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Thread: Health Insurance Premium Increases

  1. #26
    Veteran Member Dominic.2's Avatar
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    Default Re: Health Insurance Premium Increases

    Quote Originally Posted by charlie61 View Post
    I think I might switch to an HSA plan this year.
    I have been in the habit lately (5 years or so) of asking what the bill to insurance and what the cash discount prices are various services I get. If I wasn't getting a significant employer contribution for my health plan, I might be on a HSA plan, too. A HSA keeps getting more attractive with each coming year. Outside of catastrophic coverage, I just don't feel like I am getting value for my dollars in insurance premiums (+deductibles +coinsurance) for my wife and me.

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    Default Re: Health Insurance Premium Increases

    Again there is no such thing as a free lunch. The ACA law had included little publicized provisions to transfer additional taxpayer money to health insurance companies beyond that paid to them in the form of monthly customer health insurance premiums and monthly gov't subsidies. Google Risk Corridor. The stated purpose of temporary Risk Corridor payments was because it was impossible for the health insurance companies to accurately predict the composition of their customer base. The speculative purpose of Risk Corridor payments was to allow the health insurance providers to quote public health exchange monthly insurance premiums that were lower than the actual costs of the health care those companies were committing to pay for, in an effort to create a perception that affordable health care was actually affordable. After a failed attempt in the US congress to extend Risk Corridor based transfers of additional taxpayer moneys directly to the insurance companies to cover their losses, the health insurance companies must now charge monthly premiums that are more in line with the actual costs of the customer health care they must pay for - or incur an outright financial loss. Thus the significant increase in quoted monthly premiums.

    In regard to the costs of ACA health insurance to customers, 2015 gross income will be taxed at a 2% rate for Americans who did not purchase ACA compliant health insurance coverage in 2015. For a typical dancer or camgirl earning $1000 per week, this will amount to an additional $1,040 of taxes due on this year's federal tax return.

    And for Americans who purchased ACA health insurance, but who also received taxpayer subsidy money to reduce the actual monthly premiums paid in 2015, thanks to the new insurance reporting tax forms there will now be a retroactive verification of eligibility for that subsidy money. For example, the actual monthly insurance premium cost for a young and healthy dancer or camgirl in a large metro area might be $450 per month. Depending on stated income level when they originally signed up for ACA health insurance, the monthly premium charged net of taxpayer subsidy money might have been $300, or $220, or $100 - with the amount of taxpayer subsidy money going up as stated income went down. However, this year, the IRS will cross-check actual reported income versus the stated income. If the actual reported income is higher than was stated, the IRS will add additional tax to the 2015 federal tax bill to recoup the taxpayer subsidies the person wasn't actually entitled to receive. For example if a dancer or camgirl had been paying $220 per month subsidized premiums based on a certain level of stated income, but turns out to only qualify for $300 per month subsidized premiums based on actual reported income, the IRS will add $960 that girl's total 2015 tax bill to recoup the excessive taxpayer subsidy money the girl's insurance provider had already received throughout 2015.

    Also, free Medicaid health insurance coverage may not turn out to be totally free either. Existing laws require that states attempt to recoup Medicaid benefit payments made on behalf of a recipient from that recipient's estate. This was an outgrowth of elderly Americans going into long term nursing home care, but apparently applies to all Medicaid recipients. This is no big deal if that recipient doesn't or won't ever have a significant estate or net worth. However it could be a very big deal if that Medicaid recipient later becomes financially successful, and winds up buying a house and accumulating other assets.

    Consider the following example. A dancer decides to report an annual income of $15,000 or whatever while she dances part time from say age 26 to age 30, and is steered into signing up for expanded Medicaid. For those 5 years she uses maybe $2000 per year worth of Medicaid benefits since she is young and healthy. So no big deal right ??? Wrong. Medicaid is expanding the use of capitation - assigning costs based on per-capita average benefit costs instead of the actual costs of particular services provided to particular Medicaid recipients. This means that the costs assigned may average out those $2000 in annual benefits for young, health Medicaid recipients with the $250,000 per year cost of providing AIDS drugs to other Medicaid recipients. Between capitation and additional costs like per-capita labor costs for Medicaid gov't employee salaries, it's possible that the young healthy dancer could be charged $10,000 per year for those five years.

    So what could happen from here ? Well, from age 30 to age 55, nothing. Say the young dancer starts a solid career, starts earning significant money, and receives either employer provided or ACA exchange health insurance from age 31 forward. She winds up buying a house, accumulating some savings and investments, etc., and forgets all about the 5 years worth of Medicaid benefits she received. But during the year she turns age 55, all of a sudden a $50,000 gov't lien appears on the deed to her house - maybe more if the state adds carried interest charges. Because of that lien, she can't sell the house unless that $50,000 Medicaid repayment is paid to the gov't. If that isn't possible, she can continue to live in that house until she dies - but at that point her heirs will be prevented from inheriting that house unless they make the $50,000 Medicaid repayment. In most cases, neither party can afford the $50,000 payment so the house is auctioned off with the state gov't seizing the first $50,000 of proceeds.

    Because of this possibility, many Americans are making a strong effort to raise their incomes to the point where they can avoid being steered to expanded Medicaid and instead become eligible for the first level of ACA public exchange health insurance. The subsidized premiums at the first level are well under $100 per month and there won't be any future attempts by state Medicaid dept's to recover money from the insured.

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