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

CapCat

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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 SizeIncome Subsidy IncomeSubsidy
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.
 
So now employers won't be the only ones using PT jobs. I can see it now, sir I need fewer hours so I can have my free obamacare....to go with my obamaphone....with my obamaloan....and my obamagreencar....
 
...AFFORDABLE care act... HONEST politician... Oxymoron???
 
Lots of safety nets have these sort of problems. The smart thing to do would be to taper off the benefits more smoothly.

Of course, some of the whackos will see this as evidence we should remove the safety net entirely.

Fortunately, the "cliff" on the PPACA is high enough on the income scale to be more easily dealt with. Previous issues with Medicaid and some other safety nets sometimes had the "cliff" at outrageously low incomes. PPACA makes this better, one can slide down from Medicaid to subsidized insurance to less subsidized insurance and THEN to no subsidy. So let's not act like this is a problem created by Obamacare, it's a problem you think isn't sufficiently solved by it.

So now employers won't be the only ones using PT jobs. I can see it now, sir I need fewer hours so I can have my free obamacare....to go with my obamaphone....with my obamaloan....and my obamagreencar....

This problem already existed. What would you propose to solve it?
 
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So now employers won't be the only ones using PT jobs. I can see it now, sir I need fewer hours so I can have my free obamacare....to go with my obamaphone....with my obamaloan....and my obamagreencar....

Nah see, if you make enough to qualify for the free Obamacare you've made too much to qualify for the Obamaphone.

This problem already existed. What would you propose to solve it?

Gut the nets
 
The better solution would have been to increase the Medicare payroll deduction a couple of percent (to start) and include anyone denied private health insurance with a medicare supplement so they could obtain something. I don't think that would have taken 2000 pages, required a single IRS agent, or forced the middle class to endure big premium increases to make up for the insurance handed those insurance companies can't afford to serve.


Lots of safety nets have these sort of problems. The smart thing to do would be to taper off the benefits more smoothly.

Of course, some of the whackos will see this as evidence we should remove the safety net entirely.

Fortunately, the "cliff" on the PPACA is high enough on the income scale to be more easily dealt with. Previous issues with Medicaid and some other safety nets sometimes had the "cliff" at outrageously low incomes. PPACA makes this better, one can slide down from Medicaid to subsidized insurance to less subsidized insurance and THEN to no subsidy. So let's not act like this is a problem created by Obamacare, it's a problem you think isn't sufficiently solved by it.



This problem already existed. What would you propose to solve it?
 
PPACA makes this better, one can slide down from Medicaid to subsidized insurance to less subsidized insurance and THEN to no subsidy. So let's not act like this is a problem created by Obamacare, it's a problem you think isn't sufficiently solved by it.

You don't slide down from a subsidy to no subsidy, you fall down...hard.

The way they set this up is a total nightmare. Here's how it works,

- The insurance Exchanges in your state estimates the level of government subsidy you're entitled to, this is done after Oct 2013 for the year 2014. How they do that is a mystery, for 2014 they might use your 2012 tax returns, or your 2013 estimated return, or your estimated 2014 income.

- If your estimated income is below the 400% poverty level, you get a government subsidy paid monthly to the insurance company, your monthly premium bill is the difference between the total insurance premium and the subsidy amount.

- In 2015, you fill out your tax return for 2014. If your income is $1 or more over the 400% poverty point (because your wife got a job, you got a raise, your business did better than expected, etc.), you have to pay back the entire subsidy as part of your tax bill. For a couple age 50 this would be almost $10,000, for a couple age 60 this would be $13,000!

It's ridiculous that there's no smooth transition here. I've never seen an IRS tax schedule where making $1 over an arbitrary limit like 400% FPL will cause a $13,000 tax increase! This is got to be fixed or it's going to cause a lot of grief.
 
I am sure at $80k year, you can AFFORD $10k insurance.

Of course, how to you afford $10k insurance making $14k???????
 
You don't slide down from a subsidy to no subsidy, you fall down...hard.

The way they set this up is a total nightmare. Here's how it works,

- The insurance Exchanges in your state estimates the level of government subsidy you're entitled to, this is done after Oct 2013 for the year 2014. How they do that is a mystery, for 2014 they might use your 2012 tax returns, or your 2013 estimated return, or your estimated 2014 income.

- If your estimated income is below the 400% poverty level, you get a government subsidy paid monthly to the insurance company, your monthly premium bill is the difference between the total insurance premium and the subsidy amount.

- In 2015, you fill out your tax return for 2014. If your income is $1 or more over the 400% poverty point (because your wife got a job, you got a raise, your business did better than expected, etc.), you have to pay back the entire subsidy as part of your tax bill. For a couple age 50 this would be almost $10,000, for a couple age 60 this would be $13,000!

It's ridiculous that there's no smooth transition here. I've never seen an IRS tax schedule where making $1 over an arbitrary limit like 400% FPL will cause a $13,000 tax increase! This is got to be fixed or it's going to cause a lot of grief.


Facts to fix your GOP lies.
You use your 2012 and 2013 income.

"Tax credit" is not a normal tax credit. it is paid direct to insurer. You dont have to have the money first.

Tax Provisions in the Health Care Act
 
Facts to fix your GOP lies.
You use your 2012 and 2013 income.

"Tax credit" is not a normal tax credit. it is paid direct to insurer. You dont have to have the money first.

Tax Provisions in the Health Care Act

These are not GOP lies professor, these are the facts. Use this link to the Berkley insurance calculator to check the numbers below.

- As your above link 'Tax Provisions in the Health Care Act' indicates, your 2012 tax return is used to determine if you are eligible for 2014 insurance premium subsidies.

- Let's say you're a 60 yr old couple who made $58,000 in 2012 (383% FPL). At this point you're eliglble for 2014 subsidies.

Your insurance premium is $18,504 - this is 31% of your income
You receive a government subsidy of $12,966 which is paid directly to the insurance company
You pay the balance of $5508 - this is 9.5% of your income

- So the couple paid $5508 in insurance premiums in 2014 and the government paid the balance of $12,966.

- At the beginning of 2015, while collecting 2014 tax info, the couple finds out they actually made $61,000 (403% FPL) in 2014. They find that they have to pay back the government subsidies since they're over 400% FPL! They now owe the government an additional $12,996 on their tax return. Their insurance in 2014 now cost them $18,504, or 31% of their income!

These are the facts! Check them out if you don't beleive them.
 
These are not GOP lies professor, these are the facts. Use this link to the Berkley insurance calculator to check the numbers below.

- As your above link 'Tax Provisions in the Health Care Act' indicates, your 2012 tax return is used to determine if you are eligible for 2014 insurance premium subsidies.

- Let's say you're a 60 yr old couple who made $58,000 in 2012 (383% FPL). At this point you're eliglble for 2014 subsidies.

Your insurance premium is $18,504 - this is 31% of your income
You receive a government subsidy of $12,966 which is paid directly to the insurance company
You pay the balance of $5508 - this is 9.5% of your income

- So the couple paid $5508 in insurance premiums in 2014 and the government paid the balance of $12,966.

- At the beginning of 2015, while collecting 2014 tax info, the couple finds out they actually made $61,000 (403% FPL) in 2014. They find that they have to pay back the government subsidies since they're over 400% FPL! They now owe the government an additional $12,996 on their tax return. Their insurance in 2014 now cost them $18,504, or 31% of their income!

These are the facts! Check them out if you don't beleive them.

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

Liberal mentality in a nutshell, folks.

Give a **** about care being affordable? No.
Give a **** that insurance premiums can keep spiking? No.
Give a **** that citizens are now forced by law to purchase insurance whose cost keeps spiking? No.

A chance to arbitrarily **** over anybody with more money than them? YES PLEASE!
 
Liberal mentality in a nutshell, folks.

Give a **** about care being affordable? No.
Give a **** that insurance premiums can keep spiking? No.
Give a **** that citizens are now forced by law to purchase insurance whose cost keeps spiking? No.

A chance to arbitrarily **** over anybody with more money than them? YES PLEASE!

The cost of insurance is CAPPED at 2%- to 4% of pay for most people. (at least for the people- rich via the Gov will pay the rest. )
 
The cost of insurance is CAPPED at 2%- to 4% of pay for most people. (at least for the people- rich via the Gov will pay the rest. )

You mean for most of the lower income group supported by the middle class. Not for the 60 yr old couple who both have jobs making 30K each who live in the NYC or LA area and work hard to maintain a decent living, who are not rich by any stretch of the imagination, and who have to pay 31% of their income for health insurance because they are just over the arbitrary 400% limit. This subsidy structure of Obamacare is ****** up, I can only imagine how the rest of the program is going to turn out.
 
So now employers won't be the only ones using PT jobs. I can see it now, sir I need fewer hours so I can have my free obamacare....to go with my obamaphone....with my obamaloan....and my obamagreencar....

At least that would create more job opportunities for the unemployed.

Im not saying that is the best way though.

Libertarians like to talk a lot about "unintended consequenses", of course they forget that by the law of averages, about half of those unintended consequenses are going to be good, and sometimes they are not really unintended.
 
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So now employers won't be the only ones using PT jobs. I can see it now, sir I need fewer hours so I can have my free obamacare....to go with my obamaphone....with my obamaloan....and my obamagreencar....

Bush signed the free cell phone bill into law, and our gov actually started distributing these "obamaphones" before Obama took office.

Before I researched the history on obamaphones, I was outraged because that Obama is a damn socialist. After I discovered that they are really bushphones, then I realized that it is OK because after all, Bush is a good christian.
 
You mean for most of the lower income group supported by the middle class. Not for the 60 yr old couple who both have jobs making 30K each who live in the NYC or LA area and work hard to maintain a decent living, who are not rich by any stretch of the imagination, and who have to pay 31% of their income for health insurance because they are just over the arbitrary 400% limit. This subsidy structure of Obamacare is ****** up, I can only imagine how the rest of the program is going to turn out.

hey *****. $30 k is well under 400% of poverty! LMAO
 
hey *****. $30 k is well under 400% of poverty! LMAO

hey *****. $60 k is not, you use your joint income to determine if you're eligible for subsidies...read the law please before you reply...
 
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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 SizeIncome Subsidy IncomeSubsidy
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.

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. :(
 
These are not GOP lies professor, these are the facts. Use this link to the Berkley insurance calculator to check the numbers below.

- As your above link 'Tax Provisions in the Health Care Act' indicates, your 2012 tax return is used to determine if you are eligible for 2014 insurance premium subsidies.

- Let's say you're a 60 yr old couple who made $58,000 in 2012 (383% FPL). At this point you're eliglble for 2014 subsidies.

Your insurance premium is $18,504 - this is 31% of your income
You receive a government subsidy of $12,966 which is paid directly to the insurance company
You pay the balance of $5508 - this is 9.5% of your income

- So the couple paid $5508 in insurance premiums in 2014 and the government paid the balance of $12,966.

- At the beginning of 2015, while collecting 2014 tax info, the couple finds out they actually made $61,000 (403% FPL) in 2014. They find that they have to pay back the government subsidies since they're over 400% FPL! They now owe the government an additional $12,996 on their tax return. Their insurance in 2014 now cost them $18,504, or 31% of their income!

These are the facts! Check them out if you don't beleive them.

.... are you really anticipating that the people who bought the notion that Obamacare will reduce the deficit will be convinced by math?
 
These are not GOP lies professor, these are the facts. Use this link to the Berkley insurance calculator to check the numbers below.

- As your above link 'Tax Provisions in the Health Care Act' indicates, your 2012 tax return is used to determine if you are eligible for 2014 insurance premium subsidies.

- Let's say you're a 60 yr old couple who made $58,000 in 2012 (383% FPL). At this point you're eliglble for 2014 subsidies.

Your insurance premium is $18,504 - this is 31% of your income
You receive a government subsidy of $12,966 which is paid directly to the insurance company
You pay the balance of $5508 - this is 9.5% of your income

- So the couple paid $5508 in insurance premiums in 2014 and the government paid the balance of $12,966.

- At the beginning of 2015, while collecting 2014 tax info, the couple finds out they actually made $61,000 (403% FPL) in 2014. They find that they have to pay back the government subsidies since they're over 400% FPL! They now owe the government an additional $12,996 on their tax return. Their insurance in 2014 now cost them $18,504, or 31% of their income!

These are the facts! Check them out if you don't beleive them.

It can get even worse!!!!

Just change their premium to $610,000/year and they're paying %1000 of their income on insurance

Meanwhile, in the real word, the avg cost of insurance for a single person is $5,615 for single coverage. Double that, and you've got, 11,230 which is 18.4% of their income.
Employer Health Benefits 2012 Annual Survey | Section 1: Cost of Health Insurance

I think you'll see where you went off the rails if you just read the small print at that Berkeley calculator
 
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Meanwhile, in the real word, the avg cost of insurance for a single person is $5,615 for single coverage. Double that, and you've got, 11,230 which is 18.4% of their income.
Employer Health Benefits 2012 Annual Survey | Section 1: Cost of Health Insurance

I think you'll see where you went off the rails if you just read the small print at that Berkeley calculator

You can't multiply single coverage by 2 to get a married couple premium. Married couples are considered a 'family unit' with 2 or more members for insurance purposes, and they pay more than 2 singles. If you read your own "Employer Health Benefits 2012 Annual Survey" link, it shows an average family premium is $15,745 per year, and $16,356 for PPO plans. These are in 2012 dollars. If you adjust premiums for 2014, the premiums for a 60 yr old married couple making $61,000/yr are about 30% of their income, which agrees with the Berkeley Calculator.
 
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You can't multiply single coverage by 2 to get a married couple premium. Married couples are considered a 'family unit' with 2 or more members for insurance purposes, and they pay more than 2 singles. If you read your own "Employer Health Benefits 2012 Annual Survey" link, it shows an average family premium is $15,745 per year, and $16,356 for PPO plans. These are in 2012 dollars. If you adjust premiums for 2014, the premiums for a 60 yr old married couple making $61,000/yr are about 30% of their income, which agrees with the Berkeley Calculator.

While everything you say is correct, I assumed that they get their coverage through their employer and choose single coverage, possibly from different insurers, which would be the sensible thing to do
 
While everything you say is correct, I assumed that they get their coverage through their employer and choose single coverage, possibly from different insurers, which would be the sensible thing to do

Obamacare subsidies are for people without employer insurance or are self employed. These people are eligible to obtain insurance from the Obamacare Health Care Exchanges.
 
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