Why all the confusion? It's so simple! Just use the Calculator linked below for STEP 1.
THIS IS FOR PEOPLE WHO ARE NOT COVERED BY EMPLOYER HEALTH INSURANCE.
Oddly, I find the names of the Health Exchange Insurance Plans being offered in the exchanges eerily similar to the Amway Multi-level marketing program, although there are no Rubys, Emeralds or Diamonds.
There are four types of plans.
Bronze, Silver, Gold, Platinum.
Bronze Plan pays 60% of medical expenses,
Silver Plans pay 70% of medical expenses
Gold 80%,
Platinum 90%
In order to make things a bit more complex, there will be several of each to choose from but (
only Silver Plans qualifies for cost-sharing subsidies)
There's an "In a nutshell" version of Obamacare here If you read through this Power Point presentation you will get the gist of ACA; however, I think it will also raise some questions.
THERE ARE TWO TYPES OF SUBSIDIES, both determined on the Silver Plan
1. Monthly tax credits or money that MAY be taken out of your paycheck and sent to you INSURER if you choose this option to help pay for the monthly premiums; and
2. A reduction in out-of-pocket expenses including reductions the annual deductible that has to be met BEFORE the insurance has to pay for anything. Click here and go to pages 13-14 for a summary.
The following address the TAX EXEMPTION SUBSIDY.
You have to fall within different levels of poverty to determine what subsidies you and/or your family will qualify for. Here's the chart of poverty levels for your reference (double click to enlarge)
You need a calculator to figure out what you will pay for your insurance premium after the tax exception. The following is for what is expected to be the most popular plan: The Silver Plan. This calculator tells you what your premium will be, less the tax exemption if any, and the balance you will owe for your premium. It will also pin point your level of poverty, if applicable.
As the medium income in America is under $26,500 a year, at least 50% of Americans qualify for subsidies.
Here's THE CALCULATOR
With the calculator, you can determine if you qualify for MEDICAID or the Health Exchange immediate tax credit to help pay your premiums.
The tax credit may be paid in advance by the federal government directly to plans on a monthly basis, starting at the point of enrollment. This means that people do not have to wait until their taxes are filed to receive the subsidy, nor do they have to pay any upfront costs for premiums.* However, applicants must choose to have the tax credit paid in advance.
What? So, the taxes will be deducted from you check and MAY be paid by the government (IRS?) directly to your insurer.
AGAIN, THIS IS JUST STEP ONE, so let's PLEASE try to stick to just this piece of the Obamacare Puzzle, The Tax Exemption Subsidy, to help others dropping in. Working together I think we can boil all this down to make it easy for people to anticipate their costs.
I will do STEP TWO this weekend.
Thanks.
Here are a couple of examples using the Berkeley Calculator beneath the orange SP monogram:
Single, no kids
The premium is $732/month or $8,784/yr (Silver Plan, 70% coverage)
Exemption is $569/mo or $6,828/yr.
Remaining premium is $163/mo or $1,956/yr
What is the tax liability for this single person? This is from the 1040 Schedule for 2013
$26,500 - $26,550 = $3,544 federal tax liability
So in this case, the Federal Government (IRS?) is going to pay an insurance company ALL the tax liability for this individual PLUS ANOTHER $3,284. This BEFORE factoring the other set of potential subsidies that will reduce this persons out-of-pocket expenses which, if there is a major event, will be A LOT because the Silver Plan only covers 70% of medical costs.
Well, that's one way to starve the government or, in Norquist's terms "Drown it in a bathtub"
Can anyone else see a problem with this?
Here's a Family of Four Scenario
I'll let you do the math.
Do enjoy the Calculator and charts to help you help yourself and others figure out Step One of anticipating your ACA Obamacare Expenses STARTING IN OCTOBER unless President Obama decides to give us an extention.
SOME QUESTIONS:
What if someone loses their job?
Or their adusted gross income (AGI) turns out to be different than the AGI for the previous year?
Who and how will that financial tangle be straightened out?
And, worst case scenario, what if an individual or family end up, in the following April, with an IRS payment they can't afford and have to go on a payment schedule?
If this happens a couple of years in a row, an individual or family could really be in deep straights paying back the IRS, as well as the premiums AND other health related costs.
Heaven Forbid, anyone on the Silver Plan is hospitalized for a rattle snake bite. Really America?
Part II tomorrow will cover the complexities of determining if the Federal Government will also help you pay for a portion of your deductibles and out-of-pocket expenses as well as that 30% THE SILVER PLAN DOESN'T COVER.
I can anticipate the shares for major health care providers to climb but, hey, the DOW is too crazy for anyone but quants to figure out. Check Congress members stock holdings.
SO, WHY ALL THE CONFUSION?
But what about the Gold and Platinum. If you are higher income, check them out.
Could it be the way the health exchanges are set up
and/or the complexities of figuring out subsidies
and/or how the subsidies will be paid
and/or whether or not you qualify for a subsidy
and/or the sinking feeling that you will choose the wrong plan BECAUSE you have to buy a cheaper plan and you worry you will end up in Bankruptcy Court anyway?
You think?
I still want the Single Payer Pony!