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View Diary: Why is nobody talking about the OTHER Obamacare subsidy? (178 comments)

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  •  No. Premiums are not part of the OOP max (4+ / 0-)

    But premiums do count when figuring federal income taxes for the year you paid them. (States may vary on this for the purpose of state income taxes.)

    Starting next year you can deduct any medical expenses (dental, vision and hearing, too!) that exceed 10% of your AGI. Previously the amounts were deductible if you exceeded 7.5%.

    Except if you or your spouse are over 65, then until 2016 you can continue to deduct anything over 7.5% of your AGI.

    Out of pocket maximum comprises: your plan's deductible and co-pays or cost-sharing percentages. Despite the similarity of words, cost-sharing in this instance, means a  situation where instead of paying a set co-pay, you pay a percentage of a provider's bill Many plans have a mix of fixed co-pays for some services and a stated cost-sharing percentage for others.  


    •  And if you underestimate income (0+ / 0-)

      they don't increase your tax bill commensurately (you or others may have already mentioned this).

      •  Well, there is a penalty for underestimating your (0+ / 0-)

        income and  getting a subsidy for which you were not eligible.

        However, there is a cap on the amount you have to pay back for the subsidy benefits that you weren't entitled to.  The cap is $1,200 for two people or a family and $600 for one person.

        Note this applies to inadvertent underreporting (perhaps due a small raise, or something like that.)  Actual fraud in the reporting of your income is looked at quite differently.

        If your income changes (up or down) you should go to the Exchange where you bought your plan and report that change.  Your rates (including premiums, deductibles, co-pays, co-insurance percentages and OOP maxes) may change as result.  Actually, if you have a significant income change (up or down) it might be important to reconsider your choice of health insurance plan. You may change your plan (pick another one and cancel the first one) if you have change in eligibilty for a subsidy.  That's one of the events that can trigger a plan change, if you want.  

        I have no idea how this might affect things like a partially-satisfied annual deductible or OOP max.  Starting a new plan might re-set those numbers back to zero, which if you're well along the way to satisfying them might be significant loss.


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