December 4, 2017

Monday Off-Topic (Moderated) Open Thread (120417)

Filed under: Lucid Links — Tom @ 1:00 pm

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

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  1. Middle-Class Earners Weigh Love And Money To Curb Obamacare Premiums
    December 4, 2017

    Anne Cornwell considered two drastic strategies in her quest to get affordable health insurance premiums last year for herself and her retired husband.

    One was divorce. Another was taking a 30 percent pay cut. She chose the latter.

    That maneuver slashed the Chattanooga, Tenn., couple’s premiums from exorbitant to economical. Instead of $2,100 a month — the amount she had been quoted for 2017 — their premiums are just $87 monthly, her lost income more than compensated for by qualifying for insurance subsides.

    Cornwell’s solution — completely legal — reflects how a growing number of Americans are incorporating strategies for affording health insurance into financial planning, adapting money and salaries to yield better choices — much as people place money into 401(k) plans to save for retirement while reducing their tax [...]

    Cornwell, 62, made $80,000 a year as a project manager for a small consulting firm that doesn’t offer health insurance. Her husband, Donald Donart, 63 and a cancer survivor, receives Social Security and a small pension, bringing their pretax household income to $92,000. [...]

    Four spreadsheets later, Cornwell asked her boss to reduce her hours by 30 percent, dropping her pay by $24,000 a year. She became a part-time hourly employee — at $56,000 a year. The couple now qualified for a $27,000 subsidy that made up for Cornwell’s lost income. [...]

    Cornwell went from paying tax on $24,000 a year to getting a taxpayer subsidy of $27,000 (non-taxable of course). That’s great tax planning for her, but taxpayers in general get stiffed. Let us say she is in the 15% tax bracket, the net tax difference is $30,600 ($27,000 + 15% of $24,000).

    I guess taking a tax payer and making them into a tax taker is a feature rather than a bug of the ACA.

    Footnote: This story also ran on The New York Times.

    Comment by Par for the Course — December 4, 2017 @ 3:03 pm

  2. Amazingly, not a word about the big-picture impact of a lot of people choosing this option. It’s all okey-dokey … NO. It’s symptomatic of perversely sinister law. UPDATE: Your net tax difference should also include FICA and Medicare, which take it to at least 30 percent, before we even get to state and local taxes or the negative multiplier effect of $24,000 not used to buy goods and services in the economy.

    Comment by Tom — December 4, 2017 @ 4:39 pm

  3. Third option was Health Share ministries. Hopefully, Trump will make good on associations doing the same thing as the Religious Ministries.

    Comment by dscott — December 6, 2017 @ 8:33 am

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