<p>^ actually, each time I go back to verify, it all gets cloudier. Healthcare.gov says:</p>
<p>The Affordable Care Act provides a new tax credit to help you afford health coverage purchased through the Marketplace. Advance payments of the tax credit can be used right away to lower your monthly premium costs. If you qualify, you may choose how much advance credit payments to apply to your premiums each month, up to a maximum amount. If the amount of advance credit payments you get for the year is less than the tax credit you’re due, you’ll get the difference as a refundable credit when you file your federal income tax return. If your advance payments for the year are more than the amount of your credit, you must repay the excess advance payments with your tax return.</p>
<p>The subsidies are a tax credit, but the credit can be paid in advance directly to the insurers via the exchanges. However, the person does need to file a tax return on a timely basis to claim the credit.</p>
<p>Here is how it works, ideally:</p>
<ol>
<li><p>Uninsured person goes to Exchange, fills out application for insurance and for subsidy, including a statement of household income.</p></li>
<li><p>The application is reviewed. If the person’s income falls at below 133% of the federal poverty line, the Exchange forwards paperwork to Medicaid office, and person is enrolled in Medicaid.</p></li>
<li><p>If income is between 133%-400% of poverty line, the person qualifies for a subsidy. Their insurance premium will be set at a maximum level relative to their income (no more than 9.5% of the annual income for an individual), and the insurance company will receive a subsidy on behalf of that person for the balance.</p></li>
<li><p>When the person files their income tax the following year, their tax forms will now include some sort of statement about their insurance – based on income level, they will be entitled to a subsidy in a specific amount, which can be paid in the form of a tax credit, with all payments made during the previous year subtracted from that payment. If their income is higher than anticipated, they may owe back the excess subsidy amount in the form of higher taxes. If their income is lower, or if they did not get the full benefit of their subsidies, they may have a credit coming in the amount of whatever subsidy they are entitled to less the amounts already paid. </p></li>
</ol>
<p>It is a separate credit from earned income credit – but it is possible that a person can be entitled to both. And yes, that could come in the form of a check from IRS. </p>
<p>However, the person has to be purchasing insurance from the exchange to get the subsidy. </p>
<p>The uninsured will have a tax penalty of $95 for the first year, rising in future years. </p>
<p>I’m not sure what is going to happen to the people with incomes under 133% of the federal poverty line in those states that do not offer them medicaid. The law was written with the assumption that all 50 states would expand medicaid, given the fact that the federal government was picking up most of the cost.</p>
??? I don’t know what your looking at, but the subsidies don’t go away until around $45K +. (That’s why I personally am uncertain about my own eligibility for subsidies). If you make $44K, then the maximum you can pay out for insurance is 9.5% of your income - or about $348/month. At the $29K level, I think it may be a lower percentage, but at 9.5% it would be around $230/month.</p>
<p>OK – found the information I was looking for, here are the percentages by income level:</p>
<p>up to 150% of poverty line: 4%
150-200%: 5.3%
200-250%: 8.05%
250-400%: 9.5%</p>
<p>So that $29K earner will be paying $230, whereas the $28K earner will be paying about $188 – so it’s not all that big a differential.</p>
<p>Yes, but.
Where we see the max percentages, p 8-9, it says: The following table outlines the max contribution, as a percentage of income, you are responsible for toward the cost of your monthly premium, depending where you fall in the FPL scale.</p>
<p>But then, page 16: 60 y.o., 45k, most affordable bronze $466/month. Most affordable silver $576. For each, “Federal Govt $0.”</p>
<p>I don’t see anywhere that they say, any max % changes with age or etc. Hope you can clarify.</p>
<p>45K is the cut off when an individual no longer qualifies for subsidies. 45K is not the same as 29K – (post #758: “At 29k, the subsidies disappear”). </p>
<p>I’m even more confused now. So for a person well under the poverty level for <em>income</em> will be on Medicaid? </p>
<p>What if the person has very low income but substantial assets? My understanding of Medicaid (currently and in the past) is that you have to have very low assets in addition to low income to have Medicaid. Is that changing under ACA?</p>
<p>Thank you for the link, dstark. I know NJ is participating in Medicaid expansion. I just don’t have a clue what the criteria will be. I really think I need to stop thinking about this until October because there really aren’t answers to my questions yet.</p>
<p>I see that now and I think the brochure is printed wrong - look at page 8-9 –</p>
<p>“The premium assistance amount is based on the cost of the second-lowest Silver plan in an individual’s ZIP code. … the premium assistance will pay the gap between the full cost of the second-lowest Silver plan and an individual’s premium portion.”</p>
<p>It also shows that the maximum monthly portion that a person will be required to pay (assuming they opt for a plan that is at or below the second-lowest Silver plan) in the 250%-400% bracket is $364. </p>
<p>400% of Federal poverty level = $45,960 - so the cut off is actually closer to $46K.</p>
<p>If you go down to page 21, you’ll see rates for region 1. The second lowest Silver plan for 60 year old has an asterisk – it’s $676 – so the subsidy rates are calculated from there. That would mean that 60-year-old who is required to pay a “maximum” of $364 would qualify for a subsidy of $312. In that example, the person could end up paying more if she opted for the Kaiser Silver plan rather than Blue Shield or Anthem, because of the specific pricing in that area and age group – so if she wants Kaiser and wants the full subsidy, she’ll need to go with Bronze. On the other hand, if the person wants to buy more coverage – say, the Blue Shield Gold plan, then the monthly premium will be higher because the subsidies are keyed to the lower amount. </p>
<p>holy cow. So 2nd lowest is by provider? Not all the other biz about silver 70-73-87-94 benefit difference on page 5. and the whole layout of “statewide averages” is just…?</p>
<p>This is offensively clouded. All of us are smart and analytical and are stumbling here. </p>
<p>Re post #771: A lot of states already have laws on the book that restrict the amount of non-economic damages that can be awarded in medical malpractice cases.</p>
<p>Economic damages compensate for past and future wage loss and medical expenses.</p>
<p>If a person is uninsured or uninsurable, then “medical expenses” are generally the full cost of what the hospital has billed. </p>
<p>If a person is insured, then “medical expenses” are a fraction of that. (I recently had routine lab work done and the bill was about $700. The insurance company reduced that to about $100. I haven’t reached my deductible yet, so I have to pay the $100 – but obviously I received a $600 benefit simply from the value of my insurer’s contract with the testing lab).</p>
<p>If we had a system such as Canada’s – government paid health care for everyone – then the medical expenses that could form the basis for a lawsuit would be negligible, and the potential value of a malpractice awards would plummet. </p>
<p>We’re not there yet, but maybe with ACA, the past and future medical expenses for an individual will be limited to the annual patient maximums set under Obamacare, and awards will tend to go down accordingly. </p>
<p>That won’t have a big impact on overall health care costs, because as it is, medical malpractice claims only account for 2% of the costs – see [Malpractice</a> a Tiny Percentage of Health Care Costs](<a href=“Page Not Found | AAJ”>Page Not Found | AAJ), citing a CBO report – so a 25% reduction overall in malpractice costs might be reflected at a 0.5% savings within the health care system</p>
<p>Lookingforward – are you actually going to need to go to the Exchanges? </p>
<p>I’m asking because I have the sense that a lot of us already have insurance, so we probably aren’t going to be using the exchanges or getting subsidies anyway. I personally am worried about increased rates on my own plan, not because of Obamacare, but because of a looming birthday - but I’m happy now that I’ve talked to a rep from my insurance company and I know that I can do my comparison shopping after the first of the year. Plus, I decided that given my tax bracket, I’ll personally still be better off paying full premiums and then getting my subsidy, if any, in the form of a tax refund – I have enough discretionary funds available that I can manage. (At least I don’t have to stress out every year wondering what my kid’s financial aid award will look like, in the face of ever-rising tuition costs!) </p>
<p>Anyway – if it is important to you personally, then I think the best thing is to step back for awhile and see what is actually available as of October 1st, rather than relying on a brochure that reports a bunch of average premium figures. </p>
<p>If I have time I might do some calling around tomorrow to find out what the story is with those charts in the booklet. But I am drawing my knowledge about how it works largely from the law itself, not what the printed booklets or consumer web sites say. I was doing a whole bunch of digging to find an answer to my still unanswered questions about calculation of MAGI when adding the self-employed health insurance deduction into the mix. But once I shifted my thought process to “tax” instead of health insurance premium or subsidy… it all started to make a lot more sense to me. (It’s something the tax software companies will figure out for me – however confusing it is now, it is something that will be automatically calculated by software when I am filing in 2015.)</p>
<p>Complicated, not ready to explain, but this may be price advantageous.</p>
<p>There are references to MAGI on healthcare.gov and their links to IRS, but I just looked at my own state and there may (as you guessed) be deductions, as well. (It’s just worded offhand.) So we wait. </p>
<p>I’m grateful someone started this thread, that it was retitled to allow this long conversation- and that you dogged this one, calmom. Thank you.</p>
<p>The ACA exchanges may play a role in the Detroit bankruptcy. There’s talk of dropping coverage for young retirees–those under 65 who do not qualify for Medicare–and putting them on the exchanges, which would reduce Detroit’s obligations and shift the costs. Other strapped municipalities–Chicago is one–are thinking along similar lines. One problem is that if you flood the exchanges with 60 year olds the pool becomes less healthy and costly, which could raise premiums. </p>