The 'Obamacare Cliff' - don't make over 400% of the poverty level!

cpwill said:

Worth noting is that this is equally a marriage penalty. Hooray, now we can start doing to our upper middle classes what we've already done to our lower classes.

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You're right, I forgot to mention the Obamacare Marriage Penalty! Yes, if you're a 55yr old single couple and make $31K each, you get a government subsidy of $4080/yr each towards your insurance premium. Don't get married though, if you do, with a combined income of $62K, you get $0 subsidy each. You've lost $8160/yr ($680 per month) in subsidies by getting married!

274ina said:

If they are that rich SCREW THEM! They can pay an ac****ant to figure it out FOR THEM.

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Since when is $60k a year, rich in the America?

CapCat said:

Be careful how much you make in 2014 if your looking for health insurance under Obamacare. The 'Obamacare Cliff' makes you ineligible for government subsidies if your income is greater than the 'Cliff' amount. Going over the Cliff means you will not get any government help in paying your insurance premiums under Obamacare.

The 'Cliff' occurs at the 400% Federal Poverty Level (FPL) income. This makes a person eligible (at 400%), or ineligible (above 400%), for a government insurance premium subsidy. Here's the subsidy amounts in 2012 dollars,

		Age 45-54
Family Size	Income	Subsidy	Income	Subsidy
1	$44,680	$1,440	$44,681	$0
2	$60,520	$9,672	$60,521	$0
3	$76,360	$8,172	$76,361	$0
4	$92,200	$6,660	$92,201	$0
5	$108,040	$5,160	$108,041	$0

]

If you're 46 yrs old with a family of 3, and make $76,360, the government will pay a $8,172 subsidy towards your health insurance premiums. If you make $76,361, the government pays $0! You just went over the Cliff!

If you want more details, see the Obamacare Cliff.

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I'm wondering something. A couple years ago, I had my hours cut and made so little that I was very close to being at the lowest tax bracket. I learned that it would have some tax benefits if my income that year had been a couple hundred less, so I opened a traditional IRA with a few hundred dollars. Would that work in this instance for someone who went just a little bit over 400% of the poverty level? Could they contribute to a traditional IRA to eliminate that extra $1 or $500 they made over 400% of the poverty level so they could get a little bit of a subsidy?

Sadly, I don't think I'll have to worry about making over 400% of the poverty level despite my bachelor's degree and job experience. In some ways that would be a nice problem to have...

Hell I wouldn't complain if my family of 4 made 92 thousand a year, hell I'd be happy if we made 29 thousand a year.

Your Star said:

Hell I wouldn't complain if my family of 4 made 92 thousand a year, hell I'd be happy if we made 29 thousand a year.

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Well that's nice, but pay attention to the cliffs here. I bet you would complain if your employer insisted on paying you $0.01 over the cliff nearest your family's income level, because you would be paying dramatically more money because of something completely arbitrary.

Stated another way, yeah at the surface level you "wouldn't complain if you made $92k/yr," but if making $92,000.01 per year suddenly caused you to have to pay $5,000 more for the same service you were getting as if you made two pennies less, you'd be stupid not to complain.