Early planning for ACA 2017

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susa
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Early planning for ACA 2017

Post by susa » Sat Aug 20, 2016 7:27 pm

Are there any practical steps to plan ahead for upcoming enrollment period for ACA 2017 ?

After reading this article, apparently Silver plan costs will increase, though not well understood precisely by how much.

http://kff.org/health-reform/issue-brie ... ketplaces/

In our personal case (FL and both over 60, no income), we typically strive for a Silver plan with small premiums but average annual deductible around 2000. We convert from IRA about 20,000 to Roth and report that as our income MAGI in the application process.

bberris
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Re: Early planning for ACA 2017

Post by bberris » Sat Aug 20, 2016 9:10 pm

Why not keep your income at the medicaid level? Then everything will be paid for, no premiums, no deductibles.
I really don't think a roth conversion is worth giving that up.

Zott
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Re: Early planning for ACA 2017

Post by Zott » Sat Aug 20, 2016 9:24 pm

bberris wrote:Why not keep your income at the medicaid level? Then everything will be paid for, no premiums, no deductibles.
I really don't think a roth conversion is worth giving that up.

Florida has not "expanded" Medicaid, so that is not an option here. Plus many would prefer to avoid the problems with Medicaid in any event.

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celia
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Re: Early planning for ACA 2017

Post by celia » Sat Aug 20, 2016 9:33 pm

bberris wrote:Why not keep your income at the medicaid level? Then everything will be paid for, no premiums, no deductibles.
I really don't think a roth conversion is worth giving that up.

ACA in California has a minimum and maximum income for eligibility. If under the minimum, you need to apply for Medicaid instead, if you want that as your medical insurance.

I would do a tax-free Roth conversion even if I didn't need insurance!
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

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susa
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Re: Early planning for ACA 2017

Post by susa » Sun Aug 21, 2016 7:23 am

bberris wrote:Why not keep your income at the medicaid level? Then everything will be paid for, no premiums, no deductibles.
I really don't think a roth conversion is worth giving that up.


As already explained, Medicaid is not an option in FL, plus we prefer to convert small amount every year from IRA to Roth as the conversion is tax-free due to no income (well, it becomes the only taxable event but is cancelled out due to amount of MFJ deductions).

But back to original question, anyone planning ahead for ACA 2017, what specific things do you look for or look out for at this stage ?

We calculated to keep the Roth coversion amount to this level in order to qualify for specific Silver plan(s) for 2016 and since we don't know precisely changes for 2017, may have to adjust it up or down based on what the MAGI is ending at (even small changes like 500.00 up or down resulted in many insurances we liked being listed or not listed in 2016)

SuzBanyan
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Re: Early planning for ACA 2017

Post by SuzBanyan » Sun Aug 21, 2016 9:00 am

susa wrote:
bberris wrote:Why not keep your income at the medicaid level? Then everything will be paid for, no premiums, no deductibles.
I really don't think a roth conversion is worth giving that up.


As already explained, Medicaid is not an option in FL, plus we prefer to convert small amount every year from IRA to Roth as the conversion is tax-free due to no income (well, it becomes the only taxable event but is cancelled out due to amount of MFJ deductions).

But back to original question, anyone planning ahead for ACA 2017, what specific things do you look for or look out for at this stage ?

We calculated to keep the Roth coversion amount to this level in order to qualify for specific Silver plan(s) for 2016 and since we don't know precisely changes for 2017, may have to adjust it up or down based on what the MAGI is ending at (even small changes like 500.00 up or down resulted in many insurances we liked being listed or not listed in 2016)


I was able to get information about preliminary rates for 2017 on a regional basis at the California ACA website. It was published in mid-July. It may be that similar information for Florida will be forthcoming soon. it seems like national trends are becoming less important when it comes to ACA.

DetroitRick
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Re: Early planning for ACA 2017

Post by DetroitRick » Sun Aug 21, 2016 11:16 am

We're in a somewhat similar position, ages 55 and 60, but with some income. We're spending down savings and doing partial Roth conversions (which I wanted to do anyway) to make the most of ACA. But we do have some income, which will rise next year as we start taxable IRA distributions for the first time. We target Silver Plans as well, which usually makes sense for most people receiving credits and especially for those who are under 250% Federal Poverty Level (due to the limitations there on out of pocket costs).

I just started our early planning, which more than anything amounts to cash flow and tax planning.

Here's our process:
1)Note the 2016 Federal Poverty Level guidelines that apply to you for 2017 ACA. These are now final and published. The "marginal tax rates" imposed by moving from the 150% FPL, 200% FPL and 250% FPL are significant. The Premium Tax Credit is more linear, but when you cross these thresholds you can experience sharp jumps in deductibles and out-of-pocket maxes. In planning for sourcing cash flow, savings versus income, I try to target a feasible range.
2)Try to ascertain what is happening your premiums next year in your specific metro area. Not only for your carrier, but for the target "2nd Lowest Silver Plan premium", which is a benchmark for your premium tax credit. In our case, this was pretty easy - local paper published details of regulatory submissions earlier this month, with reasons why regulatory approval was very likely. Your state website might have info for you.
3)Cash flow forecast for 2017. Figure out spending needs (net of known income) with the usual allowances for "unknowns".
4)Prepare rough tax projection for 2017, especially MAGI, to keep within desired range to the extent possible. We use Roth Conversion amounts as the biggest variable here. And now taxable IRA distributions will enter into our 2017 equation. I do the conversions early in the 4th quarter of every year, so I make up for estimation errors that way. Realized market gains and losses also contribute as needed.

3 and 4 are an iterative process where I look at different ways of funding until I arrive at a result I like.

It's not as big of a process as this may seem. It's actually getting to be a pretty routine spreadsheet exercise. But I do find myself now doing more tax planning than when, ironically, my income was many many times greater. And by the time open enrollment rolls around, I'm ready to just slot in my numbers. We actually spend way more time trying to stay healthy.

One area of complexity that many will experience relates to provider availability/participation in your area - especially for PPO and HMO plans. We have thus far lucked out there - no issues at all - but it is a huge issue in some regions.

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Watty
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Re: Early planning for ACA 2017

Post by Watty » Sun Aug 21, 2016 11:36 am

I have found that this web site has some good information upcoming changes at the state level by selecting your state here;

https://www.healthinsurance.org/states/

Then on the right side of the page click the link labeled "State Exchange".

For Georgia I get this web page

https://www.healthinsurance.org/georgia ... -exchange/

Which shows that several insurers will not be in Georgia next year and the rate increases for the remaining companies.

One thing to note is that you should also look at healthcare plans that are not available through healthcare.gov since there may be others, but you will not get a subsidy.

curmudgeon
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Re: Early planning for ACA 2017

Post by curmudgeon » Sun Aug 21, 2016 12:39 pm

It seems like there is really a two-sided dance to all this. On the one side are the intertwining of income, prices, and subsidies. The second half is the makeup of the specific plans themselves. I'm concerned that there is a "race to the bottom" going on in terms or provider networks (and therefor doctor and appointment availability) that is turning the ACA plans into medicaid-equivalents. Loss of competition as insurers exit the marketplace creates challenges as well.

The headline rate increases for specific insurance plans that you see in the news may be mitigated somewhat if you switch to a different lower cost plan, but do some research on what doctors are taking that plan (and will still do so next year), and how that will work for you. I personally find the medical insurance systems a royal pain to deal with, and I really dislike the prospect of having to change insurers and possibly doctors every year to try to keep the costs under control.

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Epsilon Delta
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Re: Early planning for ACA 2017

Post by Epsilon Delta » Sun Aug 21, 2016 2:53 pm

susa wrote:We calculated to keep the Roth coversion amount to this level in order to qualify for specific Silver plan(s) for 2016 and since we don't know precisely changes for 2017, may have to adjust it up or down based on what the MAGI is ending at (even small changes like 500.00 up or down resulted in many insurances we liked being listed or not listed in 2016)


Somethings wrong here. Perhaps it's a weird Florida thing.

Everybody, no matter what their income, employment status, or availability of employer health insurance should be able to buy any insurance offered on the exchange. The only limiting factor on what is offered should be residency. Your income will affect what you pay, but it should not affect what you can buy.

Have you set a filter that limits what's being displayed? If so clear it.

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susa
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Re: Early planning for ACA 2017

Post by susa » Sun Aug 21, 2016 5:51 pm

Epsilon Delta wrote:Your income will affect what you pay, but it should not affect what you can buy.
Have you set a filter that limits what's being displayed? If so clear it.


The point is, we do not ever have to pay (until we die) income tax from any tax deferred account. That is the way we planned it and keeping our MAGI under a certain amount also (in addition to no income tax paid from IRA or 401k) allows ACA subsidy under Silver plan plus we get a plan we actually like. While we certainly qualify for Bronze plan also, we like the combined subsidy plus cost sharing benefits we currently enjoy.

In reality, we do not use our plan provider at all, we have our own doctors and pay cash if and when we need it. The insurance is just there for catastrophic event plus to satisfy the IRS requirement.

fpr4
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Re: Early planning for ACA 2017

Post by fpr4 » Sun Aug 21, 2016 7:00 pm

Hoping to find a plan with a low enough premiums and deductibles so that I can plan on retiring before I am 80 (I am 33). Not looking good.

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susa
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Re: Early planning for ACA 2017

Post by susa » Mon Oct 03, 2016 6:46 am

We've set ready to apply in November for 2017. This years MAGI estimates came within ~600 so no real clawback projected for IRS as all federal taxes paid will be refunded.

jim234
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Re: Early planning for ACA 2017

Post by jim234 » Mon Oct 03, 2016 8:20 am

Even if premiums skyrocket the second lowest cost Silver plan should always be available at the following capped prices (after subsidy):

Up to 133% of FPL 2.04% of your income
133%-150% of FPL 3.06%-4.08% of your income
150%-200% of FPL 4.08%-6.43% of your income
200%-250% of FPL 6.43%-8.21% of your income
250%-300% of FPL 8.21%-9.69% of your income
300%-400% of FPL 9.69% of your income

In Florida you need at least 100% FPL to get any subsidy.

Katietsu
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Re: Early planning for ACA 2017

Post by Katietsu » Mon Oct 03, 2016 10:04 am

I agree with Epsilon Delta. Unless there is some strange FL quirk, your income should in no way affect the plans available to you. Your income should only affect your subsidy and co-payments/deductibles. So check for filters that need cleared.

JohnDoh
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Re: Early planning for ACA 2017

Post by JohnDoh » Mon Oct 03, 2016 10:05 am

curmudgeon wrote:It seems like there is really a two-sided dance to all this. On the one side are the intertwining of income, prices, and subsidies. The second half is the makeup of the specific plans themselves. I'm concerned that there is a "race to the bottom" going on in terms or provider networks (and therefor doctor and appointment availability) that is turning the ACA plans into medicaid-equivalents. Loss of competition as insurers exit the marketplace creates challenges as well.

The headline rate increases for specific insurance plans that you see in the news may be mitigated somewhat if you switch to a different lower cost plan, but do some research on what doctors are taking that plan (and will still do so next year), and how that will work for you. I personally find the medical insurance systems a royal pain to deal with, and I really dislike the prospect of having to change insurers and possibly doctors every year to try to keep the costs under control.


This.

The #1 city in our state has several big-name teaching/research medical centers, one of which we have long used. When we first joined ACA, these medical centers were "in-network" for several ACA plans, and we simply selected the plan which best suited us. Last year, however, only one plan had these medical centers "in-network" and we selected that plan (even though it was not an HSA plan, as our previous plans had been). From what I can tell, next year NONE of the plans will have these top-tier medical centers "in-network". Moreover, my understanding is that none of the plans have an out-of-pocket limit for "out-of-network" expenses.

We are thus going to be forced to change health care providers (which we suspect will mean "downgrading") to new "in-network" providers or expose ourselves to possible financial ruin by routinely going "out-of-network" (one of us has a serious pre-existing condition). Alternatively, we may have to move to a different state/city where the plans include top-tier medical centers in their ACA networks. (Anyone got any suggestions?)

Yikes! :oops:

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HueyLD
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Re: Early planning for ACA 2017

Post by HueyLD » Mon Oct 03, 2016 10:36 am

One can be forced to change his health care providers (physicians, hospitals, dentists, etc.) when his insurance changes due to a job change (voluntary or involuntary). The ACA Marketplace is no exception.

I once asked my dentist if he would become a network provider for my new employer provided dental plan. He refused and I had to reluctantly find a new dentist. It was a very sad feeling, but I didn't want to be stuck paying $$$$ out of pocket.

The alternatives are not pleasant, but that's the way our health care system works.

bberris
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Re: Early planning for ACA 2017

Post by bberris » Mon Oct 03, 2016 4:46 pm

Planning is very important if you want the subsidy. The marginal tax rate on dollar 64,081 is roughly 70,000 percent. That is not a typo. Having 1 $ over the ACA magi limit loses about 7,000 of subsidy. I'm not sure yet what the subsidy will be since rates haven't been published yet. But the unsubsidized insurance rates are going up 50 to 70 % this year in MN.
We will choose an HSA plan so we can use HSA contributions (and withdrawals if needed) to lower our MAGI.

munemaker
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Re: Early planning for ACA 2017

Post by munemaker » Mon Oct 03, 2016 5:13 pm

jim234 wrote:Even if premiums skyrocket the second lowest cost Silver plan should always be available at the following capped prices (after subsidy):

Up to 133% of FPL 2.04% of your income
133%-150% of FPL 3.06%-4.08% of your income
150%-200% of FPL 4.08%-6.43% of your income
200%-250% of FPL 6.43%-8.21% of your income
250%-300% of FPL 8.21%-9.69% of your income
300%-400% of FPL 9.69% of your income

In Florida you need at least 100% FPL to get any subsidy.


Someone mentioned Medicaid. I don't think that's a good option. A lot of providers don't take Medicaid, and there is a stigma attached to it. No thank you for us!

I will be retiring and new to ObamaCare in 2017. Fortunately I will have a lot of control of our 2017 MAGI. I spent a lot of time planning it out to be at 140% of FPL.

Everyone may not realize that it is not just the premiums that go down with MAGI in the 138% to 150% range. Deductibles, CoPays and OOP go way down as well if you can get into the 138% to 150% of FPL (PA has Medicaid expansion). In PA, when your MAGI drops below 138%, you are not eligible for ObamaCare and they push you to Medicaid.


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susa
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Re: Early planning for ACA 2017

Post by susa » Tue Oct 04, 2016 7:06 am

Helps us in that we will not have any income for 2017.

That is, other than making tIRA to Roth IRA conversions, which are reported as MAGI income but we plan on only converting under 20,000 so should easily qualify for a low cost premium with cost sharing Silver Plan.

Application process starting November 1 should allow us to simply logon to healthcare.gov and use the existing account to create a new application -- ? -- will have to see if anything has changed from 2016 process.

As to "choices in doctors", we simply used cash to see our own doctors (not in network, not accepting ACA plans, etc..) as any doctor we like is willing to take $100-140 cash for an office visit, write Rx for bloodwork and even advance the Rx so we don't have to make two(2) appointments (one for the initial office wellcare visit, the second for results from bloodwork). This way we already have the bloodwork done before we pop in to office for checkup. Yes, I understand we could have simply used ONLY the authorized ACA in network doctor but we only have the plan for major issue coverage and don't care for the ACA selected choices. Yes, we did do an annual wellcare visit to the ACA doctor also but did not disclose we had already done our Cash Only visit to our own doctors. Helps that we are healthy.

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