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Senior Advisor

You need to think about lowering your income

Twilight zone. Obama helps those who do not wish to help themselves. Obama care penalizes those who work hard and are successful.



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.

If your income falls below 138 percent of poverty, you qualify for Medicaid, which provides no-cost health care to low-income people. In California, it's called Medi-Cal.

If your income is higher than 400 percent of poverty, you can purchase a policy on or off the exchange, but in either case, you won't get a subsidy and the policy must provide certain essential benefits that many low-cost individual policies lack today, such as maternity care.

For older people, getting below the 400 percent poverty limit could save many thousands of dollars per year.

Take, for example, Jacqueline Proctor of San Francisco. She and her husband are in their early 60s. They have been paying $7,200 a year for a bare-bones Kaiser Permanente health plan with a $5,000 per person annual deductible. "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, she says.

This new plan, Kaiser's cheapest offering for 2014, would consume about 25 percent of their after-tax income. The new plan still has a $5,000 deductible but provides coverage for things her current policy does not, such as maternity care, healthy child visits and coverage for dependents up to age 26. Proctor has no use for such coverage, since her son is 30.

Premiums are also going up for many people next year because insurers can no longer deny coverage to people with pre-existing conditions or impose lifetime coverage caps.

Getting the subsidy

To get a subsidy, the couple's modified adjusted gross income for 2014 income would need to fall below $62,040, which is 400 percent of poverty for a family of two. (For a single person, the cutoff is $45,960. For other size households, see

Proctor estimates that her 2014 household income will be $64,000, about $2,000 over the limit. If she and her husband could reduce their income to $62,000, they could get a tax subsidy of $1,207 per month to offset the purchase of health care on Covered California.

That would reduce the price of a Kaiser Permanente bronze-level plan, similar to the replacement policy she was quoted, to $94 per month from $1,302 per month. Instead of paying more than $15,000 per year, the couple would pay about $1,100.

They could reduce their premium to near zero by applying their subsidy to a bronze-level plan offered by the Chinese Community Health plan that costs only $1,057 per month.

For people in their early 60s, "it's a huge cliff," going from 401 to 400 percent of poverty, Pollitz says. That's because insurers can still charge older people more than younger ones.

For younger people, moving below the poverty threshold has a much smaller impact because their premiums are lower to start with.

5 Replies
Senior Advisor

Re: california is looking at the possibility

Of a state wide single payer system. With their huge population they will have  a large pool for shared risk. As for Oklahoma, nothing good will happen because the general population will vote against their own self interest. They actually think those boys in washington are working for them.

Veteran Advisor

Re: california is looking at the possibility

Isn't that place the sorriest nest of rightwing knowalls you ever saw??? I had a childhood friend who lives in Owasso who won't speak to me anymore because I wouldn't accept bush as my hero. He said he was sorry I was SO LOST and I told him to go play on I 40
Senior Contributor

Re: the fuhrer hates workers and loves leaches

of which his bloodlines come 

Pat C.  #1

Re: california is looking at the possibility

 I told him to go play on I 40


My, that was a very clever comeback. You must be very proud, surebutt.

Veteran Advisor

Re: california is looking at the possibility

They won't let me say "go **bleep** yourself!"