please, the only docs quitting are the ones close to retirement . Docs love medicare because they must be paid in 14 days. My friend wrote the software. I believe the oath they took doesn’t mention money.
Can you source this?
I have a friend that runs a physical therapy practice and she is always complaining about how inconsistent the government payments are.
ARNP here. Medicare is our most consistent payer as long as we have our ducks in a row. Every quarter my clinic meets to discuss the financial aspects of the clinic and every quarter the payers we have the biggest problem with are the privates who change the rules mid stream. Medicare and MedicAid push hard to lower costs. The privates have a price in mind based on how much they think the patient will tolerate.
WHen price changes, demand nor supply curves shift. When it is price that changes, there is movement along the curves. That’s called a change in quantity demanded. That’s econ 101 and that’s exactly what’s happening now with the ACA: lower prices have resulted in increase in quantity demanded. That doesn’t necessarily predict anything about supply.
Nonsense and Liberal garbage!
Be a physician and learn that the government now wants to tell you how to practice your patients health care needs.
The rates are going uo dramatically for the paying public. The deadbeats get care on the backs of the working!
Hold on!!!
The numbers and graphs are BS!
Drs. don’t get paid for months and this causes increased costs. When they do get paid, the amounts are arguably reduced! Foulplay on this propaganda article!
What about the working whose employers don’t offer coverage. 12 years with the same job and still no coverage.
I hadn’t looked at the charts too closely until this point because I have employer sponsored health insurance, but you make a really strong point. If you can bring your taxable income down to a reasonable level, you can get great subsidies even though you’re a millionaire. Now I need to sort out whether I’d have a moral dilemma with doing that. Probably not, it’s just playing by the rules…
Being asset heavy and income light is the name of the game. The government is fully aware of this and by giving subsidies to lower income folks, they are indirectly ENCOURAGING people to save and invest their money over their lifetimes. This is great for personal finances long term. Not sure where the moral dilemma is coming from to build assets unless you think the government is unaware of their policies.
Indeed, one of the key positives of ACA, subsidies for millionaires!
Have a $2 mil portfolio yielding 3% for $60,000 and no debt and get a $3,700 a year subsidy according to my chart above!
The government is encouraging us to save aggressively, invest and build assets! A win for the nation.
I feel the intent of the ACA was to help those who couldn’t afford it buy insurance, not subsidize savvier rich people who might be living off trust income, gifts etc. in addition to an officially lower income. Taking legal advantage of this is not morally wrong but a defect in the law which should be fixed…
I think that the subsidy levels are ridiculous for a lot of reasons. $94,000 is not that much money and I’m offended that that’s considered the cut-off for the “rich.” My personal premiums will double under the ACA from $377 per month to $738 per month and we’ll still have a 10K deductible with a maximum out of pocket of $12,700. If we pay our premiums and hit our out-of-pocket max, we will spend over $21,000 on healthcare in a year. That, to me, is completely absurd. Of course, we could get a plan with a lower deductible but that would just cost more per month and wouldn’t be a good value unless one of us got extremely sick.
The ACA is not affordable except to those on the very bottom who are getting highly subsidized premiums.
I don’t think President Obama is saying $94,000 for a family of 4 is “rich.” I think he’s saying that if you make $94,000 or more, you no longer need subsidy. He told us during his re-election campaign that $200,000 or more in income is considered rich, and the level where he wants to raise taxes.
I think making $94,000 in Indiana is not bad no? And you mentioned in your excellent post (https://clubthrifty.com/affordable-care-act-cruel-joke-middle-class/) that you guys make “much more than $94,000,” so is it really that bad? This is how those who are making over $380,000 a year for the longest time were feeling, paying 36% Federal and now 39.6% Federal taxes and being demonized despite paying the most taxes.
What health care plan/network were you using first? Have you checked out a place like eHealthInsurance.com to get a free private exchange quote to see how it compares yet? That’s what I recommend for folks making much more than the subsidized amounts as determined by ACA.
At the end of the day, it’s about helping the poor and those struggling to get by.
We have Anthem now for $377 per month but our plan expires next year. I checked the exchange and the cheapest plan was $738 per month with a 10K deductible. I also checked eHealthInsurance.com and found that the cheapest plan was over $800 per month.
I’m sorry, but cutting off subsidies at 94K is pretty much the same thing as a tax. If, at the end of the day I’m paying significantly more than other people, what difference does it make? I also remember distinctly when President Obama said that the ACA would lower premiums “by up to $2,500 for a typical family per year.”
Are we not a typical family? Two 34-year-old adults with two small children? And yes, $94,000 is plenty of money in Indiana but it isn’t enough to justify such absurd premiums with a high deductible to boot.
I don’t have a problem “helping the poor and those who are struggling to get by.” However, I do have a problem with people making 94K possibly having to pay 20% or more of their income for healthcare. I also have a problem with my family’s premiums doubling just to subsidize all of that. I don’t think there’s a certain income level where you aren’t allowed to complain about your premiums doubling. And if there were, it definitely shouldn’t be 94K.
And, for the record, I’ve always been for single payer WITHOUT the health insurance compaies involved, WITHOUT the ridiculous income penalty cut-offs, and WITHOUT policies that encourage individuals to earn less.
The ACA was sold as the “next best thing” to single payer. It isn’t. The ACA is going to be awful for the economy when millions of people have thousands of dollars less per year to spend and invest. It doesn’t take an economist to figure that out.
I agree it does suck that your premiums are doubling. One thing to consider is that your premiums would have gone up next year with Anthem, regardless. So the question is, by how much incrementally due to ACA?
Do you think the ACA will help create sympathy for the highest income earners who pay the highest marginal tax rates and highest absolute tax dollars and still are asked to pay more? Perhaps the ACA will inadvertently reduce class warfare as more middle class entrepreneurs who voted for higher taxes without having to pay more themselves start feeling the pain of the wallet.
I’ve always believed that first the government will come for the rich, and then they will come for everyone else. Perhaps this is happening now as health is unavoidable. But at least folks who need health care most will gain access.
You mentioned you guys make much more than $94,000 a year. $94,000 a year is like making $200,000 in San Francisco given our $840,000 median home price which buys something not so desirable. Let’s say your much more figure is $125,000 a year in Indiana. At $300,000 equivalent a year in SF, I’d be annoyed with the increase, but I would just chalk it up to the way things will be.
I’ve seen America’s future, and I’ve embraced it. There’s no point fighting the Government as they will run you over. Instead, we must think smarter and shelter our income or at least downplay what we make. Big brother is watching. Always.
“Do you think the ACA will help create sympathy for the highest income earners who pay the highest marginal tax rates and highest absolute tax dollars and still are asked to pay more? Perhaps the ACA will inadvertently reduce class warfare as more middle class entrepreneurs who voted for higher taxes without having to pay more themselves start feeling the pain of the wallet.”
I think that could be accurate. I personally think that 200K is a low bar to set for higher tax rates anyways since so much of the wealth in this country is accumulated at the very top. I think I’m slightly biased because of the people I’m surrounded with, but I still feel like 200K is middle class. My brother and SIL in law make 200K and live nearly month to month because they have six kids and live in the most expensive town in the state.
People have not read the bill, there is no mandate. If you don,t pay the fine the law states the gov. won’t come after you. and prevents liens to collect . Page 139
200k middle income? Not in most people lives. I would be more than happy with 100k. Beware of talking about the poor because to get it free you have to make no more than about 900.00. God I make 300.00 to much.
Fellow Hoosier here. $94k in Indiana is a lot — easily $200k in SF since there are plenty of high-quality homes that are in the $100k range, and our state income tax is flat at ~3%. A family of four could max retirement accounts, own a home, and potentially pay for private schooling for their kids on roughly that income.
It’s worth noting that Indiana will have some of the highest Obamacare premiums in the country. Why? I’ll admit my own ignorance here and say I have no idea whatsoever, but would welcome any explanation.
I partially agree with Holly. I think her primary concern is how the subsidies phase out. Up to $94k you can only pay up to 9.5% for health care. One dollar past that and, in Holly’s example, your max could be 20%+. It’s kind of like how earning $113k sucks because payroll taxes hit 100% of your income.
I’m not too keen on Obamacare, but I do like the fact that I know I can get health insurance no matter my employment situation or my health. For single people who can’t rely on a spouse’s health care, the freedom to choose a career without consideration for coverage is an intangible that has monetary value. As a single dude, I dig it. Without it I would be forced to make suboptimal decisions just for insurance coverage starting at age 26.
tl;dr We’re all biased by our own position.
Hey fellow Hoosier! =)
Also keep in mind that we just sold our house in Hancock County and are moving to Hamilton County where housing is significantly higher. So, $94,000 doesn’t go as far as it would in Hancock County or nearly any other county in the state.
Our higher income this year is mainly due to the fact that I basically worked two-full time jobs from January through April. Next year, it might be less and we could be nearly subsidy levels after contributing to SEP IRA, health savings account, etc. So, we may actually fare better next year than we would this year.
Honestly, I never think it’s a bright idea to “chalk things up to how they’re going to be and live with it.” Sure, complaining won’t change anything but quietly accepting it isn’t an option either. I think we should all complain about things we’re unhappy about, loudly if needed. Otherwise we all might as well bend over, grab our ankles, and quit watching the news or caring about anything altogether.
As far as I can tell, the ACA uses MAGI to determine your subsidy. This means that you will NOT be able to use your SEP or IRA’s, 401 k’s or Health Savings accounts to lowere your inceome for subsidey purposes.
If you can buy a high quality home for $100,000-$150,000 in Indiana and earn the same, then that’s like Holly making $1-$1.5 million a year in SF since that’s what a good quality home in a safer location costs!
I would not bother protesting a $800/month premium if I was making $1-$1.5 Mil. I’d count my lucky stars! :)
Agree! We make together 25,000.00,own our older home, and support our dogs. We have everything we need and want except marriage. For some reason instead of doubling the long income chart as they should for two, if you marry they half it. Yep want people single and poor and that is one reason people can’t get married. We would love to marry but the cut in income for the subsidy would make it to hard for us. At 62 you have to think of those things.
JT, I think we know why Indiana may have some of the highest premiums. It’s based on the health levels of the Indiana population.
But then again, $1,000/month for a family of 4 would be good value for folks living in NYC, California, Jersey etc, so maybe Indiana isn’t so expensive at all.
Good point about income and median house price. If you’re making much more than $94,000 a year in Indiana, that sounds like a great income!!!
This is an old post but I have to respond. You said, “Up to $94k you can only pay up to 9.5% for health care. One dollar past that and, in Holly’s example, your max could be 20%+. – See more at: https://www.financialsamurai.com/subsidy-amounts-by-income-limits-for-the-affordable-care-act-obamacare/#sthash.IWDnxDKl.dpuf” and just wanted to clarify, this is NOT accurate.
The 9.5% is not for HeathCARE, it’s for premiums. We get a small subsidy ($200/mo) and we are at $93K for family of 4, so just under the cutoff (thanks to HSA or we’d be over). That’s for the premiums only. This year, even though we’re healthy, we had a few minor things checked out and we hit our deductible, thanks to the insane cost of something like a simple endoscopy ($6K+). So that $12,700 max out of pocket we still had to pay on top of our 9.5%, so we’re at 21.5% of our income going toward heath CARE, and that’s WITH the subsidy.
I work for the WIC program. Everyday we see people who are on government programs who come in with Coach purses, nice phones and are going out of town on trips. So many of the women on WIC are not married and are having children left and right. After working there for 24 years I do not feel the way I used to about helping the “poor” Now I feel we are giving the store away and those who come after us and work and make any kind of money are going to be paying for those who don’t for many years to come. Pam
On the question of children, why do you think they have a lot of children even though they might not be able to comfortable afford?
Lack of education, and no cultural stigma attached to single motherhood.
I agree I worked in a supermarket going on 30 years and many times WIC customers would leave the store and hop into the Cadillac Escalade. I went part time and now in 2015 lost employer based health care and I am thinking that when you add my earning to my investment income I wouldn’t get any subsidy. So i’m paying $360 /mo in premiums and facing much higher out of pocket costs. So ACA is really telling me to quit and reduce income because maintaining a little part time job to keep active is just going to hurt me financially. Also it could push my long term cap gains and dividends into the taxable range. So it would be a double hit. Obama care hurts the responsible saver and worker. But I starting to think if you can’t beat them join them. That isn’t my belief but one does get tired of those who abuse the system.
Making 100K in Indiana is not the same as making 1.5 million in SF. That’s absurd. You choose to live there despite the fact that real estate prices are ridiculous.
Just using JT’s income to housing example.
Same thing with you choosing to move to Hamilton county. In other words, life is all about choices. All good!
Yeah, but my 160K house in Hancock County would sell for about 175K in Hamilton County, not 1.5 million!!!!! =)
Plus, living in Hamilton county will allow me to send me kids to the top-rated schools in the state…for free.
The point is if you are earning $125,000 and can buy an awesome house for $175,000, that’s like earning $1,000,000 to buy an awesome house for $1,350,000 based on JT’s example.
Your $175k house might very well sell for $1.5 million in a middle of the road SF neighborhood.
Just think paying more for ACA as your patriotic duty and all is good! If it makes you feel better, I’ve paid more than $1 million in federal taxes alone over 13 years since college. I doubt I’m getting that much more in benefits than the median income earner.
I am not a supporter of the ACA! I completely agree with this being NON-AFFORDABLE CARE!
We are a family of 5 3 kids 2 adults both who work regular jobs, total income equaling only 86,000.00 Per yr. Anyone who has children knows this is not “RICH” ! We would receive some ridiculous plan with high deductibles and still high monthly premiums. I want to quit my job and live on welfare, strip myself of citizenship, and get the silver platter handed to me! Obama blew this big time!
First of all, this is a great article.
The ACA is anything but affordable. Fascism.
Sure, we can game our taxable income down to play the system. But, only like 3% of population has the both the intelligence and drive to do that.
Austin, how is the ACA unaffordable when before the ACA there were no subsidies? There’s no gaming the system. Our government is encouraging us to invest in assets and businesses to build wealth. They know if we become financially fit, the government won’t have to take care of us as much. So as a reward for building a lot of assets, we can retire earlier and potentially gain subsidies as well.
Please elaborate on your position as to why you think ACA is unaffordable and fascist. The median household income is ~$52,000 a year. There are subsidies up to $94,000 for a family of four, which means the large majority of the population can receive subsidies if they want to retire early, work a part-time job, travel, be an entrepreneur, etc.
Sam,
You clearly take offense to my concerns with the ACA.
First of all, I respect you and your intelligence. I am quite sure that you have interesting insights into this matter. I don’t care to enter into an argument and am more than willing to consider alternative viewpoints.
My concerns with the ACA stem from the fact the populace will naturally need to subsidize those subsidies which were not a concern before the ACA. The subsidies you speak of must be paid for by someone. You say, “the median household income is ~52,000 a year” and that there are subsidies up to $94k for a family of four. Surely I don’t have to remind you that that makes up roughly 90% of the population. In effect, 10% of the population will be subsidizing 90% of the population. This, certainly, is not capitalism. At best this is socialism. I would be tempted to say that this is at worst corporatism but it is not.
And, here is why it is not corporatism. Within the insurance field there is a concept known as the “death spiral”. A recent NPR broadcast discusses death spiral in depth. In short, the idea is that if a particular health care provider takes on too high of an at risk profile they will naturally have to raise rates across the board to compensate for those who burden the actuarial tables. The following year, when the price rises take effect, they will naturally face attrition from those healthy customers who can no longer afford the increased premiums. This phenomena compounds to lead the corporation into a “death spiral”. It’s a legitimate concern that the health care system, forced by the government, could face the same set of events in aggregate. Already we are seeing providers revoke policies literally by the hundreds of thousands.
But, from a short sighted sense. I suggest running your own circumstance through an exchange and see what kind of premiums and deductibles you receive. I have done so. I found that the premiums were roughly what I would expect while the deductibles for the “silver” plan were in the 6k-10k world. Way way way above what I would find acceptable. Thus, unaffordable as a practical matter.
Austin, I’m not offended at all about your concerns for ACA. I have similar funding concerns, but the American way is to pass the costs off to our children and to let rich people pay for it. Who am I to go against the American way?
Just like how a progressive tax gets the rich to subsidize the poor, the ACA is no different to help the poor and the unhealthy.
$6-10K out of pocket is a lot for the Silver plan, however, how many of us actually get into accidents or medical situations that requires us to spend $6-10K? It’s not every year. And during those none years, everyone is hopefully saving.
There’s no point fighting ACA b/c it’s here to stay.
I realize this is an old post, but I thought I would comment still.
Some of us do have chronic conditions, and they are expensive.
HIV medications for example must be taken for a lifetime and cost $30k per year per person of average. A married couple where both are HIV+ will have $60k of medical expenses each and every year, at least. This is our situation. I’m currently working, in my late 30s and covering my husband through work.
I have calculated OOP costs with an ACA silver plan in California would be about $6,000 every year, in addition to the premium. The premium at age 64 for two will be about $20,600 a year. That’s $26,500 of medical expenses when you add the out of pocket costs. If we end up having an AGI of $63,000 a year, and be just over the threshold for subsidies, that means we will be paying 42% of our gross income for healthcare. That doesn’t meet the definition of affordable, in my book.
Of course, it’s still much less than paying for the $60k of medication out of pocket each and every year. And before the ACA we couldn’t even hope to have any insurance at all outside of work after COBRA before age 65.
I’m glad the ACA happened. But it’s still looking like we may have to relocate abroad if retiring before age 65, due to the healthcare costs.
I have been working since age 19 and I don’t plan to work 46 years.
Austin, you say that only 3% of the population has the intelligence and the drive to play the system, but whose fault is that? The opportunity for a free education is there, so almost all should be able to play the system. We are talking about 94K in income and an education. Just what is beyond the reach of that much in assets?
ACA is a compromise that we have because Ted Kennedy turned down an offer by Nixon for single payer health care. That was 45 years ago, in the late 60’s. Kennedy said, before his death, that it was the biggest mistake of his career.
Also, it is not possible that 90% of the population is contained in families of 4. Many are single, many have children above age of inclusion, many have fewer or no children, and lastly, there are still many who have no coverage. In the end, much fewer than 90% percent of the population have health care supported by much more than 10%. The biggest support of universal coverage is the by the healthy for the sick.
Thanks for making this so easy to understand! I’ve been a bit confused on how the ACA works but now it all makes sense. The tables you made are really helpful to grasp what’s being offered too. I certainly hope there will be more corresponding education and outreach for people to better learn how to stay healthy, exercise, and eat right. We need to get more preventative conditions like type 2 diabetes, obesity, heart attacks, and strokes in better control.
Hi Sam, thought-provoking post as always. I wonder how you came up with your figures for subsidy amounts? I used the Kaiser calculator to which you linked and it confirmed that the income cutoff for premium subsidy for a single person was 400% of federal poverty level or $45,960 in 2014. This is quite a bit higher than the $30,000 you cite in your table. Thanks!
Konrad, I was wondering the same thing, but when I plug in any number above $30,000 per individual (1 person in family, 1 adult over 21, no kids) out comes the $0 subsidy error. I went back again and plugged in $35,000, $40,000, $45,000 and it still comes out as zero. Being consistent and going up to 400% of federal poverty level would seemingly make sense, but I don’t see it.
What is the subsidy amount for $35,000, and $40,000 you see?
Subsidy @ $35,000 income is $1,062/yr.
Subsidy @ $40,000 income is $587/yr.
Which makes sense since it ties to the 9.5% cost of premium % to income calculation.
But do a Google search and you’ll the $45,960 maximum income for subsidy cutoff is well documented. Weird.
Doesn’t add up given the calculator spits out a $181 subsidy for an individual making $29,000 a year. A $1,062/year subsidy on $35,000 a year when the plan only costs $2,535 a year in this example sounds like a lot. Must be different plans as the explanation for why the subsidy stops at $30,000.
But I hear you on the $45,960 maximum income for an individual = 400% of poverty level.
Did you get the numbers from the calculator linked in the post?
This is one of the more thoughtful pieces I’ve seen written on the ACA by personal finance bloggers. As you noted, the key for early retirees is acquiring assets and minimizing taxable income. And I love the notion of the healthy subsidizing the cost of healthcare in the same way that high earners subsidize via taxation – great comparison.
Not minimizing taxable income..that would be much more fair..you have to minimize you MAGI. That is your AGI after you add back in your IRA and/or 401K deductions and other deductions…
I think people are complaining because even if you have private insurance currently your rates are going to almost double. I do not have evidence of this myself (yet), but have heard from others whose insurance premiums are skyrocketing. As Holly said, even if you make $94,000 a year, if your premiums are $800 a month that is still a lot of money to be spent on healthcare.
Before having children, my premiums at the office were $1,600 a month, which included maternity coverage. I still had copays of $20 a visit and a deductible (though I can not remember it was at the time). I work for a small company and they can not (or will not) pay for the coverage for their employees, however, they do offer insurance. After having children, our family switched to a private insurer where we pay $518 a month. That is a huge savings. Even though it did not cover my sons tube surgery when he was 1 to the tune of $3,000…..we still saved on premiums.
I don’t mind helping other people who are struggling, but my guess is that the people who really need the insurance are not going to sign up, even with the subsidies. Thus, the premiums are still going increase for everyone that does use it. I could be wrong, but from what I have seen and heard from my husband’s employees, they are not planning on signing up for the health insurance. They are going to pay the fine.
Score one for the private exchanges then to save you 40%? It just seems like ACA simply provides more options for all income types across all work types.
The other question is, if more money is being paid with less service, then who is making all the money? We have to invest in those entities! Unless of course the entity is the bottomless pit government.
I would say the ACA provides options for the lower income levels, however, for the higher earners they are going to pay more regardless (or so it appears based on my limited knowledge and anecdotal evidence). I also agree with Steve below, I just don’t have faith in the government to handle this correctly. We will see what happens I guess.
By the way, I still can’t log into the site to see what my premiums will be. I tried again last night so I could compare what I am currently paying through a private company to what I would have to pay for the ACA.
That is concerning. The good thing is that President Obama is trying to extend the mandatory sign up by another 6 weeks before he sends out the Sentinels. So keep the faith!
I mentioned in my last post that due to the ACA my current premiums went up 50% and my deductibles more than doubled. My insurer stated in the letter this was directly related to the ACA. The latest correspondence this past week was to inform us retirees that there will be a meeting in January to inform us of the likelihood that our group will get another rate hike and be kicked off the dental and Vision portions of our plan come April. Less insurance, increased costs, increased out of pocket. I expect the next correspondence to be even more dismal.
Now that I’ve come across as a selfish sob, let me say I’m for insurance for everyone. Utopia has arrived! I just don’t have faith in our government to do it right. 300,000 people received notice in Florida that they will be kicked off their plans. It looks like this is where we’re headed for me and my retired friends in Vegas too.
Sam, if the government were a private business would you invest in the ACA over Humana, USPS over FedEx. So far for me none of the promises were kept. There have been nothing but surprises. Bad ones.
Utopia for all Steve! Love it!
Don’t look beyond insurance companies to blame ACA in order for them to jack up their premiums so they can simply make more profits. Everyone MUST fight and do their due diligence on insurance of all types since there are so many options.
I would invest in anything that had a monopoly and the world’s mightiest arsenal of weapons to get people to do what I want. Give me all your money or die is a good business model!
With regard to your last statement, I do wonder if there was collaboration between insurance and government on the ACA. The monstrosity wasn’t written overnight. Insurance lobbyists wrote it long before the 08 election and have found a way to use the government to bend the people to its will. They got 16% of the economy in the process. I think I would invest in the key players in the private sector who put the plan forward, they will profit handsomely. How do I find that out? Prob too late.
Steve
Las Vegas
I think you’re confusing the ACA with the insurance company, it’s merely the law. Humana, Kaiser, BCBS, etc. are still providing the insurance (whether you buy through an exchange or through an HMO or some other avenue.) Your analogy is a kin to saying would you invest in the right to receive mail on weekdays over the USPS…
I’m against the ACA because it’s just another tax. I don’t currently have health insurance, but now the Gov’t is requiring me to get it. Something I don’t want. And if I don’t get it I pay a fine. And every year the fine grows exponentially. They are requiring me to buy something I don’t want so it helps pay for people who cannot afford it. It’s Socialism. My wife and I combined make roughly 55k/year and we’ll have to pay at least $400/month for some crappy plan on the exchanges, a plan we don’t even want. That $400/month would better serve us staying in our pockets to pay for regular bills and expenses of living with the rising costs of inflation. But the Gov’t knows what’s best for us, we’re not allowed to make our own decisions, and we must obey. The fine is roughly $300 for us the first year, then $2,000 the second year we don’t get insurance, and then $12,000 the third year without insurance. Another thing that pisses me off is how everyone’s premiums will go up because they are now subsidizing people who make poor life choices that would normally bear the burden of higher premiums. People who smoke or are grossly overweight will cause everyone’s premiums to rise since they cannot be charged more for their “conditions”. And if they don’t get enough healthy people who don’t need health insurance paying for those that do the entire system will collapse. Who knows, maybe that’s what they want after all.
I hope you’re also for gay marriage, pro-choice, and legalization of marijuana too, because those are issues where the gov’t imposes their will on the people. They’re also freedoms that a specific partisan line typically rejects, alongside the ACA, allowing them to be terribly inconsistent with their logic and reasoning.
This is a program that finally requires all people with means to pay for their own coverage, as a responsible contributor to society. Frankly, I don’t want to pay for you or your wife when you (heaven forbid) get caught in an accident or with an ailment that you can’t afford the cost of healthcare for. And you can rest assured that you won’t have to pay for me!
The mandate to have insurance is as much about self responsibility has taking care of yourself in the first place.
My company is still going to offer us health insurance but they are switching us over to a high deductible plan. Because of this, we now qualify to open up HSA accounts. This will save me a lot of money in taxes and let me build up a nice e-fund for medical expenses when I get older and will likely need it. Even though I have to pay more for my prescription every month, the tax savings actually puts me ahead $700 next year. It might not be perfect (single payer would have been nice or at least a public option) but it at least attempts to address a huge problem we have. There are far too many who do not have access to basic health care. Which given the wealth of our nation, is ridiculous.
Thank you for pointing out the access to care point. With all the rhetoric and buzzwords that get tossed around (fascism, big government, socialism, etc) critics never seem to offer an alternative solution to providing EVERY SINGLE American access to affordable healthcare. We are the United States for crying out loud. If anything the red tape surrounding ACA is simply an example of what too much focus on gaining consensus gets you in passing a bill.
Great post, Sam! I have to laugh at the level of contention among many posters. I mean I get their concerns, but so much outrage over a government program that is along the same vein as what EVERY OTHER INDUSTRIALIZED COUNTRY IN THE WORLD does?
I for one look forward to living in the 21st century. A time when the poor, disadvantaged, and underserved can now get access to health insurance. They have always had healthcare, just the kind found at the emergency room. You know, the very expensive kind. The kind that taxpayers have been paying for already.
The only logical argument for denying lower income citizens access to health insurance and health care is to deny them access to emergency rooms. Have a bouncer at the front door where the ambulances pull up. Proof of insurance or no admittance. They could even have an undertaker right next door to efficiently pick up the bodies left piled outside the emergency room when they can’t get emergency care. Either accept that scenario as optimal, or figure out a way to get care in a cost efficient manner. My 2 cents anyway.
As for how to fare well under obamacare with the subsidies, you have it right. Keep your MAGI low enough to scoop up a decent subsidy. And for states that haven’t extended Medicaid, make sure you have enough MAGI to hit 100% of the federal poverty level or you won’t be able to get any subsidy (and can’t get on medicaid).
One technique I plan on using to keep my income high enough (at 100% or 133% FPL) is the Roth conversion. I can convert enough of my Trad. IRA to Roth to get to a desired MAGI in any given year. This “income too low” problem is something I face as a very frugal financially independent person. Having 3 kids also means our FPL is a lot higher than a childless couple’s or a single persons.
“so much outrage over a government program that is along the same vein as what EVERY OTHER INDUSTRIALIZED COUNTRY IN THE WORLD does?”
This is the problem as I see it. The ACA is not along the same vein as regular single payer that the rest of the industrialized world enjoys. The ACA discourages people from earning more and punishes those who do. It keeps the hugely profitable health insurance companies making billions of dollars per year. It does nothing to control costs or encourage the use of preventative care. And, we’ll still be burdened and hassled by health insurance company bills and red tape, huge premiums, and huge deductibles.
I would be thrilled to have single payer paid for through progressive taxation. I agree that everyone deserves healthcare. This isn’t the way to do it.
Not sure how ACA discourages people from earning more. Instead, the ACA encourages people to:
1) Make so much they don’t need subsidies
2) Save and invest to build assets and live off those assets even if they are in the millions because subsidies are still given to millionaires.
3) Start a business/buy rental properties to take advantage of deductions. Entrepreneurship and homeownership are two parts of the American dream.
In no way am I feeling discouraged to make less money at all. Are you feeling discouraged to make less?
Sam,
Please stop pretending that your financial inclinations are typical. Most middle class people aren’t going to use the ACA as a reason to buy investment property or start building massive assets that they can live off of. Most middle class people are just getting by.
I personally am not feeling encouraged to earn less but I think those who are getting subsidies may. For instance, at certain thresholds you may lose part of your subsidy if you get a part-time job. And those who get Medicaid know that they need to keep their income under a certain level to keep it.
My problem with the ACA isn’t how well it’s going to work out for YOU, or me for that matter. It’s about how it will work for everybody else. As I illustrated in my own post on the topic, a family making 50K with the bronze plan will either have to choose between highly subsidized premiums or a ridiculous deductible. The ACA sucks.
I can only speak for myself about how I feel, and I feel emboldened the ACA helps me get health care if I need to get health care through the government. Although I currently won’t get a subsidy, at least I know what the back stop cost is so I can plan accordingly. When there is a temporary tax cut, people don’t spend more, they SAVE because they feel taxes will simply go up the following year. With the ACA, this is a new permanent health care solution, so now people can mentally feel more comfortable about moving on to do something else, and can also budget accordingly.
And this post is also written for everybody else, not just me. That’s why I’ve included the subsidies for singles, couples, family of three, and family of four, which basically encapsulates 90%+ of the population who could potentially qualify. Nothing is perfect, but I choose to look at the positives since we can’t change the system now.
Here is a recent comment below.
“I for one is excited to enrolled in ACA. I’ve always had insurance through my employer and since I’m self employed now I had no insurance. I’m relatively healthy but do go in for routine check ups. I got turned away for service earlier this year by a doctor’s office who stated I should just go to the emergency room. I argued that the cost of ER for something that wasn’t an emergency would be astronomical. They said at least it would be “free.” Mind you I was ok to pay out of pocket but my money was no good. The doctor wanted insurance.
Anyhow my premium is actually less than what I was paying when I was working as an executive with a comparable plan. I guess I am that target market who is young healthy guy who can help subsidize the others. I’m ok with that knowing I do have coverage in the event of a health emergency.
My friend who is a contractor and using Cobra had been able to slash her cost close to 50% through the exchange.”
I agree im disabled my sons disabled im on disability and must work part time because even though we only make 40,000 a year I don’t qualify for Medicaid of anykind to help pay medical cost.i pay out about 800.00 a month I only earn650.00 the rest comes out of my disability check. I don’t qualify for income restricted housing either an am expected to pay out 900$ or more a month in housing. an a car payment. cant wait till we get a new president. I don’t know why hes still there.
I’m wondering if any parts of obamacare help with any of the points listed in the “bitter pill” time magazine article which points out how hospitals massively overcharge patients/insurance companies for things like bottles of tylenol or basically everything they can. Tough to read that and even come up with words as to how frustratingly broken that system was/is. Hopefully bringing in millions more people isn’t just adding new customers to a broken system and there are actually reforms that make a difference in the law somewhere.
There are a lot of other reasons to reduce your taxable income than just medical insurance. Investing in a business or income property are great ways to increase your income and use the tax code to subsidize your effort.
No complaint here. We are still on my wife’s employer sponsor plan. When she retires, our income will be pretty low so I’m sure pretty sure we’ll get a little subsidy.
My mom should be able to get a lot of subsidy because she doesn’t make much at all. I’ll need to call up and enroll soon.
I’d rather have public healthcare too. Hopefully we’ll get there someday.
I for one is excited to enrolled in ACA. I’ve always had insurance through my employer and since I’m self employed now I had no insurance. I’m relatively healthy but do go in for routine check ups. I got turned away for service earlier this year by a doctor’s office who stated I should just go to the emergency room. I argued that the cost of ER for something that wasn’t an emergency would be astronomical. They said at least it would be “free.” Mind you I was ok to pay out of pocket but my money was no good. The doctor wanted insurance.
Anyhow my premium is actually less than what I was paying when I was working as an executive with a comparable plan. I guess I am that target market who is young healthy guy who can help subsidize the others. I’m ok with that knowing I do have coverage in the event of a health emergency.
My friend who is a contractor and using Cobra had been able to slash her cost close to 50% through the exchange.
So for some of us it’s working.
Wow, I knew this topic would be a lightning rod. I thought I’d share my example. Like Joe/RB40 I’ll remain on my wife’s plan for now. The wife’s plan, like other corporate plans I assume, are being changed to align with the ACA. That means deductibles in the employee plan are going up in 2014. I tried to get on the government website to check out prices in my state…no go, system down or not working fully. I went to ehealthcare and their prices have gone up to match the ACA guidelines of the metallic plans. Bottom line is that healthcare cost for us two adults is ranging from $1,300 – ~1,500 per month in premiums when I compare to my wife’s corporate plan which is ~200 per month as payroll deduction.
Now for my opinion. While I believe it would be nice to have a backstop for medical services, I just don’t trust my government to get this ACA working even close to the promises made…for years, if ever. I worked in the aerospace/defense industry and got to see just how poorly in general our US Government works on RFPs (request for proposals), their SOWs (Statements of Work) and requirements documents. If you want to know why projects usually go over budget and don’t meet expectations, go first to the requirements document. If you get a hold of it and read it, you will likely find it’s weak or bloated. In other words, you get what you ask for. This is why the Presidential helicopter got cancelled…the govt kept on adding technical requirements; more features, electronic hardening, increased protection from radiation, which adds more weight…so now I need more engine power…gee this is going to cost more! This is what’s now going on within the walls of the Canadian software company who wrote the code for the healthcare web site.
Again, in principle I’d like for it to succeed, but I believe Obamacare will be the legacy that will haunt this president and well documented in the history books.
I wonder why we didn’t hire an American company to create healthcare.gov. Kick backs perhaps?
$1,500 for you and your wife doesn’t sound right at all. How do you come to this? Did you use the calculator in the post? My examples above are pretty standard for couples and it’s nowhere near what you say.
It’s probably his age.
I plugged in our info and changed it so that we were 54 instead of 34…plus our two kids. If we were 20 years older, the cheapest premiums available start at $1,241 per month and go up to $1,650 per month. If we were 64, we would be praying for Medicare to kick in because the cheapest premiums available would be $1,646 per month for a plan with a $10,000 deductible. To have a $5,700 deductible, our premiums would be over $2,100 per month. Should this be considered affordable for a family that makes 94K per year?
Yes, I’m (cough, cough) a few yrs older than Holly. :)
I also ran the numbers for a few different scenarios for my state (Indiana):
Two 44-year-olds, no kids: plans start at $628 per month with a $12,000 deductible
Two 54-year-olds, no kids: plans start at $952 per month with a $12,000 deductible
Two 64-year-olds, no kids: plans start at $1,357 per month with a $12,000 deductible
This is not affordable for families making $94,000 per year. A childless 54-year-old couple making slightly over $94,000 per year would have to pay almost $12,000 per year in premiums and still have a $12,000 deductible to hit before any coverage kicked in! If they got sick, they would have to pay over 25% of their GROSS INCOME in healthcare costs.
I would take 20 years of compounded returns and increased savings and pay $1,650 a month vs $800 a month. I bet people at 54 are much wealthier than people at 34. Makes sense. We have to compare relative variables. And as we’ve learned, assets are more important than income here. At 54, most people’s homes are very close to being paid off as well.
Maverick, how much more percentage wise or absolute would you say your net worth is vs 20 years ago?
In general, I’d have to agree with you FS. Let’s see, 20 yrs ago…gee, I dunno for sure, maybe 4X assets today excluding housing. I’ll say this, earlier this year when I solidified my early retirement dream, I did plan for just under $1,300/month for medical. I’m going to have to re-address my going forward spreadsheet plan and add an inflation factor of 8%/year for medical inflation and 3% for overall inflation to the remainder of my budget.
[in deep thought] Maybe I should start a blog to help pay for medical? I feel odd without a hyperlink for my name! :)
You are a wise man to agree with me!
A 4x asset increase over 20 years ain’t too shabby at all :)
Yeah, Sam..
I don’t think that anyone is arguing that the wealthy won’t do okay. But, what about those who aren’t wealthy? What about my friend, for instance, who just got “the letter” from her insurance company that her plan is going to expire on March 1, 2014. They’re a self-employed married couple in their 50’s who have hit the 100K mark in income the past two years. And since they’re both healthy, they’ve been paying about $500 per month for a catastrophic plan.
The letter from the insurance company stated that they’d have to pay over $1500 per month to stay on a similar plan that meets the new ACA guidelines. And they checked the exchange, and found nothing cheaper since they already have a very high deductible.
How would you feel if your expenses just rose $1,000 per month while you had two kids in college? How can you continue to dismiss these kinds of results when they’re so evident all across the country? All you have to do is read a few news stories to find hundreds just like this one. And, it’s only going to get worse as more people get kicked off of their plans and find our what kind of price increase they’re in the with the new exchange.
I would feel bad if I had to pay $1,000 more a month. But if I was making their type of income in Indiana with 25+ years of saving and investing under my belt, I wouldn’t expect anybody to feel sorry for wealthy ‘ol us. It would be my way of helping those with less financial means. It’s the same way every time I had to pay six figures a year in income taxes and the government raising taxes higher to 39.6%. Just gotta pay and hope the money gets redistributed to help others.
Take a look at all the success stories of people saving $8,000+ a year online or even on Twitter.
But, your comment assumes that all people in their 50’s are well off, which you and I both know isn’t true. What about those who have had financial hardship? Or who haven’t “saved and invested” for the past 25 years and are just now trying to catch up?
If you have to push down one segment of the population to pull up another, have you really accomplished anything? If you have to create a whole host of new problems to solve existing problems, have you really solved anything?
There were winners and loser before the ACA took hold. All the ACA does is redefine who those losers and winners are.
Let’s talk specifically about your $100k friends because talking in generalities becomes an endless debate. How are they doing financially?
I do believe someone in their 50s making $100k is generally more well off than someone in their 20s making $30k.
I think they’re doing fine but they have two kids in college. So, their monthly budget will take a $1,000 hit in the near future, and they don’t even get a lower deductible to show for it. She told me that they’re going to pay the penalty next year at least then see how it goes from there. I think they’ve earned plenty but it doesn’t sound like they have the room in their budget to pay $1,500 per month for healthcare.
No, because the older couple most likely has more and larger expenses like kids, mortgage,prop tqx & insurance, possibly kids in college, etc.
The Canadian SW Co was the lowest bidder, I would presume. Now the Canadian company is getting a lot of help! I hope they have good contract administrators and lawyers, because this is going to be messy to clean up. From my understanding, many, many lines of code will be trashed an rewritten. I also understood our govt made updates and new requirements near the website launch date. Gee, good recipe for failure, right?
Since I couldn’t get to the govt web site for quotes, my numbers are from ehealthcare and from my wife’s “retiree” plan prices. I’ve had colleagues from my former employer confirm these numbers as well. Not cheap to be an early retiree for medical. That’s why I firmly believe we need to ration healthcare more effectively to manage cost. People won’t like it, but that’s related topic for another day. :)
Oh, I just looked at Group CGI Inc., the Canadian SW Company. It appears that their stock actually went UP after the website launched! Moral here is to buy the healthcare stocks and take your dividends to pay the healthcare premiums. Can’t beat ’em, join ’em.
Damn, shoulda bought the company. Too busy trading Apple and Netflix stock.
Anybody who goes against the government will be crushed, fined, and thrown in jail. We must comply and try to go with the flow. Lots to be made betting with the government and the Fed!
Resistance is futile.
Taxable Income does not = MAGI. In your dividend example you reduced income by the mortgage deduction, but the mortgage deduction reduces AGI to Taxable Income. Would have no impact on MAGI (which is basically AGI plus tax exempt interest IIRC). Now if it was margin debt, then the investment interest expense would lower yield, which would lower gross income, which would lower AGI. But margin debt is variable and has a lot more nasty elements than a fixed rate mortgage.
That said, the real action for the asset rich, early retired is to get the cash into IRAs and other sheltered accounts, limit your income generation and use a HELOC, or spend down non-sheltered assets to handle cash needs without spiking the income.
My guess is these games will be lessened when I am ready in ten or so. Alas.
I like your suggestion of using a HELOC to take money out of our homes to spend on living expenses, which won’t count as income! Good idea.
@Ken
So if heaven forfend something happens to you or your family, and your medical costs are 10s or 100s of thousands of dollars, you are going to go it alone? Or are you going to sign up on the way to the hospital? Or just let whatever happens happens?
You can’t just sign up on the way to the hospital. There is only one open enrollment per year (except if you have a “life changing” event such as a death, marriage, divorce, etc)
Great article, Sam.
I support the ACA, but I’m not blind to its shortcomings. Paying $800 a month for health insurance would be prohibitively expensive for me right now on a $100k+ income. However, it isn’t socialist…no one is required to get health insurance through this outlet. My corporate HMO is still going to provide affordable insurance for me…and many, many companies will be doing the same for their employees.
I think we forget that this program is for ppl who can’t get coverage elsewhere or choose not to work some where that provides a group plan.
Last, the ACA can only be improved upon, and IT WILL!
At the very least we can all still vote in or out the officials that will (or don’t) make or fight for the changes we want, don’t let yourself become passive to politics – local and Federal!
P.S. Sam, I believe the source on your charts is wrong, the data came from The Kaiser Foundation, no? I know what you were doing, but Let’s try to be honest with the facts so the readers aren’t mislead.
JW,
This is the paragraph I wrote above the charts,
“The below are four charts I painstakingly put together by inputting income levels from the Kaiser Family Foundation Subsidy Calculator. A Silver Plan is used in the example where insurance will pay for 70% of the medical expense. Premium expense is capped at 9.5% of income, and out of pocket expense excluding premium expense ranges from $6,350 for a single individual up to $12,700 for a family of four. You are welcome to play around with the calculator to fit your situation.”
So as you can see, I give credit to Kaiser Family. And I indeed spent more than an hour creating these charts on my own. It’s like an artist who paints a famous landmark. I’m signing my name on my work. You are free to do the same.
Regards,
Sam
Nice breakdown, Sam. I’m fortunate that my profession covers our health care benefits in full, but I’m holding my breathe this month as the new policies are rolled out. I’m a little concerned about how the healthcare act will affect them. As for retirement, I won’t be covered (I missed out on the “benefits for life”) and will have to fend for myself. Maybe by then this nationwide healthcare plan will have the kinks all worked out. Fingers crossed!
That’s good to hear you have full coverage no premiums. Best to do research now before heading off to the wilderness. To know our backstop provides a lot of confidence!
I have a question some of you might think is stupid. But here goes… we are 2 people on social security income. We do not work outside the home, and one of us just went on Medicare a few months ago, the other is 63, so one person needs health insurance. We just had to cancel our insurance plan we had for so many years because it went up to over $1,600 a month for just one person based on a new age bracket.
Anyway to get to my question….I went to the exchange site and put in all our info. Our combined SS checks are just around 27,500 total. Our monthly mortgage payments are 2,000 per month that we pay from our savings account. We don’t really have any other large expenses, cars are paid for, property tax is included in mortgage payment. When I put the info in at first, I did not put in any expenses or mortgage, just our SS income. It said a premium of 775.00 – 1,020.00 per month, choose between 4 plans, with a subsidy of over 700.00, so we would only be paying roughly between 50.00 – 250.00 depending on plan choice. Fine by me.
When I had put in our figures with our mortgage payment in there, it kicked me into Medicad with no monthly insurance premium at all, so I eliminated the expenses section. I do not want Medicad and I want pay for this insurance every month. How does the mortgage deduction work? I saw it mentioned briefly in a post here but don’t understand it.
Can you get in trouble for not claiming your mortgage payment as an expense deduction, in other words paying more for health insurance than you are really supposed to? Are mortgage payments in whole deducted from the income section to reach the MAGI that rates are based on? Is it the whole monthly payment or just the “interest” part of your monthly mortgage payment (excluding principal & property tax) that counts? Should our son be giving us the money to pay our mortgage payment to make it “legitimate” or paying it directly for us to eliminate that expense on our part?
I truly do not understand this and hope someone can explain this part of it better. I’d be willing to pay up to 400.00 per month for medical insurance, but seems the government doesn’t want our money! We cannot afford the 1,600 premium for just one person by going off the exchange. Thanks in advance!
Saw on “Fox Noise” that if you accept a subsidy for healthcare beside Medicare – it is “Medicaid” & assets, (home) will become property of gov’t. Given its “Fox” I question this, but I am checking nonetheless. If true, this is alarming.
I am 51 and have a severe hereditary heart/aorta problem. I am asset heavy and income light. I have savings and investments, so I do not qualify for medicaid and in TX it is not an option anyway (TX is one of 26 states that opted out of medicaid increase). The act and the website did not plan for those 26 states opting out or for people who cannot work. I fall into a category of being too poor (no income) to get a subsidy. My premium went from $177/mo to $434/mo. I can afford to live for 10 more years if my health allows it and the stock market doesn’t tank. I have been denied disability even though I worked & paid in my entire life and will probably not live long enough to draw SS. Last year I worked parttime for 8 months and my condition took a dramatic downslide. I now have dissected carotids to go along with my severely dissected aorta. I am too sick to work, most of the time too afraid to leave the house. I watch my much wealthier friends get the great rates for the premium plan and cry. I was against ACA, but then thought it would actually help me – wrong. The only good thing I have received is the fact that no one can deny me insurance because of my bad health. I should have stayed with my old plan and then maybe I could afford to live a little longer. In my eyes, this seems to be not a plan for the poor, but for the wealthy.
Sorry to hear this LW. It doesn’t seem right you can not get a subsidy at all with your conditions. This seems like a loophole that should be, and will be closed.
We are in a similar situation in Indiana, another state that didn’t expand Medicaid–in that asset rich/income light situation after I suffered a detached retina in my early 50’s and have permanent impairment…not enough to be disabled but enough that I can no longer drive at night and commute to a job in my field. All our congressman will do is say he will look into my personal situation after I’ve pointedly asked him several times what Congress plans to do to eliminate the loophole that denies subsidies to people in our situation, yet provides huge subsidies to a family with an income of 140% FPL who would pay no federal income tax at all after exemptions and standard deductions! That’s patently stupid. I’m not asking him to help just me, I’m asking him what he will do to correct a clearly unjust provision of the law…and all I get are crickets from him. He just wants to skirt the obvious, glaring problem with the ACA for political reasons.
I am sorry about your situation. I am unclear as to what you would like to have happen though? I am a disabled person and have been for 15 years. I pay 100 for medicare. If you were to qualify for Medicare you would end up paying close to $400 a month for that if you are single if you included a medicare supplement, which you need with severe medical problems as medicare only covers 80%. I pay $185 for that. I know this because I tried to wing it for awhile without the supplement and it cost me much more. Then you must add on your prescription drug benefit. I pay 70 for that. So total I pay $365 and I have no assets but an old car and a house that is not close to paid for as I became disabled so young.
We are in the same boat. Can’t get subsidy. Spouse on medicare. I’m too young for medicare but too sick to work. We live on fixed income from SS & retirement. Our state didn’t expand medicaid. We can’t afford any of the ACA plans, AND we have an adult special needs son at home. I’m told the only way we can escape homelessness from this “affordable” healthcare nightmare is to divorce, sell our home, and/ or kick our son out onto the streets.
My husband and I net 28,000 a year at the moment in San Francisco and are being quoted about $600 per month for health coverage ( on the low end). Who do we call? This is impossible it’s almost a quarter of our income and we are just above the poverty line, but too poor to take this on.
Thanks for any help
Claire
Sam,
I’m working on some modeling for a non-profit. Any chance you can send me the .xlsx of the screenshots in this post?
sv
You’re free to take a snapshot and attribute the picture to FinancialSamurai.com.
I am unclear as to how you have been able to afford your medical costs with such a cheap policy. I also have serious medical problems and when I had a mid range policy I was getting buried in debt with my medical problems. Now with ACA the max set at like 6000 max. I had around 20,000 out of pocket four years in a row just for prescriptions.
I do not think people really had any idea what happened to a lot of us WITH INSURANCE if we developed a chronic health problem. They do not understand that prior to this you could easily loose everything you accumulated and end up on the street even if you had health insurance. Moreover, if we lost our insurance we were out of luck due to preexisting and were on the way to loosing our houses in order to pay for healthcare. I was so young when I got sick but I was lucky I had a retirement account I could start burning through and help pay my med expenses. I am not complaining because thank God I had it.
Now I have medicare with prescription plan and supplement costs me around 360 a month and that is comparatively cheap. It does cover just about everything though. BTW I have a graduate degree and was known enough in my field that I could call just about any corporation in my field and gotten flown out for an interview and look around. I am putting this out there because people think if they worked hard and were good at their job and had health insurance they were safe with the old plans. Not true. Once I got sick that all education and experience meet absolutely nothing. I could have easily been homeless if medicare had not kicked in. And I luckily have lots of people that love me. My “good” insurance sucked long term.
ObamaCare is going to destroy my finances, my home and/or my health.
And no, this is not some GOP troll saying this. I was a 2008 Obama campaign volunteer, the team leader for my community. And this is a true story…..
Six months ago I heard Obama say on the news that if you like your health insurance plan, you can keep it. So I did, and ignored all the health care brouhaha this winter. I thought the first 2014 bill I received from my provider was for two months, and just paid it. Then found out yesterday that, no, it had been for ONE MONTH. My monthly premium had DOUBLED!
I went into shock and scrambled, finding that though the new policy application period has passed, I qualified to seek a “marketplace” quote. But all the policies available are $200+ a month MORE than my previous policy, with less coverage!
I can’t afford this! I’m 59 years old, living on savings. My income is too low to qualify for a “subsidy” and my state has no Medicaid expansion. I suddenly find I have the choice of going without insurance, risking my health. Or paying for a policy I can’t afford, at the cost of my savings, my assets and possibly my home.
Go bankrupt, lose savings/house. Or lose access to health care. Which would you choose?
I’m in great health, slender, active, healthy diet, rarely see a doctor outside of annual check-ups. I’m a smoker, but unlike everyone else, my blood pressure is low, I’m not obese and I’m not on any prescription drugs. Moreover I’m frugal and careful to stay out of debt. I’d be fine if not for current state of apoplexy.
I have to decide today, for if I don’t buy a policy today there will be a gap in my coverage and I’m not sure I can buy a policy later. I’m in shock. Nobody cares. You remember the Obama campaign logo, with the road going into the hills? Well, I’m just the roadkill.
If MAGI is used for subsidey calculations, then one cannot lower his AGI by contributing to IRA’a and 401k’s correct?
So does ira contributing count tward lowering magi under the afforadable care act or not? One site says yes and another will say no?
Yes it does. The amount contributed to your IRA will directly lower your MAGI by the amount you contributed.
If you don’t work and live off dividends and interest, can you still contribute to IRA?
We were forced to change our individual insurance last Fall and could not find anything available that was not ACA. We always believed that as individuals who purchase their own health insurance we would have options of being in the ACA or out of it. Nay, nay that is not the way it works.
We are 60 and 61 years of age and have our own very small business but it is a Sub S Corporation. We cannot retire at this point. The cost of insurance coverage has been devastating to our finances. Our cost for silver coverage (the standard on which the ACA is built) is over $15k per year and we have high deductibles. My husband was in the hospital this year for only two days. With our deductibles, copays and items not covered at all, we will pay over $23k for our premiums plus the medical bills, prescriptions, etc. That is if we have no further incidents this year. And we are healthy adults that have rarely used health care in the past.
With income levels just above the subsidy thresholds this is anything but affordable. Our coverage before was better and it was $5k less per year – which is still a lot to pay. The percentage of our income that goes to healthcare is absurd and egregious.
The ACA does not hurt the wealthy – they can afford it regardless of price. The ACA helps the poor. The ACA kills those of us on the lower end of middle America.
Debbie,
I am very sorry to hear about the rising cost of health care for you. In any government-led change, there are winners and losers. $23K in medical bills is outrageous.
Is it a possibility to make within the income limits in my chart to lower your premiums?
We have an apartment building we would like to sell, how will the profit affect our health care subsidy? Also if we sell our primary residence is that income for the marketplace? We need to do something but want to do the right thing.
I’m confused about the ACA. In my case, a single mother of three on a limited income of under $6k a year, I checked for insurance on the Obamacare website and my premiums were almost $200 a month just for myself. The deductible around $7k a year which is more than I get in a year. Now keep this in mind, my monthly income is around $500 a month. I pay rent and utility bills plus I have to provide gas to get back and forth and still have to take care of three children. I am not eligible for Medicaid in my state because they didn’t expand coverage (not that I want it) but after my obligations are paid I can’t afford anything. I know most would say get a second job but due to the fact that nothing is available, (most places where I live won’t hire you without experience) and I’ve applied for everything imaginable with no luck. How is this affordable for people with barely any income? I would literally have to not pay my light bill and my water bill just to pay the monthly premium for this! Is there any other options out there or do I just stay in the gap where nothing is available for me? If I could afford OC I’d be more than happy to get it but I just can’t see struggling to spend more than I make to cover a deductible in which I’d never meet, I’d be better off paying out of pocket anyway. If I could afford to anyway. Someone please explain!
Kristina, I think you are among the many that are negatively affected by the ACA. Our political representatives could have come up with plans to assist those that need it without financially killing everyone else. This law needs to be repealed and another method created to achieve better results. That doesn’t help you right now – you are like many of us – stuck between a rock and a hard place. People need to make more noise about this so that the demagogues start to understand that this law is egregious.
I do not understand why you dont qualify for pretty much free, We make $22,000 a year and pay $170 month, you have to pick a silver plan. I called the number and had them help me when I first tried.
My husband has a friend who is married and they still have one daughter age 15 living at home. He is paying on a previous bankruptcy and cannot afford the ACA. He cannot get a subsidy for his family’s health insurance through the ACA because he makes just above the amount to qualify for the subsidy. He says that even going to his employer’s health insurance, he has to pay a co-pay amount of $200.00 every time, either he or his wife sees a doctor in-network and this is on top of his monthly premium payment. If the State’s do not take into account the living expenses, such as a mortgage or rent, food, clothing, electricity, gas, car insurance, ect….. how do people that do not qualify for a subsidy, but cannot afford the Affordable Care Act get help?
I have come to the conclusion that the people that are just above qualifying for a subsidy get shafted. Shame on this health care plan that gives poor people health insurance but shafts the rest of the working poor. Obama and the democrats that put this plan into place are just plain horrible!!!
Delores, you are EXACTLY RIGHT. The plan shafts a great number of people that are just above the defined level of poor, but do not make enough money to make it. And it gets worse if you are older and at this low income level as the premiums under the ACA are egregious. Much higher premiums than individual health insurance was prior to the ACA and the coverage is worse – at least for older adults. The only reason implementation was delayed for many people until 2015 is the elections. There will be a revolt when this starts to affect more people – when it is no longer ideology for them but reality. It is a bunch of crap. The whole intent was not to help the poor, but to push more people into poverty. There were lots of ways to help the poor without creating this type of nightmare for everyone else.
Ok I asked before and got an answer that if I put money in an ira my magi would go down. I see on here over and over that this is not true? I would hate to put it in then find out I had to pay back money cause I did. Can I or can I not lower my magi by putting contributing to a traditional ira? I have looked at the 1040 and it appeares I can, please the right answer once an for all
Yes!!! If are eligible and you contribute to a traditional IRA it will lower your MAGI! AND If you have a plan that is HSA Qualified, You can open a Health Savings Account to help pay for out of pocket medical expenses. The amount you put in to your health savings account will also reduce MAGI
I have a hard time grasping my wife’s and my problem. I will be on Medicare in July but my wife’s ACA premium stays within $20 that we’re both paying total now since they add my SS etc. income. This means we will be paying ~ 15% of our income.
Wow. So much to comment on, it’s overwhelming. First off, the poverty levels are a joke and realistically should be much higher. Second, this insurance scheme does not account for unusual situations such as couples where one is receiving medicare but the other isn’t old enough (they count the medicare recipient’s SocSec towards income for ins purposes yet the retiree doesn’t need ins bcuz they get medicare); and if this same couple has an adult, special needs dependent child at home, they are even further penalized with higher insurance costs. Self-employed and don’t know what your income will be? Just guess and hope you don’t wind up owing the govt money back in overpaid subsidies. Lastly, it stinks that people who have the expendable cash in large sums to sock away in an IRA or similar can get lower insurance costs than another couple making the same amount but who live check to check and don’t have thousands lying around they can use to reduce their MAGI. And no one ever mentions the true TOTAL costs (prems, deducts, co-pays, drugs & services not covered, etc) of these plans when crowing about them. Add those up, and it comes to far more than the 9.5% of income that insurance is supposed to stay within in cost. Our family is looking at paying 30+% of our income with no subsidy and no way of increasing our income because one is retired (and on soc sec and medicare), the other is unemployed & too sick to work but can’t get medicaid, and we have a special needs adult child at home. The retired spouse was the one who USED to provide the insurance but now on medicare, cannot. This ACA is a financial disaster for us!
First time visitor, great article Sam!
I have been looking for some example, very simple and easy to show the exact dilemma people in my situation are in thanks to socialized medicine that instead of covering all, picks winners and losers.
I work in Florida, and my boss decided to provide health care last year. The company is almost entirely composed of medium to high paid PhD scientists, all except one was in fact “born in the USA”. The high paid ones complained over and over about no health care coverage, of course, they are all from the Soviet Union or other socialist countries, constant complaining, wasting hundreds of hours talking about it. Finally, the boss says yes (educated in Moscow), but he allows one woman to “decide which plan we have”…. well, she is well paid, so she picks the most expensive plan, and her and her husband, childless, make $170,000 per year.
Result? the only native born American in the company is the only uninsured employee, and for some reason, that does not seem to bother any of them.
I am the only non-PhD (but I have more education and experience than any of them), and I have to do a lot of work and thinking for them, but since I am not a company pet or foreigner, I have to work for $15/hr, while they average $40-100/hr. My monthly payments (my 30% portion) is $270 a month, and will continue to rise, the out of pocket is about $3000 and the deductible is $6,000. Seriously folks, I fear daily what could happen to me. Perhaps I should get a minimum wage job or wait for a health tragedy.
You call this America? The H1-b visa program is a scam, cancel the whole darn thing.
You mention that you are “Thrilled for those people who do not wish to work into their 60s”. I don’t get it… If you want health insurance coverage, why shouldn’t a person be required to pay for it? Your statement infers that the rest of us should pay for their medical care just because working is inconvenient.
William, I agree. This administration talks about people being ‘job locked’ because they have to work, even if they don’t want to, in order to pay their bills – such as healthcare. That’s what most of us are doing!!!! I’d love to sit at home as well, but I have to work to pay my bills and eat – not to take fancy vacations or have a new car – just to survive. So I am supposed to pay for the people who don’t want to work but haven’t planned and saved up enough for retirement. Really???????????
My wife and I are one of the success stories of the ACA. We are self employed and were getting royally screwed by healthcare prior to ACA. In order to afford healthcare, we carried $10,000 deductibles each with $28,000 max out of pocket. When I had a stent a couple years ago I of course got socked with a $14,000 hospital bill in one day!! Still paying on that one. Now, for less cost per month we have a PPO plan with a group deductible of $700, max group out of pocket of $4,500 with excellent co-pays to doctors and specialists and got to keep all of our doctors. No longer do we have to worry about getting financially wiped out because of a medical reason, which no one should have to deal with. If you have to spend time in the hospital, the last thing you need is to lay there worrying about how you are going to pay for wanting a little more life. Although ACA is far from perfect, I think most would agree healthcare was severely flawed before and something needed to change. Pre-existing conditions was such a ridiculous nail in the coffin too. Unfortunately for 2015 everything went up drastically like in excess of 35% but we are still far better off than we were prior to ACA. For now at least.
Anyway, to my question. Later this year my wife will qualify for Medicare. That will change my plan from a group to individual. The subsidy and plan coverage will change for me then. I read that the subsidy calculation is basically figured off of your projected AGI. This would severely lower my subsidy since our current AGI is for joint income. I am assuming that I would remove the income for my wife when projecting 2016 to get an accurate account of income for just me and my individual plan. Am I assuming correctly? That would make total sense to me but usually what makes sense to me is different than how it actually is. Thank you.
My husband got sick and then list his job and insurance. We are currently struggling to live off of my disability which us about $13,320 a year. We are guardians to two little girls. They have MEDICAID. I have Medicare/Humana. We tried to get my husband insurance and guess what? We don’t make ENOUGH money for the subsidies. We would have to make that minimum of $22,000 for a family of four in order to get the subsidy. Some “glitch”. If you live in a state that didn’t expand Medicaid, you are SCREWED! This is the dumbest, most convoluted piece of crap legislature ever written. And, yeah, they KNEW it was crap when they were writing it.
My family falls into what is commonly called the “family glitch”. We make too much to qualify for medicaid, and my husband’s job offered insurance is just below 9.56% of our income. To insure the entire family it would be 30% of our income, which is unaffordable to us. If we contributed $5000 a year to a 401k or IRA, it would bring our MAGI down enough to make the job based insurance more than 9.56%, in turn allowing us to use subsidies to purchase insurance on the marketplace. Would my husband’s employer then have to pay fees because our lowered MAGI renders the insurance they offer as unaffordable? It doesn’t seem quite fair to them, because they have no control over how much we contribute to our personal retirement accounts.
I have sold my company and am starting a farm so I will be showing a very low magi going forward. My wife also wants to stay at home and quit her job. So, the result will be our income showing about $50,000/year max. My question is how does the affordable healthcare act look at income? Do they look back at the previous year, which would show we made over $300k, or does it look at what we are going to make going forward once she quits her job? Also, part of my company buyout is that they pay me quarterly for the next 4 years in addition to the lump sum I already received. Will that be looked at as income? Do we need to show a certain time period of lower income before we can qualify for the healthcare subsidies? Finally, is there a place to find these answers other than posting them on this forum?
Thanks for the help
I’m so surprised nobody has a problem with any of this. Like where do subsidies come from? Why is the treasury paying directly to insurance companies? On and on. Obamacare is income redistribution at its finest. Not only does it take from everyone, it takes also from the very poor when it’s time to collect on their coverage. $6000 deductible anyone? How many who get a subsidy have $6000 to cover that? My aunt who works for a law firm recently lost her coverage. The lawyers decided they can’t afford it and would rather pay the penalty. These are ultra rich LIBERAL democrats BTW. So she shopped the exchange and has a plan with a $6000 deductible. While one of the lawyers just bought a 3 million dollar vacation home. They also have women working there for minimum wage. Obamacare hasn’t fixed a thing. All it’s done is on paper made everyone look like they have insurance because it’s mandated. It has shifted the burden from employers to the government. It’s a sweet deal for a company. I would drop coverage and pay the penalty myself. The problem with health insurance was cost. The ACA did nothing to address costs! in fact the ACA forces people to pay more of their health care costs through deductibles and coinsurance. Which philosophically isn’t a bad thing. It’s your body, pay for it. The ACA is also hugely discriminatory. The poorest typically minorities have the worst coverage and will pay the most while wealthier typically white will pay less. Why isn’t the insurance, deductibles and coinsurance the same for all in the exchanges? Why are some people bronze, some are gold and some plantinum? That’s putting a value on human life based solely on income ultimately race or gender and that’s discrimination 101! So you see, obamacare stinks. There is nothing affordable about the affordable care act. It’s redistributing wealth in the most insane way. You might have insurance now and ok that’s nice, but someone else is now paying for it. In a big way. We could have just put these people on Medicare. Solved. I’ve seen my insurance since obamacare go from $338 to $478. It’s finally too much and I shopped the exchange. I had a $300 deductible. I now have a $1500 deductible. For a lot less coverage and a lot more coinsurance. If anyone stopped to really analyze what it’s done they would see we all just got screwed. No reach around. Thanks OBAMA.
Saw this come across Twitter today. There are lots of problems with the ACA, it is far from perfect, but it is a move in the right direction
Prior to the ACA, millions of people were prevented from getting insurance through no fault of their own. Many people are born with or develop “pre-existing conditions” and are F#%&ed by the insurance system. Makes great sense for a business to exclude “those people” from their pool, but less so for a civil society. In the end we pay for it anyway, just in a horribly inefficient manner
Sam, I like your analysis, although I would suggest one thing: for most people, a silver plan is probably too much insurance. Sure, you get a lower deductible, but in most cases you are just paying in advance for services that you might not use. It would be like paying $20 extra per month on your car insurance, that then provides a free monthly oil change that costs $20. What, you don’t need an oil change every month? Too bad
We are one of the families that received a letter saying that our policy would be cancelled. No big deal, we just get another one. Prices were higher, going up from $233/mo to $501/mo, more than doubling. I’m sure the previous cost of insurance was actually too low
But we couldn’t just compare by price… this plan also had prescription drug benefits, maternity benefits, lower deductible, etc… It makes sense that more coverage costs more, even though we were unlikely to use those benefits
The subsidy could help, depending on income. I modeled the subsidies as an effective 13% tax on income between 138% of FPL and 400% of FPL. Details:
For each dollar of income earned above 138% of FPL, in our case the subsidy was reduced by $0.13. At the lowest income level, the max subsidy we could have qualified for was about $5282, which would have resulted in lower insurance costs with better coverage.
Instead, we cancelled our insurance outright. We are outside the US, and prior to the ACA we carried insurance that we could never use, on the small chance that we developed a pre-existing condition. The Equal Access to Care clause removes this limitation, and we didn’t want to take the subsidy since we didn’t need it. Win win
At present, I self-insure. I had a chest X-ray, EKG, and some blood work awhile back. Total cash price was about $50. I think that is what they charge for a single Tylenol in the US. My wife is covered by the single payer health system as we are presently in her native country. A 2 am emergency room visit cost us $30.
If/when we return to the US, we will get insurance on the exchange. NOT having insurance in the US is like playing Russian Roulette, eventually you get shot. With no pricing transparency, hospitals next door to each other charging 10x for the same procedures, and the layer upon layer of bureaucracy that has the US paying 2x more per capita on health care than the next industrialized nation with objectively lower outcomes, it makes sense.
And as one of those high net worth / low income families, I’ll happily pay 2x what we were paying before knowing that it provides equal access to those previously discriminated against
Good afternoon. I have a question re:ACA. I retired early and am living on a small trust left by my mother. Basically, it allows me to put off Social Security for another year or 2. Last year I enrolled in a health plan through Health Care.Gov and received a subsidy.. This year the premium went up over $100. Now Health Care.Gov is disputing my subsidy. I sent them a copy of my bank account which was listed as acceptable documentation. Now they state they want more documentation. They suggested pay stubs, W-2 or unemployment checks. Obviously, I have none of these. I understand they cannot include my assets in their decision. The cold, hard truth is beginning to dawn on me-is it possible with no earned income I do not qualify for a subsidy even though I’m able to afford the insurance with the help of the subsidy? I can’t be the only person in this situation. In addition, I do not qualify for Medicaid.
I see this article was written around July 2013, I’m in Fl., when I looked at the silver plan for my family of four, in 2014, the cost was $13,800, and with an AGI of $60,000 I was told I would get a $6,100 subsidy. $13,800 – $6,100 = $7,700 which is just about what I am paying on my existing policy. My existing policy wouldn’t be so high except, as the Obamacare regulations started in 2012, I had an 18.4% increase, then in 2013 I had a 19.2% increase then in 2104 I had a 24% increase.
Now in 2015, we are hearing families that were promised a certain subsidy, are now getting a tax bill because the subsidy was not as high as they were told. I believe once enough Obamanauts sign up, the subsidy will slowly slide away.
It was convenient that you show no data for the less than amounts. Actually (as in Texas) the amount is 0. Those families pay the full price. Texas did not accept the Medicaid to fill the gap between the state plan and the ACA.
Sorry to be so long, I registered here with an email I rarely check.
“It was convenient that you show no data for the less than amounts.”
Well ya, I guess it was, but you can do your own research for any family, zipcode, and income
that you desire. Doesn’t take 3 minutes.
Start here, >https://www.healthcare.gov/< then hover on 'GET ANSWERS', when the box opens find in the center column, 'PREVIEW PLANS AND PRICES. Click on that and start entering data as ask, you will see some items can be skipped to get to the final numbers.
I entered my zip, 32405 for my family of four, 60yrs, 55yrs, 24yrs and 21yrs. non smokers or any of those other boxes. I used $60,000 as my MAGI. (Modified Adjusted Gross Income)
The result for the least expensive premium, BCBS Esential 1452 plan is $177 month. The subsidy for that plan is $1,224 per month or $14,688 per year, I would be responsible for
the premium of $2124 per year, plus deductible and OOP expenses.
So I could get $14,688 of subsidy.
Also live in FL, married with no kids. Premiums are $998 per month which is 11976.00 per year. Since our actual income is around $62000, based on your scenario, the maximum we should have to pay is 9.5% of our income. So, we should be paying $5890.00 per year. Seems more like we would be paying 19% of our actual income. Please note, this plan has a deductible of 9500, and out of pocket of 11500. So we would have to pay $23476.00 out of pocket (this includes the monthly premium) before insurance paid 1 dime. Sorry, this is by no means AFFORDABLE.
Damn, that is a lot! Perhaps raise the deductible?
I’m looking at $1,550 a month for two with no kids. Crap!
There is something flawed about your analysis. As a single person, age 60, I moved from CO back to MD 2 years ago. While rebuilding my business here in MD, the subsidies were a lifeline. In 2015 I paid $178 in premium per month for a Silver Plan, had no deductible, and a $2500 OOP Max. Now that my AGI will be a “whopping” $53,000 approximately for 2015, my premium for a Silver Plan will go up to $750 per month, with a $1600 deductible, and an OOP Max of $6550. I have health issues, and they’re not from not taking care of myself through the years. They are through no fault of my own. So I have to be careful about the policy I pick. There was very little difference on the overall OOP between the Bronze and the Silver, only the Bronze plan has far worse coverage, and I will have huge unpredictable expenses likely for most of the year. It is not affordable for me to have an AGI of $53,000 and be paying about 25% of that out in OOP medical expenses and premiums.
Hi Julie,
I don’t know if your response was to me or not.
I just poked in all the data at The ACA website.
You can confire my numbers or put in yours.
Start here, >https://www.healthcare.gov/< then hover on ‘GET ANSWERS’, when the box opens find in the center column, ‘PREVIEW PLANS AND PRICES. Click on that and start entering data as ask, you will see some items can be skipped to get to the final numbers.
I entered my zip, 32405 for my family of four, 60yrs, 55yrs, 24yrs and 21yrs. non smokers or any of those other boxes. I used $60,000 as my MAGI. (Modified Adjusted Gross Income)
The result for the least expensive premium, BCBS Esential 1452 plan is $177 month. The subsidy for that plan is $1,224 per month or $14,688 per year, I would be responsible for the premium of $2124 per year, plus deductible and OOP expenses. I think you have one misthink, Out of Pocket includes the deductible.
So I could get $14,688 of subsidy.
Hi I am retiring early in a opers plan I had 26yr but my back kept giving me trouble, if I stayed the full 30 plan no reduced benefits, but I am in a tradional penison reduced benefit plan, with a plop I would get 1,048 dollars a month without plop 1,092 amounth, I have no iras, no cd, my husband is on ss and a penison which together we will be making 30,000 ayr he has no investments of anything either, do I qualify for low income help with health insurance? well thanks and have a great day’
P.S. I forgot to tell you I live in Marion,OHIO 43302 when I asked my first question above sorry,
I’m a flaming liberal but what I’m paying for insurance, just for myself, is enough to turn me into a conservative. My husband is retired, I’m self-employed, our 19-year-old daughter is in college. My husband receives Medicare, daughter gets TennCare, so the insurance we bought through the ACA is just for me; we’re paying $380 a month for a bronze plan with a $5500 deductible. No subsidy, although according to your chart we should be receiving $980 a year. That’s bad enough, but last week when SCOTUS confirmed the ACA, NPR interviewed a woman in Texas who said, had the court ruled the other way, her monthly premiums would have “doubled to more than $800 a month.” That means she’s receiving more than $400 a month in subsidies and for that kind of money, I’m guessing she’s got a platinum plan. Which fits right in with our neighbors who work under the table, don’t report their income, and have a subsidy that lets them pay $90 a month for a gold plan with a minimal deductible. It’s not right. I like to believe I have a social conscience, but the way this system is geared isn’t right.
I agree. I do get a subsidy but my plan amount has risen every year even though my income has not changed. My premium less subsidy will be 2 and half times what it was this year( if I still qualify for the same amt of subsidy). If I go to lower plan, it would not cover my health care needs.
Elisabeth says,
“I’m a flaming liberal but what I’m paying for insurance, just for myself, is enough to turn me into a conservative.”
Obama has done that, to many people.
I flipped over 30 years ago, when I applied for a subsidized mortgage through the state.
Our income easily qualified, but my wife and I lived very frugal for the first 3 years of marriage,
the money we saved was earning 10% and this put us over the maximum to qualify for the subsidized loan. So because we tried to get ahead, we were penalized. Instead of a 9% loan
we looked at a 16-3/4% loan. Yes, this was around 1984, 16-3/4% was the going mortgage rate.
My son that lives with me had a medicare card and lost it upon turning 21 lost it in June looking at Obama care at a reduced rate 3 in my home my income is the only income I am retired under 20,000 confused on how to get this insurance
Question: My wife is applying individually for ACA medical coverage in New York. (I am covered by Medicare) Our modified adjusted gross for 2015 will exceed amount permitting any premium reduction; but she is leaving her job next month. Is there a way we can apply in the future for a premium reduction once her substantially reduced income takes effect?
Thank you
Obamacare is based on coming year income. They want you to estimate your income for 2016 to see if you qualify for healto care through the marketplace and/or a subsidy. For hourly wage earners like myself, it makes it a little difficult.
I was a family of 4 and was receiving $465 dollars a month (living in West Palm Beach, Florida) with a Humana Silver 4600 HMOx Florida plan. I got pregnant gave birth and was cut off on August 21st, 2015. Mind you I had already met my maximum out of pocket share of cost to Humana and was supposed to be covered 100% until 2016. My husband kept his subsidy. Was told by ACA that I ‘should’ qualify for medicaid. Of course because Florida did NOT expand medicaid was told by medicaid I do not qualify for medicaid. Son was born with Cleft palate and lip.
Call back healthcare.gov and get transferred and told a mirage of stories from IRS sets the subsidy amounts and because you will claim your son next year you no longer qualify for your subsidy but your husband does. Not sure how next years tax return benefits me for the rest of this year. I’ve been transferred and told thus far 6 different stories as per why I no longer qualify for a subsidy. Then was told to file an appeal, another rep tells me if my husband qualifies I should too. No one has any explanation as to why the subsidy was given to humana for the month of August but I was cut prior to being discharged from the hospital now on the hook for thousands of dollars worth of hospital bills because my insurance was cut the day I gave birth.
The ACA representatives are incompetent. The law is completely screwed up. Appealing to medicaid in a state which refused to expand medicaid leaves one with 0 options. I already know my appeal will fall on deaf ears. my husband does not have any employer health care coverage offerings so I am stuck in a family ‘glitch’ supposedly. Lovely system really. Let’s reelect Rick Scott who was involved in healthcare fraud twice and continue the 20 billion dollar healthcare fraud featured on 60 minutes out of South Florida instead of expanding medicaid and fixing the glitches. Hopefully I will hurry up and die quickly. The typical republican plan.
Nicol same here in Arkansas. Our governor stinks.
Family of soon to be 6. Paying $1000.11 per month for silver (HMO). Being a business owner does help some in that its deductible. However, I still have a very serious problem paying for other people and receiving nothing but increasingly higher premiums in return. Obamacare may have been a necessary step to get our county on parity with the rest of the world but I sincerely hope it turns into a completely universal system instead of just another way to hold the middle class down. Looking very seriously at Health Share Ministry plans if things don’t change. It just ridiculous when before all of this I was paying $375 a month for a family PPO with significantly better coverage and out of pocket. As is, I basically have no insurance until I hit my $2700 deductible.
Six years ago when my premium hit $9,900 for a family of 4, I raised my deductible from $2,500
to $10,000, the premium dropped to $4,500. A very substantal drop. In less than two years I made up the $7,500 difference in the deductible. Of course now, the premium has increased to $8,450 for a family of 3. People winced when I said I had a $10k deductible, now many have Obamacare with a $13,200 deductible and aren’t happy.
I do not see the answer to the question: What is the income level at which ACA becomes free?
Question , what qualifies as income under ” ObamaCare” ???
Bumped in to this website out of frustration…and leaving in more frustration. Samurai, I dont know who you are…but you show nothing here more than being a stump for this horrible Obamacare program. You must be a liberal because all you do is trump the program for “helping the poor”. Well F that line of thinking. There are MANY of us making just over the min. to get a subsidy and are screwed with HUGE deductions and HUGE premiums for a worthless Bronze plan. In addition to that, those that get a subsidy, then get rammed in the a– with penalties if they get a job and their income goes up above the subsidy cutoff. Geez… if you buy in to this socialist disaster of a program, then that says a lot…especially for someone who calls him/herself “Financial Samurai”. Buy a clue or shutter this website. Your opinion is biased, ignorant and worthless. You must be like Hillary and are completely out of touch with reality. Trump is as well. Bye.
I was married 2014 and am dealing with the harsh reality of having to pay back all my 2015 Obamacare subsidies. Close to 5,000 dollars. I really dont understand the covered CA software. I enter all the correct info and the results show that my premium with a PTC is 25 dollars per month based on the facts I am buying Individual Health Insurance and cannot get health insurance from my husbands workplace. But at the end of the year when filing my 2015 taxes filing jointly (as Obamacare requires you to do) my combined income with my husband puts us over the 400% poverty level and Im have to pay all the subsidies back. All I can do now is try to avoid this in the future by putting money into IRA for 2016 tax period and following your advice in your article. Why does Covered California software give such conflicting results?
I liked this article and wish you would write a follow up to it, now that we are a few years into Obamacare. Have the income requirements for subsidies changed at all, for example. What happens if someone starts out the year getting a subsidy and their income increases, etc.
A follow up would be interesting, I recently looked at the price of an ACA policy for my family of 4,
Silver plan. The cost is $18,455 vs $8,290 in this 2013 article.
Prices have definitely surged higher.
In a big government scenario, it is all about the middle class and higher subsidizing the poor.
Most people commenting made too much for subsidies. What about folks who make too little?My wife and I are in poor health and can’t work full-time anymore. We need health insurance, but fall Under the minimum(about $12000 combined). Insurance premiums are more than we earn. Where do we go for affordable insurance or healthcare?
You don’t have to take every available deduction. Don’t take the standard deduction. Use Schedule A even if there are no deductions on it. That adds $6350/person to your MAGI. Of course, you will have to pay taxes on that extra amount, but the tax will be much lower than than the subsidy. If that’s not enough extra, skip one or both exemption for another $4050/person.
Boy, did I goof, and my comment is not worth publishing. Deductions are post MAGI. I do employ the same method, though, on my Schedule C, but that, of course, requires one to run a business.
This is BS.
I claimed the EXACT AMOUNT of earnings and still have to pay back 45% of my subsidy, and that’s on the lowest costing bronze plan. The first year of Obamacare I picked a gold plan and ended up paying back 55% of what they gave me… and I always entered the EXACT AMOUNT in earnings for the year.
Check out the latest: Healthcare Costs Are Outrageous! How Much Should One Comfortably Spend On Healthcare?
The ACA forced responsible Americans who have been purchasing healthcare insurance for decades to lose their healthcare. We still get to pay premiums and they are higher premiums but we no longer have healthcare because we cannot afford to go to the doctor after paying the premiums. I have needed to go to the doctor a few times this year but did not go because I can’t pay anything in co-pay and all of any test. So I don’t even want to know what is wrong with me.
Our taxes help support Medicaid which we had when we were children and very poor. Back then we got dental, vision, hearing… all things that are necessary for EVERYONE. ACA doesn’t even cover these basics.
More American have “Insurance” big deal. We don’t have healthcare anymore. AND more people are NOW dying for the first time from preventable disease. Because they have worked all their life. Do not have insurance they can use. So they are just staying home so they do not deprive their spouses of their retirement. Anyone who thinks the ACA is just wonderful doesn’t care about anyone else.
I know a few addicts who refuse to work or who can no longer work because of their addictions. But they now can go to the doctor constantly (and do) while I cannot. We earn 30,000 a year gross. And are forced to take my husbands work offered insurance. … prior to Obamacare we had a “catastrophe” policy only and it paid better than our current EXPENSIVE insurance.
the “Health Insurance” for everyone is a lie. We were better off before, much better off. And poor people could always go to the ER and get Medicaid. Which paid much better than the current mess. And if you are poor the ER and Hospital would most like forgive your bills. I know they always did my dad. I completed a few pages showing his income, assets, and bills.
And each hospital will forgive the bill.
Obamacare was a huge mistake. And very poorly done.
Anyone who thinks otherwise has never been poor and never been lower middle class working for decades.
Found on a friend’s Facebook page.
AN ENGINEER EXPLAINS “OBAMACARE” IN FOUR SENTENCES..
Is there a single soul who is surprised that an Engineer came up with this 10,535 pages reduced to 4 sentences?
A Great summary by a Notre Dame University engineer..
Here are the 10,535 pages of Obama Care condensed to 4 simple sentences. As humorous as it sounds…..every last word is absolutely
TRUE!
1. In order to insure the uninsured, we first have to un-insure the insured.
2. Next, we require the newly un-insured to be re-insured.
3. To re-insure the newly un-insured, they are required to pay extra charges to be re-insured.
4. The extra charges are required so that the original insured, who became un-insured, and then became re-insured, can pay enough extra so that the original un-insured can be insured, so it will be’free-of-charge’ to them.
Let’s be frank, the US health insurance system has been pretty bad for decades, but Obamacare took a bad thing and made it even worse. Obama tapped the middle class to subsidize the poor, leaving the poor with health insurance, but the middle class with unaffordable health insurance. If the response to it had been widespread non-compliance seven years ago then you might have been able to force him to repeal it. It can’t be fixed. It has to go. Instead, because people blathered on about how much someone would be able to save by cleverly managing their money (even though it should have been obvious the government would never allow you to get away with actually saving money), you capitulated, tugging your forelocks to your political masters.
In New Zealand we had a similar situation a few years ago when our then parliament signed us up for Kyoto assuring us that because of our clean green economy (and we are fairly good) we would make about $2 billion a year in carbon credits. When the matter was finally resolved it turned out that we would be paying $2 billion in carbon credits. Remember, politicians lie. It’s what they do. It’s all they’re good at. Don’t be a useful idiot shilling for them.
I definitely do not have an answer BUT something is so wrong with our health insurance system historically based on employer sponsored plans. Thank God for the ACA even though it is not even close to perfect. Why is the conversation not focused on the fact that the insurance companies have been robbing us blind for decades. Here is the typical scenario: You work your butt off for years and enjoy a real good benefit plan at your job at pretty reasonable prices. You have 6 weeks of sick days stored up. Fantastic. Then you get sick and need surgery and some rehab and maybe can’t go back to work for 8 or 10 weeks. Guess what happens after your sick days expire? You are now responsible for the FULL COST OF YOUR HEALTH INSURANCE so your company sends you a bill for $1400 and you are no longer getting paid. Maybe you have short term disability insurance that pays you 60% of your wage but that is not going to cover your full cost of health coverage. So you have paid your employer sponsored health care premiums for years and years but now that you are sick you can no longer afford to keep your insurance. WHAT A RACKET! These insurance companies have been doing this for decades and decades. Raking in the money but rarely ever having to pay the big bucks for health care because they will never pay a dime for anyone who becomes really really sick. Why is this even acceptable? Why is this not part of the conversation? We need national health care and not insurance based on employment. Isn’t that an oxymoron? How is this even legal? Most people do not apparently realize that individuals who become extremely ill (cancer, chronic disease) are covered under Medicaid because they lose their life savings, their home, anything of value in order to pay for their care until they are destitute and qualify for Medicaid. They may have been gainfully employed and insured for decades but their insurance company is laughing all the way to the bank and in shock that we have let them
Hi there, my name is AB currently reside in texas, santonio, am barely 2 month pregnant without an insurance, being trying to get an affordable insurance with no luck, my taxable monthly income is 10,000$, please can anyone help me find any affordable healthcare plan?
Thank you
So according to Samurai, it is OK for people to retire in their 30’s as he apparently has done and have the rest of us cover the full cost of his insurance until he hits age 65. Absolutely crazy. If someone can retire at an early age, they should be required to pay the full cost of their health insurance. i don’t need to subsidize his retirement. Health care subsidies should be means-tested on net worth and annual income, not just annual income.
I pay $700 a month for health insurance, and so is my wife. I’m not sure what you’re talking about, but I know I am helping my fellow brothers and sisters on the lower end of the income spectrum afford healthcare.