This is a story out of California that’s been making the rounds this weekend and definitely needs to be filed under, “Who could have possibly seen this coming?” Some of the people who managed the feat of getting through the dysfunctional web site and actually getting quotes on health care policies under Obamacare have already been finding out that “low priced” can mean something entirely different than they may have thought. This is particularly true of older citizens on fixed incomes. But if your income is low enough, you can just scratch off a lot of the cost of those premiums with a taxpayer funded subsidy, right? Sure… but what if your income is too high? Well, duh… you should make less money!
People whose 2014 income will be a little too high to get subsidized health insurance from Covered California next year should start thinking now about ways to lower it to increase their odds of getting the valuable tax subsidy.
“If they can adjust (their income), they should,” says Karen Pollitz, a senior fellow with the Kaiser Family Foundation. “It’s not cheating, it’s allowed.”
Under the Affordable Care Act, if your 2014 income is between 138 and 400 percent of poverty level for your household size, you can purchase health insurance on a state-run exchange (such as Covered California) and receive a federal tax subsidy to offset all or part of your premium.
This, er… “helpful” article offers one retired couple as an example of this phenomenon. In order to fall under the 400% of poverty level ceiling, they need to have a family income of less than $62,040.00, but they they’ll need to trim their income to qualify as they estimate they’ll take in around $64,000.00. So rather than rewarding them for planning ahead to do as well as they can in their retirement years, the system will push them to make less.
And why do they need to do this in the first place? Are they two of those “irresponsible people” we keep hearing about? No. They’ve had a bare bones Kaiser plan which costs them around $7,200 per year. But it doesn’t “qualify” under Obamacare because it doesn’t offer certain mandatory types of coverage… specifically maternity care, healthy child visits and coverage for dependents up to age 26. But these people are in their sixties and none of those things apply to them.
Welcome to the future, folks. And it’s already here.