ACA subsidy trap for people who increase their income

[HumblePie]

So, if someone accurately gauges their income for a family of four (= "Family A")and receives (say) a $500 a month subsidy, that's a good thing. But if someone underestimates their income for another family of four (= "Family B") for the coming year and receives an inflated subsidy of (say) $700 a month, when in fact their income is the same as for Family A, then when they are asked to repay the excess $2400 (so that their net subsidy is exactly the same as for Family A, as it should be), that's a BAD thing?

Honestly, you wingnuts get nuttier every day.

As far as updates go.. that is all grand and good, except when the system fails on "getting" your updates properly.

I am going through this with SSI for my wife. She was receiving it before we married and had several problems where she would inform them of income changes and they would "lose" that info. Despite us having signed and notarized copies of the receiving said info. They are still trying to put her on the hook for $3000+ in money they claim she owes, but we have proof she doesn't. Never under estimate a crappy government run program to make screw ups.

 

[Texashiker]

Yeah and maybe they change to self employed, don't realize that they're now responsible for paying taxes directly since it's not withheld, and come tax time won't have the money set aside because they spent it on other things.

Should I feel sorry for that person too?

People know they have to pay income tax.

This ACA is a new program. People probably do not know how it works. They just get on the healthcare.gov website, sign up, see the price and think how obama is doing a great thing.

Its a great thing until you get a better paying job and are hit with a big tax bill.

 

[Texashiker]

They are still trying to put her on the hook for $3000+ in money they claim she owes, but we have proof she doesn't. Never under estimate a crappy government run program to make screw ups.

I went through crap like that with the child support office.

Out of the blue one day the Texas child support office sent my employer a letter saying I owed something like $6,000 in back support. The papers ordered my employer to start taking extra money out of my pay check.

The child support office lost a court order lowering my payments. They were going off an old court order for almost a year after the new orders were signed,

It was probably 6 weeks before we got everything straight. I did not get a single penny of that money back.

So yea, its not like the government does not lose paperwork. They lost my revised child support orders for a year. I had to send them my copy, and then they had to get a current copy from the court to get everything straight.

They were like, oops, looks like you do not owe that $6k after all. Yea dumbass, that is what I told you over the phone.

 

[chucky2]

If you ever had your own individual health insurance policy everyday life already consisted of thinking about it.

Not following you...

 

[Gonad the Barbarian]

People know they have to pay income tax.

This ACA is a new program. People probably do not know how it works. They just get on the healthcare.gov website, sign up, see the price and think how obama is doing a great thing.

Its a great thing until you get a better paying job and are hit with a big tax bill.

The website was very explicit in that the current subsidy amount was an estimate based on the previous year's taxes and the final amount would be determined by the current year's taxes along with explicitly stating the potential of having to repay some of the subsidy back if your income changed. You even had the option of taking a lower monthly subsidy or opting out of one completely and instead having your remaining/total subsidy amount reimbursed to you when you filed that year's taxes.

 

[Exophase]

People know they have to pay income tax.

People know they have to pay income tax. But they may not know exactly how much, or that they'll be fined if they don't pay quarterly estimates. Should you feel sorry for them if they can't afford their taxes because they weren't properly prepared? Or should you expect that they make some effort to learn about this?

I agree with Matt1970, I don't see how this is different from collecting welfare after your employment changes. I guess you think that in this case people don't realize that their subsidy is based on their income, but would realize that for welfare checks. I guess they're just idiots who thought that they were entering that information into the website for no reason.

Maybe the government should flag it if they get a W4/withholdings from your employer that changes what you're eligible for (and maybe they already do, if so I wouldn't know), but it's still not an awful lot to ask that people are at least mildly cognizant of the terms under which they're receiving assistance.

 

[Texashiker]

The website was very explicit

When I go to mcdonalds, sonic, burger king or even jack in the box I am very explicit that I do not want onions on my cheeseburger.

You know what, if the burger flipper can not read "no onions", what makes you think they understand all the details on healthcare.gov? It is just two words "no onions" how hard is that? But you expect them to understand what a subsidy is?

If they had good reading skills they probably would not be working for minimum wage and would not need a subsidy.

I order a coke but get dr. pepper. Is that a sign of someone who has good reading skills?

 

[senseamp]

First world problems in full effect.
How is this different with underestimating your income, not deducting enough, and having to pay taxes next April? It seems like Republicans are for the first time noticing things that have been around forever, but are all of the sudden a "problem" because of Obamacare.
It's funny how they never noticed real problems with health care system before Obamacare, and now they are noticing imaginary problems with Obamacare.

 

[Atomic Playboy]

When I go to mcdonalds, sonic, burger king or even jack in the box I am very explicit that I do not want onions on my cheeseburger.

You know what, if the burger flipper can not read "no onions", what makes you think they understand all the details on healthcare.gov? It is just two words "no onions" how hard is that? But you expect them to understand what a subsidy is?

If they had good reading skills they probably would not be working for minimum wage and would not need a subsidy.

I order a coke but get dr. pepper. Is that a sign of someone who has good reading skills?

Well shit, if that's your example, then poor people shouldn't have to pay taxes at all. I mean, after all, the tax code is very long and complicated, and if they can't figure out what "no onions" means, surely they can't be expected to understand the inner workings of US tax law... And, while we're at it, most statutes are written in a legal vernacular that is very difficult for someone who has trouble deciphering the message "no onions" to comprehend. Why should these poor ignorant fools be required to know that they aren't allowed to bowhunt squirrels on public school property during afternoon recess?

Whatever happened to "personal responsibility?" Isn't that the conservative mantra? Handle your business, lift yourself up by your bootstraps, succeed on your own merits, that's all well and good. But as soon as it comes to Obamacare, "IT'S NOT FAIR, STUPID PEOPLE ARE GOING TO SUFFER." I highly doubt that the guy who can't decipher the code "no onions" is going to be moving to some drastically higher paying position in the immediate future. Let's not get our panties in a twist wondering how he's going to afford all that accidental welfare fraud he may inadvertently end up committing.

 

[DrPizza]

Dear government. Please subsidize my insurance. I think I'm going to earn about 20k this year.

<end of year>

Woohooo! Score! I earned 100k, and got the government to pay for a lot of my insurance.

Government: "uhh, you've made a mistake on your income estimate..."


And, the OP thinks this is an issue??

 

[Bitek]

Who do you think the majority of democrat voters are? Wealthy liberals who have nothing better to do than push a social agenda and people on welfare.

The people wanted change, and all they are going to have now is spare change.

I am going to use a family I personally know as an example.

The husband works a full time job and makes ok money for around here.

The wife works at a local family owned restaurant.

Together they have two small children.

The wife is looking for a better paying job, but at this job she gets an ACA subsidy to help pay for her health insurance. I think she is paying something like $50 a month for health insurance?

What is a family who is barely getting by supposed to do if she finds a better paying job and has to pay back several thousand dollars? Their child tax credit would go to the government. No child tax credit means local businesses are not going to see that money around February and March of next year.

Having to pay back the subsidy is bad for low income families, but it is also going to have a negative impact on the local economy. Local businesses count on those income tax returns so people can buy a TV, pay down on a car, buy a new freezer or fridge,,,,. For a lot of low income families, earned income child tax credit is the one time of the year the family has extra cash.

Making the family pay ACA subsidy money back is going to have a very serious negative impact on the economy.

These people are seriously bitching about this? The ACA bought a poor family with children cheap health insurance, in the state with the largest amt of uninsured no less, for less than my "spousal surcharge" of my employer plan and they are pissed off about some hypothetical of making more money?! What ungrateful bastards.

Typically "life events" (job changes, babies, even moving) allow you to effectively redo open enrollment and make changes.

If the free money is such a burden, tell them to pay the minor fine and don't provide healthcare for thier children

 

[Texashiker]

And, the OP thinks this is an issue??

What I think is an issue are low income families who may not realize if one or the other (or both) parents take a better paying job they may lose their tax return.

To say someone may go from flipping burgers to making $100k is not very realistic.

What does happen is someone goes from flipping burgers for minimum wage to making $17 an hour working construction. With a $10 hour jump the family may lose that subsidy, what then? Construction jobs do not provide health insurance for the family. After all obama decided to postpone the corperate mandate.

Father / husband works a few months construction in a chemical plant then gets laid off. It happens all the time around here.

End of the year family finds out they owe the government money.

A lot of low income families depend on that tax return to buy stuff they would otherwise not be able to afford. Now there is a clause they may not be aware of that allows the government to take that return.

 

[Vic]

What I think is an issue are low income families who may not realize if one or the other (or both) parents take a better paying job they may lose their tax return.

To say someone may go from flipping burgers to making $100k is not very realistic.

What does happen is someone goes from flipping burgers for minimum wage to making $17 an hour working construction. With a $10 hour jump the family may lose that subsidy, what then? Construction jobs do not provide health insurance for the family. After all obama decided to postpone the corperate mandate.

Father / husband works a few months construction in a chemical plant then gets laid off. It happens all the time around here.

End of the year family finds out they owe the government money.

A lot of low income families depend on that tax return to buy stuff they would otherwise not be able to afford. Now there is a clause they may not be aware of that allows the government to take that return.

Because they already received it.

 

[shady28]

The Obamacare story isn't over, but I don't think this will be the main story as it won't play out for another year.

What's going to be interesting is to see how well people pay premiums.

We already know 10-20% of that 8 million didn't make their first month's payment.

We also know that 1/4 to 1/3 of the 8 million didn't have healthcare previously, meaning that 3/4 to 2/3 did have healthcare before and are now using Obamacare.

Taking those two facts together : If the number not paying premiums goes up to 30%, and 2/3+ already had healthcare, a 30% drop will make it a net sum zero game on the number of insured.

Except of course, there's a new tax aimed squarely at those without healthcare. In other words, the poor.

Amazing how that works isn't it?

 

[Gonad the Barbarian]

Someone actually poor can get a hardship exemption for the tax.

And because it's early and my snark isn't fully awake yet, someone teetering past the edge of the subsidy cutoff can open an IRA and use the deduction to drop their avg income back down into the subsidy range.

 

[manimal]

Dear government. Please subsidize my insurance. I think I'm going to earn about 20k this year.

<end of year>

Woohooo! Score! I earned 100k, and got the government to pay for a lot of my insurance.

Government: "uhh, you've made a mistake on your income estimate..."


And, the OP thinks this is an issue??

I don't understand why so many like op have such a hard time with logic and reading comprehension

 

[Texashiker]

I don't understand why so many like op have such a hard time with logic and reading comprehension

Did you read the thread? Maybe you have an issue with reading comprehension?

The ACA subsidies are supposed to help low income families. In the end, those subsidies are like cheese and a trap.

We are talking about people who can not follow simple instructions, such as no onions on that burger, or the customer ordered a coke but was given a dr. pepper.

These are people who either did not finish high school or barely finished high school. There is a reason why they are working minimum wage jobs, education and reading comprehension play a big role in their earning capability.

For some reason these people who can not advance past a minimum wage job are supposed to know the ins and outs of the ACA?

 

[Bitek]

So are you going to go tell your friends with the children that?
"Hey you are so stupid you can't follow simple instructions and if I had my way your children would have no healthcare. I mean that in the nicest possible way. I'm worried for your career development."

BTW, if this class of people are so stupid and incapable of performing the most menial of tasks, how are they getting better jobs and making more money?

 

[Atomic Playboy]

For some reason these people who can not advance past a minimum wage job are supposed to know the ins and outs of the ACA?

If these people can't advance past a minimum wage job, then they aren't in any danger of getting vastly more income than they estimated when signing up for health care, which was the entire point of your complaint.

 

[Daverino]

Breaking News!

People lose their unemployment benefits when the get a job!
Welfare recipients get less benefits when their income goes up!
People pay more in taxes the wealthier they become!

Film at 11:00!

 

[feralkid]

If these people can't advance past a minimum wage job, then they aren't in any danger of getting vastly more income than they estimated when signing up for health care, which was the entire point of your complaint.

"Please hold while the OP moves the goalposts one more time."






.

 

[kia75]

Are you really concerned that an unemployed women who gets a subsidy all years suddenly gets a job in December that pays $30,000 that month, therefore she has to pay back the $1000 subsidy?

Or are we talking about a women that makes $10 an hour getting a raise in July to $12 an hour, so she has to pay $100 back at the end of the year if she didn't report her raise correctly?

Either way, the amounts being talked about are so minuscule compared to their income that it's not something worth getting worked up about.

 

[senseamp]

These new criticisms of ACA are very telling, especially in comparison with the old ones. Before it was "death panels." That turned out to be BS. Then it was policy cancellations, but the so called "victims" kept being discovered to be better off under Obamacare. Now it's stupid people supposedly being "confused" about how the subsidies work. Looking forward to what's next.

 

[MixMasterTang]

Ahhh, another Texashiker. No matter how many different ways you explain it to him he'll never change his crazy hard headed stance.

 

[Fern]

Yeah, this has the potential to be a problem. Most people aren't very good at estimating their income for the future (next yr in this case).

The problem is the result of the 'corrective payment' (IDK what it's called) and the (new) increased premium both being lumped together and due in the same year. A double whammy in a single year. (There's also the possibility of additional and unexpected income taxes being due as well.) That can screw up their budget.

I expect that this is one part of Obamacare to be extended/ignored.

BTW: IIRC, there were numerous reports that the ACA 'assistors' were encouraging people to understate income to help enrollment. Also, there are limits on how much many will have to repay if they understated income. That could have an interesting effect on cost estimates.

Fern