3 ms·

> What percentage of people with individual plans (who need to get new plans) would actually qualify for subsidies? I don't, so I have more options: (1) I can b

> What percentage of people with individual plans (who need to get new plans) would actually qualify for subsidies? I don't, so I have more options: (1) I can buy another individual plan from my insurer (2) I can shop other insurers or (3) I can buy from california exchange I don't understand why you're required to use the exchange to get the subsidies, anyway. Why not let people claim the subsidy directly through an insurer? Then turn healthcare.gov into a static site that simply displays the options and redirects to an insurer's web site. After all, the subsidies are only an estimate. The actual amount is only calculated on the 1040 tax return. So why should this be any different from tax withholding? We don't make everyone pay estimated taxes through a centralized site. We let employers withhold an estimated amount, and then the IRS balances the accounts annually, in a batch process.

hga 13y ago
Well, as I understand it the subsidies result in direct draws on the Federal fisc by the insurers, and the latter can't afford to wait till the next calendar year to get paid. And there's certainly a desire to avoid fraud given that schedule of payments, if I'm correct about it. Erk: if you're right about estimates and it depending on that years tax return; what do you do if you lose your job and can't afford to pay the unsubsidized rate? What if you earn a lot more money, spend too much of it, and then get hit with a huge bill next April 15th? I'm disabled and on Medicare so I haven't been looking into these fine details ... this all sounds unworkable to me at first glance, unless it's retrospective based on ... the last year's tax return, but, erk, can't do that either since that don't be doable before the mid-December deadline necessary to get you into a insurer's system. WTF??? ADDED: this probably explains why the Federal system has to do this, access to IRS payments data (e.g. withholding) is required, it's sensitive data and only they have all of it. Although Experian has a income verification role (people without credit, like sick young adults who can't leave the nest are at last count thoroughly screwed because the Federal site isn't handling this manual intervention well or at all), but I assume that's a double check. Maybe not? Maybe they couldn't get that info out of the IRS's generally high latency (often weeks and months, sometimes years) computer systems?
- tanzam75 13y ago
  > And there's certainly a desire to avoid fraud given that schedule of payments, if I'm correct about it. But why is it any different than the desire to avoid fraud through underwithholding of income tax? If someone files an in incorrect W-4 and underwithholds by $2000, then the Treasury is out $2000. If someone files a fraudulent insurance application and gets $2000 of unwarranted subsidy, then the Treasury is also out by $2000. It's the same $2000, whether the Treasury writes some checks to the insurance company, or fails to collect it from an individual on his paychecks. Either way, the $2000 gets paid back on the tax return -- or the IRS goes after you. > Erk: if you're right about estimates and it depending on that years tax return; what do you do if you lose your job and can't afford to pay the unsubsidized rate? What if you earn a lot more money, spend too much of it, and then get hit with a huge bill next April 15th? Again, not different in principle from income tax withholding. If you do not withhold the right amount, then you may get hit with a big bill or receive a big refund when you file your 1040. The main difference is that the subsidy does not automatically adjust. Withholding tends to automatically go up and down with income, because it's calculated by the employer on the paycheck. Whereas the insurance subsidy stays constant unless you make changes. If you lose your job, you're supposed to tell the exchange so that you can get a bigger subsidy. If your income goes up, you're supposed to tell the exchange so that you can get a smaller subsidy.
  - hga 13y ago
    The big difference in the first point is who collectible the debt is. Someone who underwithholds has to have that money in the first place to do so. Sure, they may have spent it, but it suggests an ability to earn money commemorate with the debt incurred. With insurance subsidies, scamming "insurance" companies can sign up nonexistant people etc. and collect those payments from the Treasury until someone catches on months or years down the road. Hence the need to reconcile everything in one central system. In the case of individuals committing fraud, many would do so simply because they can't pay the higher premiums now demanded of their subgroup (there's a lot of cost shifting), so you have more of a "can't get blood out of a stone", and the optics for the IRS are horrible. For your latter point, you're saying you make a 2013 enrollment based on partial 2012 data, and if you've got your act together you adjust with healthcare.gov or the linked state site as things change. Which I'm familiar with, the quarterly payments for those who don't withhold ... but I bet this'll hit a lot of people who aren't used to this sort of thing, but the automatic withholding of income that HR/ADT/whomever does for your paycheck....
wildgift 13y ago
I'm suspecting that there's a diversity of situations among the people in the individual market that would make this challenging. These are people who are self-employed, or have low wages, or irregular work.
- tanzam75 13y ago
  > I'm suspecting that there's a diversity of situations among the people in the individual market that would make this challenging. These are people who are self-employed, or have low wages, or irregular work. I'm afraid I don't follow. Why would self-employment or low wages make it more challenging to sign up directly rather than through an exchange? I'm not proposing any changes to the subsidies. Simply remove the requirement to go through an exchange to get the subsidy.
  - wildgift 13y ago
    I don't know how it would be done, but I can only see two scenarios. One is to charge the insured the full, unsubsidized premium, and give the tax credit in 2015. The other is to pay the subsidy to the insurance company throughout the year. In the former situation, some people just cannot afford it. In the latter situation, you can have some fraud (by the insurance companies). I guess they could offer both options, and if you choose the latter, you need to apply through the government, so they can verify that you exist, etc.
    - tanzam75 13y ago
      I'm not convinced that insurance fraud will actually be a big problem. Just do a random spot-check of all the policyholders that the insurance company is claiming a subsidy for. If the amount claimed is more than x% over the amount calculated by the government, then the insurance company gets cut off. Right now, by forcing people to buy on-exchange to get the subsidy, we're essentially doing the spot-check interactively. This is putting tremendous load on the healthcare.gov back-end. There's no reason this couldn't have been done as a batch process instead.

hga 13y ago

Well, as I understand it the subsidies result in direct draws on the Federal fisc by the insurers, and the latter can't afford to wait till the next calendar year to get paid. And there's certainly a desire to avoid fraud given that schedule of payments, if I'm correct about it. Erk: if you're right about estimates and it depending on that years tax return; what do you do if you lose your job and can't afford to pay the unsubsidized rate? What if you earn a lot more money, spend too much of it, and then get hit with a huge bill next April 15th? I'm disabled and on Medicare so I haven't been looking into these fine details ... this all sounds unworkable to me at first glance, unless it's retrospective based on ... the last year's tax return, but, erk, can't do that either since that don't be doable before the mid-December deadline necessary to get you into a insurer's system. WTF??? ADDED: this probably explains why the Federal system has to do this, access to IRS payments data (e.g. withholding) is required, it's sensitive data and only they have all of it. Although Experian has a income verification role (people without credit, like sick young adults who can't leave the nest are at last count thoroughly screwed because the Federal site isn't handling this manual intervention well or at all), but I assume that's a double check. Maybe not? Maybe they couldn't get that info out of the IRS's generally high latency (often weeks and months, sometimes years) computer systems?

tanzam75 13y ago
> And there's certainly a desire to avoid fraud given that schedule of payments, if I'm correct about it. But why is it any different than the desire to avoid fraud through underwithholding of income tax? If someone files an in incorrect W-4 and underwithholds by $2000, then the Treasury is out $2000. If someone files a fraudulent insurance application and gets $2000 of unwarranted subsidy, then the Treasury is also out by $2000. It's the same $2000, whether the Treasury writes some checks to the insurance company, or fails to collect it from an individual on his paychecks. Either way, the $2000 gets paid back on the tax return -- or the IRS goes after you. > Erk: if you're right about estimates and it depending on that years tax return; what do you do if you lose your job and can't afford to pay the unsubsidized rate? What if you earn a lot more money, spend too much of it, and then get hit with a huge bill next April 15th? Again, not different in principle from income tax withholding. If you do not withhold the right amount, then you may get hit with a big bill or receive a big refund when you file your 1040. The main difference is that the subsidy does not automatically adjust. Withholding tends to automatically go up and down with income, because it's calculated by the employer on the paycheck. Whereas the insurance subsidy stays constant unless you make changes. If you lose your job, you're supposed to tell the exchange so that you can get a bigger subsidy. If your income goes up, you're supposed to tell the exchange so that you can get a smaller subsidy.
- hga 13y ago
  The big difference in the first point is who collectible the debt is. Someone who underwithholds has to have that money in the first place to do so. Sure, they may have spent it, but it suggests an ability to earn money commemorate with the debt incurred. With insurance subsidies, scamming "insurance" companies can sign up nonexistant people etc. and collect those payments from the Treasury until someone catches on months or years down the road. Hence the need to reconcile everything in one central system. In the case of individuals committing fraud, many would do so simply because they can't pay the higher premiums now demanded of their subgroup (there's a lot of cost shifting), so you have more of a "can't get blood out of a stone", and the optics for the IRS are horrible. For your latter point, you're saying you make a 2013 enrollment based on partial 2012 data, and if you've got your act together you adjust with healthcare.gov or the linked state site as things change. Which I'm familiar with, the quarterly payments for those who don't withhold ... but I bet this'll hit a lot of people who aren't used to this sort of thing, but the automatic withholding of income that HR/ADT/whomever does for your paycheck....

wildgift 13y ago

I'm suspecting that there's a diversity of situations among the people in the individual market that would make this challenging. These are people who are self-employed, or have low wages, or irregular work.

tanzam75 13y ago
> I'm suspecting that there's a diversity of situations among the people in the individual market that would make this challenging. These are people who are self-employed, or have low wages, or irregular work. I'm afraid I don't follow. Why would self-employment or low wages make it more challenging to sign up directly rather than through an exchange? I'm not proposing any changes to the subsidies. Simply remove the requirement to go through an exchange to get the subsidy.
- wildgift 13y ago
  I don't know how it would be done, but I can only see two scenarios. One is to charge the insured the full, unsubsidized premium, and give the tax credit in 2015. The other is to pay the subsidy to the insurance company throughout the year. In the former situation, some people just cannot afford it. In the latter situation, you can have some fraud (by the insurance companies). I guess they could offer both options, and if you choose the latter, you need to apply through the government, so they can verify that you exist, etc.
  - tanzam75 13y ago
    I'm not convinced that insurance fraud will actually be a big problem. Just do a random spot-check of all the policyholders that the insurance company is claiming a subsidy for. If the amount claimed is more than x% over the amount calculated by the government, then the insurance company gets cut off. Right now, by forcing people to buy on-exchange to get the subsidy, we're essentially doing the spot-check interactively. This is putting tremendous load on the healthcare.gov back-end. There's no reason this couldn't have been done as a batch process instead.