Californians May Lower Income to Qualify for Obamacare Subsidies

If you live in California, and you make more than $62,040, look out; you are ineligible for a federal tax subsidy to offset your skyrocketing premiums due to Obamacare. If you can lower your modified adjusted gross income to less than $62, 040, which is 400% of poverty level, you can qualify. This is going to profoundly affect older people, because insurers charge them more than they do for young people.

ObamaCare dictates that if your 2014 income is between 138 and 400% of poverty level for size of you and others covered with you, you can obtain a federal tax subsidy that will pay some or all of your premium. If your income is less than 138% of poverty level, you qualify for Medicaid (called MediCal in California.) But if you make more than 400% of poverty level, there’s trouble.

One example of the deleterious effect of Obamacare is Jacqueline Proctor and her husband, an early 60’s couple in San Francisco. Their current health insurance with Kaiser Permanente costs them $7,200 a year with a $5,000 per person annual deductible. But under Obamacare, Proctor says, "Kaiser told us the plan does not comply with Obamacare and the substitute will cost more than twice as much," about $15,000 per year. To make matters worse, even though the new plan has the same deductible, the much higher premiums cover factors unrelated to the Proctors, such as maternity care, (they’re in their 60’s) healthy child visits and coverage for any of their dependents until they are 26 (their son is 30.)

Proctor did the math; she found that their household income in 2014 will be $64,000, too much to qualify for the subsidy. If they lower their income, they could get a tax subsidy of $1,207 per month, saving them roughly $14,000 next year.

Karen Pollitz, a senior fellow at the Kaiser Family Foundation, said bluntly of those who make too much money to qualify for the federal subsidy, "If they can adjust (their income), they should. It's not cheating, it's allowed."


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