Posted on 12/03/2014 10:20:29 PM PST by grundle
Q. My husband gets health insurance at his job for $130 a month, but adding me to his plan would bring our total cost up to $415. We can’t afford this on an income of only $40,000 a year! Do we have any recourse
A. Grrrr, no. You are among several million victims of the infamous “family glitch” in the Affordable Care Act. And the most infuriating thing is that it didn’t have to be this way.
As we explained just the other day, you can’t get a tax credit to help pay for health insurance if you have the option of signing up for a plan that costs you less than 9.5 percent of your annual income. (This percentage rises to 9.56 percent in 2015.) That's considered an "affordable" plan.
If you are a single person, that’s where the story ends. But if you have a spouse or kids who also need insurance, there’s more—and for people like you, it’s a story with a bad ending. Here’s why.
According to the interpretation of the law by the Internal Revenue Service and Treasury Department, if a worker’s individual coverage is affordable, the entire family is considered to have “affordable” employer coverage—even if, as in your situation, adding a spouse or kids to the plan drives up the price way above the 9.5 percent threshold. Here’s an infographic we created that explains this glitch clearly.
I did the math on your situation. Your husband’s plan is clearly “affordable” because $130 a month works out to about 4 percent of your annual income. But adding you to the plan brings your total cost up to 12.5 percent of your income, which is ridiculous.
(Excerpt) Read more at finance.yahoo.com ...
Welcome to FR.
Pay attention to this post. It is no joke. This is what is happening to small business.
Those of you that don’t own your own business can armchair quarterback this and say “that sucks.”
But consider that we talk about issues all the time that mostly stay in the realm of politics or affect tax increases that we all somehow just absorb. Or things that only affect a tiny portion of the population that somehow figure out how to get by anyway.
The kind of jump described by the OP’s article and by the poster I’m replying to... you don’t just ABSORB that.
You potentially (read: most likely) drop your insurance or shop hard for something less expensive per month with deductibles so high you could never use it anyway.
It’s one thing to make that decision personally. It’s ENTIRELY another to make it when you are married and ENTIRELY another yet to make it for your children who can’t even fully comprehend that they are going to go without medical coverage for anything except the most catastrophic of situations. And that may still break the family’s finances before getting the deductibles paid.
Maybe, there isn’t going to be any medical coverage at all. Because the govt now mandates the bronze plans as being the lowest you can get. Which have hopelessly high deductibles and still cost a fortune per month when you have to buy them on the open market as a small business owner.
Think real hard on how many millions of actual small business owners, working citizens of the USA in the prime of their lives with families, are in the exact same boat.
This is a defining moment in our history. It’s bankrupting the backbone of our economy. Small business is always the largest input to any economy... no matter how big the big businesses get.
The reason people don’t talk openly about it more, is because it’s personal and private. The government knows that. All small business owners are facing this like a gun to the head.
This poster, as others I have seen, didn’t mention if they are going to pay the new rate or go without insurance. It isn’t our business to pry. Maybe they can afford the monumental increase and maybe they can not.
The important thing is to ask this question of yourself and your family: If YOUR insurance went from $360 to $920 per month tomorrow, could you afford to keep it?
Could you sacrifice enough other things to keep it?
What would those sacrifices have to be?
How much more can your finances withstand before you go broke? How much buffer is left in your income if any?
Hint: Most people don’t even dream of having $560 in savings or disposable income every month. You don’t just find that kind of money under a mattress or just “work harder” to make it appear. There are practical limits and we are passing them right now in this country. Right this minute. The consequences aren’t going to be “somewhere in the future.” For small business the damage is being done right this second.
Guess it goes without saying, they never provided such a report -- and they didn't publish my Letter.
I had fun writing it tho'. :)
Can you imagine - writing a piece on home defense methods and NOT mentioning firearms once? It was almost comical--almost..
Son started a new job. He took a huge pay cut when he left his seasonal job with no benefits. He just found out that his insurance will be 47.00 a paycheck. If he adds his wife and baby, it jumps to $400.00 a pay. That is most of his income!
Time to repeal the cursed failure of a ‘healthcare’ law!
not mentioned is that is for insurance, not for actual health care, which requires hundreds or thousands more in copays and deductibles
good post
As a seasonal paid EA tax preparer, a LARGE amount of my training is being devoted to the vagaries and special conditions of the ACA(s) and their tax implications. I predict that there will be stunned faces as the willfully and conditionally ignorant find the penalties kicking in on their EITC refunds. I am looking forward to seeing what the new IRS quote will be for the ‘average’ preparation time for 2014 taxes by the individual. Major problems will come from persons getting “MARKETPLACE” (Federal/State) subsidized insurance who have marriage/divorce/life-change events in 2014. These trigger amazing amounts of work to accommodate to the IRS regulations given the MONTHLY computations of the ACA regs!
I don’t see that Obamacare is Consumer Reports’ business. I might need to rethink my subscription. Mission creep.
That said, the spouse insurance in that case is only $275 a month. That is a good deal. The income is irrelevant. It should not be an entitlement.
I agree that Obamacare should be repealed. But in this case, what problem? It has long been common practice to give a cheaper rate to the employee only. The spouse rate is reasonable at $275. The fact that the government is involved at all is ABOMINABLE.
The day of a liberal begins with a glance at the New York Times with the Today Show playing in the background on the kitchen TV. Then on the way to work, they listen to NPR. When they get to work they gravitate toward other liberals who use conservatives as contrast to their superior liberal thinking (conservatives are hillbillies, you see). Then on the way home from work they listen to NPR (liberal things considered). Then they get home and turn on ABC/CBS/NBC/CNN and then the Daily Show for some entertainment. Maybe before going to bed they watch some TV crime show where the villain is an evil capitalist.
Next morning it all starts again.
Part of the problem in the past has been that people with total coverage abuse it. The go to the doctor for every little thing and up the cost for everyone else.
Also health care providers give cheap deals to some and gouge others.
High deductibles are good for reducing unnecessary visits, or at lease placing the cost where it belongs.
What is needed is the same pricing for everyone and full disclosure of that pricing BEFORE services are rendered so capitalism can work its magic on the industry.
Good post and right on the mark! Any possible defense of O-care is stopped cold by those simple facts.
Your situation mirrors ours almost exactly — self-employed, both in our 40’s, healthy and fit, no dependents, and the insurance costs were nearly identical. Since you’re both healthy, you should do what we did and buck the system (if you can).
We were fortunate to find a concierge doctor in our town, which was completely unexpected, and we also joined the Liberty healthshare program. The doctor is $125 a month for a couple, with unlimited visits, etc. We chose the top Liberty program for $299 a month per couple, which is 100% coverage up to $1M per incident. I don’t ever foresee either one of us using $1M in TOTAL healthcare in our lives, much less per incident.
Going this route only increased our monthly healthcare costs from (about) $385 to $424, instead of almost $900.
“Glitch?”
Not a glitch. A glitch is when an unexpected and unpreventable electrical failure occurs. This is a built-in provision of the law.
Great post. My husband and I own a small business. He just started Medicare last year, but I am on a private plan. For the second year in a row, my plan was cancelled. My premium for a “silver” level plan was slated to go up 60% - $480 to $740/month - just for me. We could cancel our cable TV and phone plans and it still wouldn’t make up that difference.
I had to step down to a “bronze” level plan with $6K deductible and it still cost $520 - more than the “silver” plan I had last year.
When is this going to stop? Is it going to go up 60% again next year?
I’m hopeful that there’s a silent majority out there who is getting terribly squeezed and will take it out on Democrats.
But I’m also fearful that the silent majority who pays their own way with healthcare will rise up and clamor for single payer. When people get desperate, they lose their sense of reason.
I have yet to hear of
ONE
instance of someone having a previous policy that now has a better one for less money.
They want free health care. That’s the ultimate plan. Make “affordable” care that people can’t afford so they scream for Single-Payer. .
Good God, that would bankrupt me. Mind if I ask what/who that 1500 covers?
I've joked -- for years -- that Consumer Reports is one of the few publications that's written by liberals but read by conservatives. One of my wife's ultra-lib friends bought a Fiat. Do you think she researched it beyond the TV ads (which are cute) before she signed on the dotted line? Of course not.
I treat the Consumer Reports editorial content like I treat Section 1 of the New York Times -- except that the New York Times is more useful for housebreaking puppies.
According to the Census Bureau (who we pay to gather such facts), the median household income in the US was $53,046. (I'll go out on a limb and guess that the median household income of the Obama advisers and lobbyists who wrote the "Affordable" Care Act was at least ten times that.)
If the Republicans have any sense at all, they will be pounding the fiasco of Obamacare 24/7 between now and November 8, 2016.
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