Obamacare Subsidy Reconciliation

Kaiser explanation

Assuming Republicans fail and Obamacare goes into effect, people will have to start dealing with the reality of how it works.

A large swath of working people will be eligible for a substantial portion of their premium being paid as a tax credit at the end of the year when taxes are done. Let’s say you’re a family of 4 and your premium is $1,400 a month, but you’re eligible for a $1000 a month tax credit. It is unworkable that you would pay $1400 a month, and then get a refund of $12k in April 2015

So your insurance provider will be paid based on your estimated subsidy and then deduct that from your monthly bill, so you’ll get a bill for $400 a month during the year.

But your 2014 subsidy is based on your actual 2014 income, which you can’t possibly know until 2014 is over. That means as part of your 2014 tax return, you’ll have to figure up the actual credit you are entitled to and compare it to the amount your insurance company received during the year. If you had more income than you expected, you’ll have to pay back some (but not all!) of the subsidy you didn’t qualify for.

Let the fun begin!

So if I just retire again and have negative income, Obamacare will essentially pay me $660 a month to not work! Isn’t America wonderful?

“Everthing’s free in America”. John Galt

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12 Responses to Obamacare Subsidy Reconciliation

  1. CC1s121LrBGT says:

    How bout telling your boss to shove that pay raise he offered, or you will have to quit.

    A $460 BEFORE TAXES raise will cost you $7830 AFTER TAXES

    from: http://blogs.investors.com/capitalhill/index.php/home/35-politicsinvesting/2154-cbo-confirms-obamacare-discourages-work

    * At 400% of the poverty level, or $46,000, an individual would get $7,830 in premium subsidies.

    * And at 401% of the poverty level, an individual would get no government support.

  2. HPaws says:

    This minuet between individualists (good) and collectivist controllers (evil) has to come to a head soon. Probably NOT because any 21 century reproductions of the minute men but rather the government party (democrat) and bankers find nothing left to strip out of the economy and it finally gets noticed. Me and thee, like the cheese, stand alone – pockets turned out. Will Cruze, Palin, Beck and Limbaugh be able to convince the American people to handle this political and economic date-rape calmly. Who knows.

    • Art Stone says:

      Insurance is socialism.

      The problem with health care is not lack of insurance, but that low government reimbursement for Medicare and Medicaid (and lack of rules) forces hospitals to cost shift to people who are responsible adults with assets. Pass a law limiting medical charges to no more than 150% of what the hospital accepts from Medicare and I’m one happy camper. The only reason I pay the $660/mo extortion is to prevent the $40k bill for a kidney stone.

      • CC1s121LrBGT says:

        “Insurance is socialism.” Does it matter whether it is a product that one chooses to purchase versus a product that one has to pay for with no choice?

        I see a huge difference in an insurance company reimbursing policy holders for damages they incurred from superstorm Sandy versus Governor Christie using the money I was required to pay in taxes to reimburse people that chose to keep their money and not buy an insurance policy. The former does not strike me as socialist, whereas Governor Christie does.

      • prboylan says:

        Art wrote: “The only reason I pay the $660/mo extortion is to prevent the $40k bill for a kidney stone.”

        Been there, got the T-shirt. 🙂

        • Art Stone says:

          Fraud is rampant partly be because patients don’t see the detaiked bill, if at all. 4 years ago, when I had my hospital adventure – they needed to discharge me on Friday afternoon. They called up the physical therapy girl and summoned her to my ward. She instructed me to walk across the room and back and declared “he looks okay to me”. Never touched me, probably didn’t even read my chart. The PT department billed for 5 half hour sessions.

          • Art Stone says:

            One of the ironies of the ACA is it requires hospitals to convert to electronic records (my brother is a consultant in this and has been busy the last two years).

            Once all of the records are online, things the hospitals used to not charge for or things that were just a nuisance to bill for are easy to add to the bill now, so instead of creating savings, electronic records are increasing bills

          • Nidster says:

            Besides the bonus $$$ devoted to more and more fraud, all your medical records can be read by anyone with the right (or left) connections, and we can all be charged for breathing air in a medical facility, regardless whether we checked in, or were just visiting a friend.

  3. prboylan says:

    Not to worry. We’re simply in a transitional phase. Medical insurance in the U.S. is eventually going away, by design:


    • Art Stone says:

      I completely agree that is the end game.

      Once you have universal government coverage, everything becomes the government’s right to tell you what to do. Right away, we need to ban downhill snow skiing.

      • Nidster says:

        Well, all this analysis from us here in the ‘Peanut Gallery’, and all funnin’ aside, bottom line is this: America is running out of Real Money. So, make no mistake here, this is all about a grab for our money. Putting us into slavery and extracting our money for their purpose is essential. The end game with regard to the budget battle is for them is to grab as much of our money as possible.

        Questions remain, for what purpose do they need our money? and what is their ultimate purpose?

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