I finished 2017 scrambling to make ends meet... driving an Uber and working temp jobs when I could find them. When I applied for ACA coverage in November, I entered about $50k for projected income for the upcoming year and elected to take a bronze plan, basically to provide coverage for worst case scenarios where my health costs might be out of control.
Per the terms of the ACA, the government kicked in a subsidy to make monthly payments affordable (~$400). It did have a high copay and a $7000 individual deductible but the thought was, at least we were covered for catastrophic events.
As expected, it paid absolutely nothing throughout the year. My wife had a fine needle biopsy for $3k that was out of pocket. I had some pulmonary testing for sleep apnea for $4k that didn't qualify either. Aside from lower prices on prescription drugs, we got absolutely nothing back from insurance. Still, I could sleep at night knowing that if something really disastrous came up, we'd be covered.
By September of 2018, things were looking better and my temp job turned to full time at a much higher rate and my wife landed a job that didn't pay much but had a gold plated health plan. We dropped ACA coverage in September. My daughter started college and I had to withdraw cash from my IRA to cover costs and some additional to pay property taxes.
Bottom line, My year end income was about $90k, with most of the difference going to pay mortgage, tuition, property taxes and healthcare costs not covered by insurance.
When I did my taxes my accountant got an funny look on his face and told me that it looks like I now owe the government about $14.5k. That's even with mortgage interest at $11k, property taxes at $12k, and high withholding on both my and my wife's regular income.
Apparently, the additional income had pushed me into a bracket that no longer qualified for a government subsidy and I was now liable for the full cost of the health coverage ($1700 per month x 10).
When you sign up for ACA, they do tell you that if your income changes you'll need to report it... I completely understand that, but at the point where I started making more, I had also dropped the plan. Also, it was inconceivable to me that a plan that did so little could cost so much.
I don't think this was the intent of the plan. In retrospect, if in November, I'd reached out to healthcare.gov and adjusted my income projections, I think I would still have been liable for the subsidies paid to date.
I'm assuming my accountant is competent and that's actually what my real liability is. It does make me crazy trying to imagine what I might have done to manage things differently.
Any thoughts from the pros?
Submitted April 16, 2019 at 10:25AM by Nessuno54 http://bit.ly/2UG4cKn
