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John Fenner

RVer Insurance Exchange Health Insurance?

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On 9/4/2020 at 1:04 PM, Bill&Anneli said:

If your income turns out higher than you estimated, you may have to PAY BACK the tax credit to the IRS. I have seen folks owe as much as $18,000 to the IRS because they signed up for a $1,500/month plan, took the full tax credit and paid $0 premium per month. Only to be shocked when they filed their income tax return a year and half later (from when they signed up for that insurance), had higher income than they estimated and now have to pay all that money back to the IRS.

It wasn't that their income was higher than they had estimated--it's that their income was greater than or equal to 400% of the federal poverty line.  People whose income is greater than or equal to 400% of the federal poverty line aren't eligible for a subsidy.  If they claim/take a subsidy based on a claimed/estimated income and it turns out they weren't eligible for the subsidy when they file their income tax return used in the reconciliation calculations, the government will make them pay back all of the subsidy they weren't eligible for.  That must be what happened to the people you're thinking of, if they had to pay $18,000, and that's the only situation where someone will have to pay back all of their subsidy--filing an income tax return that has a modified adjusted gross income that exceeds the limit for qualifying for a subsidy.

Claiming/taking a subsidy that's more than what you end up being eligible for does have repayment requirements, but it's just the difference between what you claimed/took and what you were actually eligible for based on the income tax return used for reconciliation.  And actually, that's what the person who ends up not qualifying for a subsidy is paying--the difference between the subsidy they received and the subsidy they were entitled to (which in their case is zero), which means they pay back the entire subsidy.

 

On 9/4/2020 at 1:04 PM, Bill&Anneli said:

There does not seem to be any PPO plans in the ACA network - all HMO, so geographically limited.

Just for clarity of terminology, there is no ACA network. 

And there can be PPO or EPO plans that are geographically limited.  They are PPO or EPO in that you don't have to have a referral from a primary care doctor to see a specialist, but their network of providers is limited to a specific area.

 

On 9/4/2020 at 1:04 PM, Bill&Anneli said:

I agree, this whole insurance thing is time consuming, frustrating, complicated and there are way too many people out there just selling stuff they don't fully understand.

I agree that some of them don't fully understand what they're selling, which is obviously not acceptable.  But there appear to be plenty who know full well what they're selling but don't tell the buyer everything they know, which is also unacceptable.

 

On 9/5/2020 at 1:10 AM, Zulu said:
On 9/4/2020 at 1:04 PM, Bill&Anneli said:

We went thru the Costco website to find an ACA provider - they were really helpful and knowleagble about what we would qualify for etc.

I'd recommend HealthSherpa.

If someone is interested only in ACA plans on the exchange, then HealthSherpa or Healthcare.gov is the way to go.  However, if someone isn't eligible for a subsidy, the Costco site might have a lead on other providers.  For example, I used an Austin zip code and found plans by a company called Decent.  They are not eligible for a subsidy, and they don't have a nationwide network, but they do exist, and I'd never heard of them.

Now, I have no idea why the Costco insurance site includes the Decent plans.  Probably because they have a financial arrangement, which means there are probably plans out there that Costco insurance site doesn't include. 

And I have to say that I'm not impressed with the Costco site.  In the FAQs, it says that there are penalties if a person doesn't have health insurance.  I question everything on the site if they don't get that right.  Then again, it's in their interest for people to believe they have to buy insurance.  So either it's sloppy website maintenance (which doesn't make me trust what's on the rest of the site--how do I know that haven't updated other parts, either?), or it's intentionally misleading (possibly disguised as sloppy website maintenance), which also doesn't make me trust what's on the rest of the site.

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On 9/4/2020 at 2:04 PM, Bill&Anneli said:

 

If your income turns out higher than you estimated, you may have to PAY BACK the tax credit to the IRS. I have seen folks owe as much as $18,000 to the IRS because they signed up for a $1,500/month plan, took the full tax credit and paid $0 premium per month. Only to be shocked when they filed their income tax return a year and half later (from when they signed up for that insurance), had higher income than they estimated and now have to pay all that money back to the IRS.

 

That's exactly what happened to me...at the front end of the 2018 calendar year, my  projected income looked to be $xx,xxx  so I signed up for an Obamacare $x,xxx premium credit but then later in the year something happened...some money (not a lot but enough to push me up the ladder a bit) came my way that was fully taxable, and propped up my AGI, to an amount that for a single person, was like the game on Price is Right: "THAT'S TOO MUCH!"...

After the back half of 2018 had cleared, I ended up having to pay it all back, PLUS the income tax owed. I'm not by any stretch a well-off person, so having to dip into my IRA and write a check for about $15,000...oh that HURT. And of course then I had to claim THAT withdrawal as income for 2019!

Worst thing about it is, I never made even ONE claim on that insurance plan, it was an awful plan and had a VERY high deductible. It was basically worthless. 

But you had to have something or they hit you with a fine or a fee or a penalty or whatever they called it.

My income has now stabilized (it appears) and I am on a better plan now (it appears) and hopefully, my tax burden this time around will be much lower. 

BTW I'm learning some things here..thanks to all the active posters but especially Blues and Zulu and Bill&Anelli...sometimes the opinions differ but the information is still valuable. 

On a side note, the domain squatter wants almost $295,000 now for insurancebenefits dot com. Holy hell I'm in the wrong business.

 

 

 

Edited by podwerkz

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6 hours ago, podwerkz said:

That's exactly what happened to me...at the front end of the 2018 calendar year, my  projected income looked to be $xx,xxx  so I signed up for an Obamacare $x,xxx premium credit but then later in the year something happened...some money (not a lot but enough to push me up the ladder a bit) came my way that was fully taxable, and propped up my AGI, to an amount that for a single person, was like the game on Price is Right: "THAT'S TOO MUCH!"...

Sounds like you went up the ladder and over the cliff.  The subsidy cliff is real, and real dangerous.

I don't have that problem, but I've thought about it.  One option is to not take any premium tax credit (subsidy) in advance, and instead pay the premiums yourself and get the tax credit applied and refunded (if you're eligible) when you file your income tax return.  That way the only surprise at tax time will be a pleasant one.

The problem is that without the subsidy, an ACA plan can be really expensive, and it's possible a person wouldn't want that policy if he has to pay 100% of the premium.  He might choose a less expensive option that provides less coverage and isn't eligible for a subsidy, but at least he knows all the numbers (premium and coverage) in advance, and they're not going to change. 

It's a real dilemma.  Kind of makes you want to jump off a cliff, and I don't mean the subsidy cliff.  But pick the cliff carefully because you don't want to survive it, or you'll wish you had bought better insurance.

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On 9/4/2020 at 2:04 PM, Bill&Anneli said:

We went thru the Costco website to find an ACA provider - they were really helpful and knowleagble about what we would qualify for etc. Didn't try to sell us anything, directed us to the website, to type in the info so we could narrow it down to what we qualify for etc. Then we could click on the plans, read the fine print to learn about the things that are of importance to us. After we were educated we could call back and ask specific questions, help signing up etc. This took weeks for us. Here is the link.  https://www.cbcins.com/

Remember, the income/subsidy thing for the ACA plans is a bit tricky and VERY important. - If you apply for insurance for 2021, you have to estimate your income for 2021. The exact amount of income on which your eligibility for the tax credit is based is not determined until you file your 2021income tax return (which you would do usually spring 2022). Say you take the tax credit. THEN, when you file your 2021 income tax return (usually in April 2022) - you will know if you either qualify for more of a credit than you got (ie your income turned out lower than estimated) THEN you get a tax refund, or the refund is applied to whatever you otherwise might owe the IRS for past years.

If your income turns out higher than you estimated, you may have to PAY BACK the tax credit to the IRS. I have seen folks owe as much as $18,000 to the IRS because they signed up for a $1,500/month plan, took the full tax credit and paid $0 premium per month. Only to be shocked when they filed their income tax return a year and half later (from when they signed up for that insurance), had higher income than they estimated and now have to pay all that money back to the IRS.

So estimate your income very carefully, err on the conservative side (ie estimate high), because you will eventually get all the credit to which you are entitled when you file your income tax return. I think its better to get money back from the IRS than to owe them money.... Ofcourse best is to estimate exactly right - but who has a perfect crystal ball. 

IF your circumstances change during the year after you sign up for the market place insurance and tax credit - NOTIFY the exchange immediately of your change in income so they can adjust your tax credit accordingly in the middle of the year. One example is if you cash in Retirement funds (IRA, 401K etc) - that is INCOME that counts for this purpose. This could wipe out your eligibility for the tax credit. So consult your tax professional about this!

There does not seem to be any PPO plans in the ACA network - all HMO, so geographically limited. We are healthy, and think maybe an HMO would work for us if we plan once a year trip to Texas, schedule our regular medical etc then. And supplement with a Skymed type plan (that flies you "home" in an emergency). The HMO plans we looked at do cover out of area true medial emergency, and then all follow up  treatment etc needs to be in the HMO area. This probably only works for people who don't go to the doctor often and are willing to pay for some office visits out of the area out of pocket if needed. This option gives us peace of mind that if we have a major medial event we are covered (albeit we have to go to Texas, we probably wouldn't do much traveling anyway if we had a major medical event like stroke, heart attack etc). And we have the option of paying out of pocket for minor things if we don't feel like driving all the way to Texas for a simple doctors office visit.

Now, maternity care is a totally different situation, you need regular appointments, and I for one, would prefer the same doctor to care for me thru pregnancy and deliver the baby.... so would think long and hard about traveling full time without ability to go see that one doctor. But we're all different.

Also, we found that the Fixed Indemnity plan thru RVer exchange specifically excludes maternity care, so you want to ask for that stuff in detail before signing up- they may have supplemental stuff  they could sell you for that. We spoke to John Fitzpatrick at the RV exchange, he was very helpful, sent detail/fine print etc so we could answer specific questions we had. 

I agree, this whole insurance thing is time consuming, frustrating, complicated and there are way too many people out there just selling stuff they don't fully understand. Take the time to research this and educate yourself, I don't know of any shortcuts. Good luck !

Thank you for posting, we are right there with you thinking the same thing. 

In our case we re-estimated our income for 2020 and found we will be over the cut off limit for a subsidy. Don't forget to add the stimulus money the gov sent you to your income for 2020. So for Nov, Dec we would have to pay full rate for health insurance @ $1500-2000 / month.  Wife retires Oct 6, health coverage ends Oct 31.

Now the Wife's COBRA through her former employer is actually lower @  $ 1000-1100 / month. So we will go with her former employer COBRA plan for Nov, Dec. Then for 2021 our estimated income will be basically cut in half so we would quality for a subsidy. We will plan and estimate very carefully but I'll pick up medicare in July when I turn 65. 

Even when you think you have somewhat of a handle on this health care subject, you still feel like there are monsters hiding under your bed!

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On 9/8/2020 at 8:50 AM, Steven@146 said:

In our case we re-estimated our income for 2020 and found we will be over the cut off limit for a subsidy. Don't forget to add the stimulus money the gov sent you to your income for 2020.

The COVID stimulus isn't included in modified adjusted gross income (MAGI) for purposes of qualifying for or calculating subsidies.  The healthcare.gov site has a MAGI section here .  There's a list of types of income and whether they're included in MAGI, and "Economic Impact/Stimulus Payments (come from the IRS as a result of the COVID-19 emergency)" says "no."

And just for the sake of completeness--regular unemployment benefits are included in MAGI, as are the supplemental COVID unemployment benefits (the $600/week extra, and any more of that type that gets approved).

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No, the Economic Impact Payment is not includible in your gross income.  Therefore, you will not include the Payment in your taxable income on your Federal income tax return or pay income tax on your Payment. It will not reduce your refund or increase the amount you owe when you file your 2020 Federal income tax return.

A Payment also will not affect your income for purposes of determining eligibility for federal government assistance or benefit programs.

As always, it's best to consult your tax professional or the IRS website directly for details....

https://www.irs.gov/newsroom/economic-impact-payment-information-center-reconciling-on-your-2020-tax-return

 

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