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Today the CBO estimated that over the next ten years Obamacare will cut the labor supply by 2.5 million workers -- 2.5 million Americans who are now in the position to tell the boss to "Take this job and shove it." since health care is no longer tied to having a job.

http://nbcpolitics.nbcnews.com/_news/2014/02/04/22570900-bud...

On the contentious issue of the effects of the Affordable Care Act, or Obamacare, the CBO estimated that Obamacare will cut the total number of hours worked by between 1.5 percent to 2 percent from 2017 to 2024.

“Workers will choose to supply less labor,” the report said, both because of new taxes imposed by the law and because of the benefits some people will receive – for example, with the expansion of Medicaid under the Affordable Care Act, millions of non-working people will get health coverage. The effect of the law will mean a decline of about 2.5 million full-time equivalent workers by 2024, the CBO estimated.

</snip>


intercst
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I can't tell you how many clients I've had over the years who were approaching retirement but chose to wait until 65 to actually retire so they could go straight to Medicare coverage. The fear of not being able to get health insurance on the private market kept them in the workforce past the time they could otherwise afford to retire.

With the elimination of pre-existing conditions from health coverage, those folks would be able to retire a couple years earlier knowing they could buy health insurance.

--Peter
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With the elimination of pre-existing conditions from health coverage

It is a more diverse population than just those that had pre-existing conditions. There are those (that are otherwise healthy) that will now game the system by managing their taxable income in order to squeeze out their biggest subsidy, even though (as you suggest) they have enough saved up to retire early.

I know many folks in that segment. I am helping one such couple move to their new retirement in a southern state. They booked as much taxable income last year so that they would qualify for a better subsidy this year and now get a big chunk of their income from capital gains and dividends instead of what would be employment or IRA withdrawals. I think they said their subsidy cuts their policy from just under $600 a month to about $112 a month.

Great solution for those that have the financial means to take advantage of such - more power to them. Not so great for the solvency of the program.
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Hawkwin writes,

now get a big chunk of their income from capital gains and dividends instead of what would be employment or IRA withdrawals. I think they said their subsidy cuts their policy from just under $600 a month to about $112 a month.

</snip>


It's better than that.

You could have $100 million in Berkshire Hathaway stock and it doesn't add one dollar to your Adjusted Gross Income.

You could qualify for Medicaid.

intercst
(Obamacare cut my premium from $765/mo to $201/month for a policy with better benefits.)
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There are those (that are otherwise healthy) that will now game the system by managing their taxable income in order to squeeze out their biggest subsidy ...

Every large system like this is subject to gaming. It's just the nature of systems.

I'd guess that something like 1/4 to maybe 1/3 of the tax code has been written simply to avoid some kind of gaming. The same thing will happen with health insurance. The problems will be discussed and those that Congress deems worth fixing (either from a financial perspective or a political perspective) will get fixed.

From a practical standpoint, I'll be advising a number of clients to consider making IRA contributions or setting up HSA accounts so as to reduce income and increase potential subsidies. I would be doing them a disservice NOT to discuss such things with them.

And don't forget the multi-year strategies. Perhaps an early retiree could take larger IRA withdrawals one year, forgoing the ACA subsidy that year, so they don't need an IRA withdrawal in the following year and qualify for a subsidy. (Gotta keep SEPP restrictions in mind as well, of course.) Or switch between traditional and Roth withdrawals to similarly manage income.

--Peter
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<I know many folks in that segment. I am helping one such couple move to their new retirement in a southern state. They booked as much taxable income last year so that they would qualify for a better subsidy this year and now get a big chunk of their income from capital gains and dividends instead of what would be employment or IRA withdrawals. I think they said their subsidy cuts their policy from just under $600 a month to about $112 a month.>

Speaking of this do you know where a person would find exactly what kind of income is or is not considered as such by the ACA? thanks...
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Speaking of this do you know where a person would find exactly what kind of income is or is not considered as such by the ACA? thanks...

It's pretty simple. Take AGI from your income tax return. (Bottom of page 1 of your 1040 assuming you're using the long form.) Add in non-taxable interest (typically muni bonds). Add in the non-taxed portion of Social Security benefits. And add in any foreign earned income exclusion.

--Peter
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Not the only place but one that provides a nice summary:

http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pd...
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ptheland:

{{{There are those (that are otherwise healthy) that will now game the system by managing their taxable income in order to squeeze out their biggest subsidy ...}}}

"Every large system like this is subject to gaming. It's just the nature of systems.

I'd guess that something like 1/4 to maybe 1/3 of the tax code has been written simply to avoid some kind of gaming."


That little? I would have thought well more than 50% or perhaps even 75%.

Regards, JAFO
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That little? I would have thought well more than 50% or perhaps even 75%.

Well, there is another sizable chunk of the IRC devoted to social engineering. I'd give that another 1/4 to 1/3. And we haven't even begun to talk about all of the obscure corners devoted to political favors.

But those are discussions for another board and another time.

--Peter
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Thanks, that is a good breakdown there but on dividends if you do not take cash because they are on DRIP instead are those counted as income? Or is that counted when the stock is sold? Always wondered about that.
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on dividends if you do not take cash because they are on DRIP instead are those counted as income?

Yes.

It's as if you got the cash and then bought additional shares with that cash.

--Peter
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With killer premiums and killer deductibles.
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With killer premiums and killer deductibles.
--------------------------------------------

Hmmm...the clients I've who have considered retiring early generally find the Obamacare premiums much lower and of course out of pocket costs are capped.

I worked with a client who had $20K+ in out of pocket medical costs AND she had insurance.

She shouldn't have gotten sick I guess...darn taker.
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... knowing they could buy health insurance.

Knowing they can buy health insurance and being able to afford the health insurance are two different things.

It is like finding out how expensive "free" health care is.

JLC
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JLC warns,

Knowing they can buy health insurance and being able to afford the health insurance are two different things.

It is like finding out how expensive "free" health care is.

</snip>


I think the most important thing when it comes to Obamacare is getting your information from a credible source. If the only thing you know about Obamacare is what you see on Fux News, you're likely leaving a lot of money on the table. Unless you're getting a pension of $45,000/yr or sitting on an investment portfolio well into the multi-millions, you should be able to arrange your affairs to get a significant subsidy.

I spent a lot of time actually going through the legislation and the IRS rules governing the refundable tax subsidies. Once the Supreme Court ruled favorably on the constitutionality of Obamacare in June 2012, I started to shift my investments away from dividend paying stocks and anything that forces me to realize a capital gain. For 2014, I hope to come in a few thousand dollars below the MAGI limit to get an Obamacare tax subsidy. My monthly health insurance premium dropped from $765/month to $201/month for a policy with better benefits. I have my much-derided "free colonoscopy" scheduled for the end of the month. Under my old plan with the big premium, a colonoscopy was a $4,000 out-of-pocket procedure.

Of course, your mileage may vary. But don't write Obamacare off until you've made a thorough investigation.

intercst
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If the only thing you know about Obamacare is what you see on Fux News, you're likely leaving a lot of money on the table.

Isn't that Faux News??

Strangely enough, some of the smartest people around are the poorest informed on the ACA. Namely, doctors. I believe we've heard from two of them in this thread already.

I needed to see to a urologist a couple of months ago. He was also very much down on "Obamacare." He said he wasn't going to accept their insurance. I asked him if he took Anthem Blue Cross. (I already knew the answer, as that was - and still is - my insurance, and I'd spoken to his billing person before scheduling the appointment.) He said yes.

Then I asked him how he could tell the difference between a private plan through Anthem and an Obamacare plan through Anthem. The silence was stunning.

--Peter
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I have my much-derided "free colonoscopy" scheduled for the end of the month. Under my old plan with the big premium, a colonoscopy was a $4,000 out-of-pocket procedure.

It's "free" if it's a "screening colonoscopy" and you haven't had one in the past ten years. If you have, say, a two millimeter inconsequential polyp removed it may or may not be free, depending on your insurance company.

As a quality measure, the powers that be are looking at polyp detection rates, which gives your colonoscopist a strong incentive to remove anything that looks even remotely polypoid. Many of those turn out to be nothing, but they still get billed. The experts are claiming that an average man at low risk has about a 30% chance of having a polyp, so the risk is substantial.

If you have a polyp removed, or, according to some "experts" have a relative who has had a polyp removed, the recommendation is to repeat the procedure in five years. The repeat procedure will not be "free." If you have three or more polyps, or one polyp greater than one centimeter, the recommendation is to repeat the procedure in three years.

I recently did a colonoscopy on a man who told me he did not want any polyps removed because his insurance company wasn't going to cover the procedure free of charge if he did.
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alchook writes,

<<I have my much-derided "free colonoscopy" scheduled for the end of the month. Under my old plan with the big premium, a colonoscopy was a $4,000 out-of-pocket procedure.>>

It's "free" if it's a "screening colonoscopy" and you haven't had one in the past ten years.

</snip>


Yes, I know. This is my first colonoscopy. My doctor has been bugging me to get one for the past 3 years. I told him I'd wait for Obamacare when it's "free".

I recently did a colonoscopy on a man who told me he did not want any polyps removed because his insurance company wasn't going to cover the procedure free of charge if he did.

Sounds like he's worried about a Bait & Switch Colonoscopy. I thought the Labor Dept fixed that?

http://boards.fool.com/wa-state-ends-bait-switch-colonoscopi...

intercst
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intercst wrote:
I told him I'd wait for Obamacare when it's "free".... Sounds like he's worried about a Bait & Switch Colonoscopy. I thought the Labor Dept fixed that?

Here's where I found information about insurance having to cover preventive screening colonoscopies even when polyp removal occurs (see Q5):
http://www.dol.gov/ebsa/faqs/faq-aca12.html

So I think this is just an insurance company scam, and has been ever since screening colonoscopies became free.

For a better understanding of the recommended screening risks and benefits, see here:
http://www.uspreventiveservicestaskforce.org/uspstf08/coloca...
Like all medical procedures, there are serious risks. It's rare, but a colonoscopy can kill you, so they carefully balance the benefits with the risks in making their recommendations. My opinion is that the most important way to mitigate the risks is to have a good doctor with lots of experience.

I also opted for no anesthesia, as there are risks of nasty side-effects and there is some evidence that doctors are more careful when you aren't drugged. No, it didn't hurt at all, it just felt weird. I didn't need any polyp removal, so I don't know how that would have felt.

And to drift back to retirement questions, I retired early only because I could get my own individual health insurance. I loved my job at Apple, but it was time for a change.

-IGU-
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I have my much-derided "free colonoscopy" scheduled for the end of the month. Under my old plan with the big premium, a colonoscopy was a $4,000 out-of-pocket procedure.

I wouldn't have waited for the free one but to each their own.

I had a screening when I was in my early 40s...family history, cost less than $1000. Scheduled me for another one three years later but I made the mistake of going to a hospital and paid over 3K WITH INSURANCE.

But I found a lower cost gastroenterology center and it cost 1200 USD.

Of course, your mileage may vary. But don't write Obamacare off until you've made a thorough investigation.

I don't know why doctors don't like Obamacare, they whined about Medicare and they make more money now than ever.

It was a Republican idea for crying out loud.
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I don't know why doctors don't like Obamacare

Easy.

They don't understand it.

A colleague of mine was complaining about Obamacare the other day. When I grilled him a bit he sheepishly admitted he'd only read about 1500 pages of it.
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Here's a Cliff Notes version by an MD.

http://www.forbes.com/sites/carolynmcclanahan/2012/08/17/a-c...

"... it is important for people understand the ACA is not “all good” or “all bad.” Maybe after people understand the law, they will implore our leaders to implement the good sections and clean up the rest."
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