Pitfalls and Subsidies While Signing Up for Affordable Care Act Coverage

While we were planning for early retirement, health insurance was the scariest unknown variable in the plan.  This was in the dark ages before the Affordable Care Act’s premium subsidies and guaranteed coverage.  Back then, I budgeted $1,000 per month when family premiums were $500 per month simply because I expected insurance costs to go up significantly and to account for the chance that someone in the family might end up in the state’s high risk pool with insane premiums.

In 2014, the Affordable Care Act (also known as Obamacare) proved to be the golden ticket for many hopeful early retirees.  Pre-existing conditions no longer mean you are uninsurable.  If you make less than 400% of the poverty level (400% of FPL = $113,760 for our family of five) you’ll also qualify for subsidies to help pay for health insurance.

Because Mrs. Root of Good retired early two weeks ago, our family health insurance coverage provided by her employer ends on the last day of February.  In this article I’ll outline how we applied for health insurance coverage on the healthcare.gov marketplace including the pitfalls along the way and how we secured subsidies that will pay for 88% of our health insurance.


Getting insurance and subsidies through Healthcare.gov

In general, to qualify for subsidies to help pay your insurance premiums, you have to apply for coverage through healthcare.gov, the government’s health insurance marketplace.  Similar to employer provided health insurance, the healthcare.gov marketplace requires all applicants to apply during the open enrollment period.  For coverage for a particular year, the open enrollment period usually runs from November 1 of the previous year to January 31 of the year of coverage.

To apply for coverage outside of that window, you must have a qualifying event.  The most relevant qualifying event for those entering early retirement is the loss of employer provided health insurance, though marrying, divorcing, having a baby, and moving to a new state also qualify as a life event that triggers a special enrollment period for marketplace coverage.

If you’re losing health insurance coverage then you can apply for coverage through the marketplace up to 60 days before losing coverage.

In our case, our last day of employer provided coverage is February 29.  Once we were within that 60 day window, I applied on January 4 to obtain coverage for the five of us.

The initial results of the January 4 application were not spectacular.  Healthcare.gov said the adults were not eligible for subsidies and the kids were probably eligible for Medicaid or NC Health Choice and therefore not eligible for subsidies.  Not exactly the results we were expecting.  We were within the 60 day period of losing health insurance coverage and should have been able to sign up for subsidies for the adults.

I called the customer service number provided in our determination of eligibility.  After calling and chatting for 30 minutes, the representative couldn’t figure out what was going on and I had to suggest I should try calling after Mrs. RoG actually leaves work and update the application at that point.  The rep said that sounded like a good plan.  Can you tell I was unimpressed with the healthcare.gov call center staff?

At this point I assume I screwed up some data entry on the healthcare.gov application page (it’s quite lengthy – plan on 30 minutes to 1 hour to complete the whole thing).  Some of the questions about current coverage and loss of coverage aren’t very clear.


Healthcare.gov Application, round 2

Fast forward to February 5, 2016.  Mrs. RoG is no longer working.  I logged on to healthcare.gov and deleted the initial application from January 4, 2016.  Then I filed a new application stating the insurance coverage is ending 2/29/2016 and that we won’t have coverage beyond that point.  I also stated that Mrs. RoG had zero income (because she is no longer working).

For early retirees, it’s tricky answering the questions about income during the year to get your subsidies estimated correctly.  On my application, I listed as income for the year:

  • $20,000 self employment income
  • $12,000 retirement income (this would be Roth IRA conversions)
  • $10,000 investment income (dividends and interest)

I was shocked that the marketplace didn’t ask for any verification of income since this is a very atypical income profile for a 35 year old.  When I applied the first time around in January the subsidy eligibility results stated I would have to submit additional info regarding income.  Not so on application round 2.

I have no clue if that’s what my income will actually look like in 2016 but I expect to craft the income stream to be around $42,000.  If I have less self employment income from the blog, I’ll convert more to Roth and take some cap gains from my taxable account.  If I have more SE income, I’ll convert less to Roth and live off that higher SE income.

After submitting the application, I received a $200 per month subsidy for me only, with Mrs. RoG and two kids being eligible for the special enrollment period (to enroll in the Exchange coverage mid-year), but with no subsidies.  The Exchange determined that the youngest kid (age 3) was not eligible for the exchange coverage but “may be eligible for Medicaid”.

I knew the eligibility for subsidies was flawed but couldn’t figure out why since I couldn’t find a way to review my application or update any erroneous answers.

I called the Exchange hotline again.  Wow, these people sound like $9 per hour robots that are essentially flesh and blood embodiments of the automated Healthcare.gov application form.  When I ask the rep “why aren’t we all eligible for premium subsidies?” there is zero thinking or analysis taking place.  My options were to delete the old application and start a new one on the phone, enter a life event (change of circumstances) on the phone, or go online and pursue either of those paths on my own.

I chose the route of entering a life event on the phone, even though nothing had happened in the 15 minutes between applying online and working my way to a live (and possibly sentient) human representative.  The rep guided me through the laborious and tedious process of answering all the questions I was asked online in presumably the exact same way.

Boom!  Different outcome.

Mrs. RoG, the two oldest kids, and I are all eligible for an Exchange policy with a $909 monthly subsidy, reducing the monthly premium to $125 for a $0 deductible gold plated silver plan with 94% cost sharing subsidies (more on Affordable Care Act subsidies).  For some odd reason, the three year old was once again “maybe eligible for Medicaid” but not exchange coverage or premium subsidies.


I couldn’t get an answer out of the rep as to why two kids would qualify for Exchange coverage and one would be dumped into Medicaid.  Maybe it’s because he’s under a certain age?

The rep suggested I apply directly to North Carolina’s Health Choice (medicaid for kids) to expedite the process for our three year old.  If he’s deemed ineligible then he can get coverage and subsidies through the Exchange (after we enter another Life Event in the system).  Since the medical and dental coverage is slightly more comprehensive under NC’s Health Choice plan, I applied for coverage for all three children.

Eleven days after applying for coverage at healthcare.gov, we received our brand new UnitedHealthcare insurance cards in the mail.  Effective date for coverage is March 1, 2016.  We get to keep all our old doctors.

The application process eventually worked.  At least for four of us.  I’ll get into what we’ll do for the three year old further down since he doesn’t currently have any insurance as of March 1.


Medicaid Vs. Marketplace Exchange Subsidies

Eligibility for premium subsidies through the Marketplace Exchange hinge in part on whether there is “minimum essential coverage” available elsewhere through an employer plan or medicaid, for example.  If minimum essential coverage is available somewhere else (even if you didn’t and can’t sign up for it now), you are normally ineligible for premium subsidies through the Exchange.

I was worried that I would take the big fat subsidies from the Exchange for the two kids and then have to repay them when I file taxes for 2016 because they are eligible for medicaid in our state (kids are eligible below a certain income level; adults aren’t generally eligible here in our wonderful non-medicaid expansion state).  Remember, if you’re eligible for medicaid, then you have access to minimum essential coverage and therefore aren’t eligible for premium tax credits.

Fortunately I found this juicy nugget buried on page four of the Form 8962 Instructions that basically says I’m safe to take the premium tax credits for the kids’ Marketplace Exchange insurance because the Marketplace determined they were ineligible for medicaid/CHIP.

“However, if a Marketplace made a determination that you or a family member were ineligible for Medicaid or CHIP for certain months (for example, you were approved for APTC for those months), the individual is considered ineligible for Medicaid or CHIP for those months, even if your actual 2015 income suggests that the individual may have been eligible for Medicaid or CHIP”

~ IRS Instructions for Form 8962, Premium Tax Credit, 2015 version, Page 4

We were approved for the advanced premium tax credits at least for now, so we won’t have them clawed back on Form 8962.  That is, unless or until the kids are determined to be eligible for the medicaid/CHIP program, at which point they will presumably lose their eligibility for subsidies through the Marketplace.  I guess I’ll have to file another Life Event in that situation.


Back up plan: COBRA Coverage

Our sweet little three year old doesn’t have any health insurance coverage past February 29.  That would normally be a scary situation, since if something serious happened to him on March 1, it could put a huge dent in our early retirement stash.  We might have a lot of money, but we can’t take a half million dollar hit if he ends up in the hospital for a prolonged stay.  Health insurance isn’t about health at this point, but rather about protecting our assets.

Hopefully we can push along the Medicaid/NC Health Choice application and get him covered under the state’s health insurance plan for children before his current insurance expires on February 29.

If not, we’ll rely on plan B: COBRA coverage.  But we won’t apply for it right away.  We have two months after the employer provided coverage expires to apply for COBRA coverage.  We can call up the COBRA folks on April 30 and get health insurance for our little guy.  And it’s retroactive.

This means we can wait and see if he has any ridiculously expensive medical needs during March and April before deciding whether to get COBRA coverage for those two months.  Gotta love the kind of insurance that lets you see whether you need it in hindsight before deciding to pay for it.

The hope is that by April 30, our three year old will have coverage through NC Health Choice.  That will allow almost three months from the time we initially applied for Medicaid/NC Health Choice to review and approve our application.  Even an inefficient government bureaucracy should be able to handle a routine application for health insurance in under three months, right?

Through the COBRA paperwork, I see that insurance coverage for one person is $257 per month.  If we had to follow plan B and apply for COBRA insurance for the little guy, the ten months of coverage from March to December would be $2,570.

The downside of going with COBRA coverage is that he would no longer be eligible for ACA subsidies for the rest of the year even if we dropped COBRA coverage.  We could reapply for Medicaid/NC Health Choice for him (which he should qualify for), but he couldn’t get subsidies through the healthcare.gov marketplace until next year.

Updated on 5/14/2016: Exactly three months after applying for Medicaid/NC Health Choice for our youngest, he was accepted for coverage retroactive to February 1.  We were in limbo during May 1-6 after our COBRA election expired, but in hindsight he would have been retroactively covered.  All’s well that ends well I suppose.  


My thoughts on the process

There are a number of hoops to jump through, but the gold plated silver plan we ended up with is pretty sweet.  The maximum out of pocket cost is $500 per person and $1,000 total for the whole family.

I prefer to have the kids on the NC Health Choice plan because it has lower copays and provides 100% coverage for dental care (instead of 80% coverage for dental through the health insurance plan), but I won’t cry if they remain on our UnitedHealthcare policy.

Overall, I wish the process were much simpler.  We had to apply to two different places for health insurance (healthcare.gov marketplace and the state’s Department of Health and Human Services’ ePASS portal).  Why, oh why?  Healthcare.gov knows we want coverage for our kids.  In a perfect world we could complete the medicaid/NC Health Choice application while all the info is already in the system.

At the end of the day, we obtained reasonably good insurance for most of us, and eventually got insurance for our youngest member of the family.  We paid within $5 of what I’ve been estimating based on the healthcare.gov estimates when we provide our income.  Preferring to stay healthy, we hope to continue to not use our insurance very often, but sleep well at night knowing we are insured should the unexpected happen.  Because it probably will at some point.



What is your experience with the Affordable Care Act?  Are you dreading the application process?



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  1. We had to jump through hoops like crazy, but it all worked out in the end. All of our kids ended up getting thrown onto the CHIP program, which is essentially medicaid, with a small monthly payment. Congrats on getting it knocked out! Mrs. C. spent literally over a hundred hours on the phone with these people getting everything sorted out. One of the amazing aspects of the ACA is that if you under-estimate your income and receive too much of a subsidy, you don’t have to pay back then entire overpayment, it is limited drastically based on your % of FPL. I ended up making a spreadsheet to calculate this out, since we ended up having to pay a fee this year.

  2. It definitely sounds like a mess although that’s not surprising at all. It sounds like y’all were able to get some pretty baller insurance for a pretty reasonable price after the subsidies. While I disagree with lots of things regarding the ACA it’s no doubt been a boon for the early retiree. Just curious what the plan is or what you forecast costs to be should the ACA be completely repealed like some of the Presidential candidates are saying they’ll do. Health insurance is my biggest worry about whenever we make the leap to FI/RE although there’s still plenty of time for the kinks to be worked out before we’ll be having to cross that threshold.

    1. There’s a chance that the next president and Congress (on either or both sides of the aisle) could actually IMPROVE the overall state of health insurance provision in the US to actually make it more equitable and more affordable (by reducing costs, for example). Can you tell my faith in humanity isn’t dead yet? 🙂

      As for what I actually plan for, I don’t. I expect the same morass to continue indefinitely with tweaks. Or if a republican wins president and has the congress (and supreme court) to back him, he might take Obamacare, chew it up, let it digest a bit, then vomit it all back out and call it Trumpcare or Rubiocare. All the republican senate proposals I’ve reviewed from the past several years have kept some kind of ACA-ish coverage in place through various mechanisms. It’s noteworthy that those proposals don’t reset the clock to 2009 and revert back to a pre-ACA world. What will the health insurance landscape look like in 2017 or 2018? Who knows.

      I would budget for the costs based on today’s rules with the understanding that they may change and some individuals may pay a lot more in the future (and we might be one of the affected parties).

      1. I fully expect the ACA to be around in some shape or form from here on out. I’m sure you have multiple redundancies and safety factors built into your plan and of course there’s always the option of one or both of you returning to work just to get cheaper health insurance. I hadn’t researched what an early retiree would have done prior to the ACA coming into play so I was curious if you had. I have no idea what the costs or options were even like prior to it.

        1. I remember researching it maybe around 2008 or 2009 and finding insurance for around $500-600 per month for the whole family of 4 at the time. Possibly closer to $400 if I could have enrolled the kids in medicaid/NC Health Choice. The problem with that rate is it’s for those in perfect health. One minor ding on our health records could drive the rates way up or make one uninsurable. Rates were also rising at a fast clip each year.

  3. Hmmmm….My experience? A nightmare….I met with a “navigator” not once but twice and found her to be clueless on many topics. And she was termed “experienced” as she has been with the ACA from the beginning…. The “problem” seems to be that I derive my income from investments and rental properties. And based on the fact that the rental biz can be brutal, some years the income is meager or non-existent. Add to this I was tasked to predict/guess what my income for 2016 would be…Thus the reason for the second meeting, as I put together not one year but three year out predictions. I don’t think she fully grasped the concept of a “prediction” or AGA. I was also struck by her intentionally or not trying to push us into Medicare. As memory serves the Fed pays for up to 3 years for folks pushed into Medicare with the new expanded eligibility from the ACA. So our state would be “off the hook” if we were on Medicare….”a different healthcare bucket”. After all of this, we were offered silver plans that had high deductibles…out of pockets of $2K-5K and disappointing subsidies. In the end I stayed with my “grandfathered plan” because if I ever leave there is no going back. Eventually I think I’ll have to go on the ACA for coverage and hopefully by then they will have their act together. I’m disappointed as to the poor result I received after spending A BUNCH of time on research and meetings. And as for your 3 year old being denied coverage with no real explanation…sad….truly sad. Please keep us up to speed on your experience and thanks for sharing.

    1. Your comments on estimating income reminded me I wanted to show the readers in this post what I entered for income in my healthcare.gov application (that info now appears in this post!).

      I am amazed they didn’t ask me for verification of income since I only had self employment income, retirement income, and investment income.

      As for the three year old, we expected he wouldn’t get coverage through the ACA policy and expected the other kids to not get coverage either. They should all be eligible for medicaid/NC Health Choice and I’m not sure why the older two weren’t shown as “maybe eligible”.

      1. Thanks for the addition, during my “app” I basically created P&L’s for each of the rental properties and then investment income. I swear I think the “navigator” was overwhelmed. What worried me was the ACA could “claw-back” and claim that I should have been on Medicare and I would have had to pay back subsidies or incur penalties. Too many uncertainties…shouldn’t be like that.

        1. Consult your own tax advisor as always, but check out the quote in the article above from the instructions for Form 8962 (advanced premium tax credit):
          “However, if a Marketplace made a determination that you or a family member were ineligible for Medicaid or CHIP for certain months (for example, you were approved for APTC for those months), the individual is considered ineligible for Medicaid or CHIP for those months, even if your actual 2015 income suggests that the individual may have been eligible for Medicaid or CHIP”

          I bolded the relevant part. If you were approved for the subsidy then the marketplace has determined you are ineligible for medicaid, so you’ll be eligible for the PTCs, even if your income ends up lower later on, or they redetermine your eligibility. I was concerned about exactly the same issue for our 2 older kids. Didn’t want to take hundreds in subsidies then be denied those subsidies when I file my taxes in 2017 for tax year 2016.

          1. I call this ….”healthcare insurance calculus”….The really crazy thing is I went on the site and came up with a dollar figure in subsidies and she came up with a lesser amount. When I questioned how she came up with the figure she became “be-fuddled” and claimed it would “shake out” when I did my 2016 taxes….”no worries”…WHAT?!#$%… Tell ya what…. I would be happy to go to a class for this stuff…..as long as it was free. My tax gal who is a CPA said it appears to her that the IRS will be getting new responsibilities, enforcing the ACA subsidies on top of their many duties already …with no additional funding. She has not heard of anyone getting “nailed” yet for ACA subsidies….but that all could change.

  4. I just went through this process in the last month as we prepare for early retirement on 4/1. I explored ACA/Obamacare coverage through our State Exchange (MN) and had similar problems getting basic questions answered. I went to a local insurance agent and had a great experience though. He was very up to speed on the State Exchange, COBRA, and Individual Plans. We purchased an Individual Plan for our family of 3. We don’t have the benefit of getting a subsidy, so it is about $900/month.

    1. So the MN state exchange was no better/easier?

      If I didn’t expect a subsidy, I figure it would be much easier to go straight to an insurer and buy a policy without a subsidy.

      1. I helped my mom will Covered California’s and it was one of the easiest things I have done in a while. She was set up in 20 minutes (of my work) and about an hour of hers (decisions, looking up MDs etc). That tells me it is possible, even though the feds’ website and support is awful (according to most people I have spoken to).

        1. One of the benefits of letting states set up their own exchanges is to allow a laboratory of sorts in policy and procedure. See what works and what doesn’t. Hopefully our political leaders can move beyond politics and take a serious look at the more effective exchanges and programs (like Covered CA if what you are saying is the typical experience) and encourage other jurisdictions and the federal marketplace to move in that direction.

    1. I can’t tell if that’s sarcasm or not. 🙂

      I actually prefer the medicaid/NC Health Choice plan but the exchange offered them coverage immediately and because of the way the subsidy is calculated, adding the 2 kids didn’t cost anything. So I can switch to medicaid once they gain coverage through that route.

      Since the kids don’t have any medical issues and we rarely visit the doc for them anyway, it’s mostly a non-issue (does it matter how great your insurance is if you don’t use it?). But when we would use it, our same doctors are all in network and we have access to plenty of local hospitals. I haven’t spoken to our doctor about private insurance vs medicaid but our dentist recommended Medicaid/NC Health Choice over the private insurance dental plan that comes with our health insurance (“because you won’t pay anything and they cover everything”).

      If the kids ever do have a serious chronic medical issue and medicaid won’t work, there’s always the possibility of purchasing private coverage and simply paying out of pocket ($200/month or so; subsidies not available if they qualify for medicaid). Although private insurance won’t cover everything either.

      I assume you were serious SnowCanyon, but I’m going to leave this reply here since I expect to get at least one comment saying “medicaid sucks / why would you ever subject your kids to that horror / they gonna die”.

      1. Not sarcasm!! As a wage slave, who sadly does not have access to Medicaid, yes, it’s the best insurance available. Why workers can’t have it is a mystery. You pay nothing… And get everything.

        1. Ok, good. 🙂 I’ve heard mostly good stuff about medicaid and think it gets unfairly demonized way too much. I wish something like medicaid would be broadly available to all, with the option to layer private insurance on top of it. I’d definitely pay more tax for it.

          If a lot more folks had medicaid, I bet more providers would accept it. “Lack of provider network” is probably the biggest complaint I’ve seen. I haven’t noticed that locally, but I’ve never searched beyond a basic query as to whether our normal family doc that sees us and the kids is in network, along with our dentist and the local hospitals.

          1. Medicaid rates are so low that docs can’t afford to accept it, although it pays well for kids and most pediatricians do accept it. Frankly, they do so out of guilt. Medicaid patients have a not entirely undeserved reputation for being extremely difficult and simply not showing up for appointments, increasing the amount of money practices lose when accepting patients. If Medicaid patients want a larger network, they should realize that they need to try and appreciate the care they are receiving! All kids’ hospitals and most academic centers do accept it. It’s not the program that has the stigma, but the patients, sadly. But it has far more comprehensive coverage, especially for kids, than private. People pay nothing, and sadly I think that makes people appreciate it less.

            1. That makes sense I guess. I’ve certainly seen some ranting and raving about medicaid from some distant relatives. Really minor piddly stuff like I can’t get this elective procedure (that medicaid covers 100%) done at my local craptacular hospital clinic way out in the boonies, and instead I have to drive to the county next door (like 20 minutes max). For a free multi-thousand dollar procedure. And here I am with a high deductible plan thinking “wow, wouldn’t it be nice to not pay anything for all that instead of thousands out of pocket since we never hit the deductible.”

              I was helping a family member get medicaid for the delivery of their next kid (long story but they fell through the ACA cracks and have insurance that costs over 20% of gross pay), and in the paperwork, there was a lot of info about missing appointments, the cost of missing appointments, how critical it is to not miss appointments, how it interferes with the care you (the patient) receive and prevents other patients from being seen to receive the care they need, too.

            2. Great conversation on Medicaid. And thanks, as always, for your diligence in test-driving ER issues. I saw this sentence on Darrow’s Can I Retire Yet blog today regarding ACA eligibility, “Be sure to generate enough income to exceed 138% of the Federal Poverty Level in states that expanded Medicaid, or 100% of the FPL in states that did not.”
              I was wondering what the differences were for an early retiree between Medicaid and ACA. This conversation helps. Thanks.

            3. As a physician, I’ll strongly echo the statement about how poor medicaid reimbursements are.

              Note: this applies only to adults on medicaid. I’m not familiar how medicaid works for kids.

              Typically a doctor gets paid via the diagnosis. As a gross oversimplification, I’ve found private insurance to reimburse about 2-2.5x the medicare rates. Medicare rates typically pay 2x the medicaid rates. The medicaid rates are very very low in the reimbursement department that honestly many physicians are not breaking even on that patient if one factors the cost of providing that care (office fees, staff fees, malpractice insurance fees, etc).

              Note the above simplications are approximations to illustrate why many docs cap or refuse to see any new medicaid patient. The actually reimbursement rates are more complicated.

            4. Wow! My doc gets around $60 to $120 for a basic to complex office visit from the insurance co. At the 4-5x lower rates you’re saying medicaid pays, I can see why docs don’t accept it. I wouldn’t expect my doc to spend the 3-5 minutes with me plus pay for all the support staff, building rent, etc for $12.

              This poses the bigger question. How did we get ourselves in the situation of having private insurance paying 4-5x what medicaid pays, while a dude walking in off the street with no insurance pays maybe 2x the rate pvt insurance pays? And where do we go from here to fix it? Doctors need patients that can pay so they can stay in business and pay the rent, while patients need access to medical care.

  5. A few thoughts:

    1) Just how many resources and dollars should we allocate to make sign for subsidized health
    care quick and easy for an able bodied working couple who choose to retire early?

    2) My family is on its own path to financial independence, however our path is considerably slowed down by the new taxes we have to pay to support this program.

    3) I think it is a fair question whether we should be subsidizing non-work at the expense of those who still do work, especially for able bodied, young people with plenty of resources to pay for their own healthcare.

    I’ve been perusing FIRE blogs for a couple of years now, so I don’t expect these comments are going to change anyone’s mind, but someone needs to point out the obvious. Please take these comments in the spirit they are intended, constructive criticism to highlight a point of view that is missing in Justin’s article. I’m a big fan of frugality and simplifying one’s lifestyle.
    However, since it takes productive, working people to generate returns on one’s invested nest egg, you shouldn’t expect to continue to earn 8-10% returns from the stock market if there are decreasing incentives for people to actually go out and produce economic growth. These social welfare programs have consequences. And in most countries, those consequences are less growth, less employment and less economic dynamism.

    1. 1) Just how many resources and dollars should we allocate to make sign for subsidized health
      care quick and easy for an able bodied working couple who choose to retire early?

      It should be as quick and easy as possible for everyone who qualifies. I don’t like paying for two layers of bureaucracy to obtain health insurance for our family. The fact that I was able to apply online for both sets of HI is a huge improvement over the old method of driving to a monolithic (and expensive) government office building, taking a ticket, waiting in line in a heated waiting room, talking to one or more reps, then photocopying a bunch of forms and paperwork.

      Our current system of benefits and patchwork coverage is the problem, and simplifying that would make designing a user interface and application process much simpler.

      As for your second and third points – I get it. I hate paying taxes too, and do whatever I can to minimize them. But we subsidize the hell out of insurance coverage for hundreds of millions of employees every day. Our family routinely received $10-20,000 worth of employer provided health insurance every year while working. If that amount were included in our taxable income, we would have owed an extra $5-10k in taxes every year. Nice subsidy for those still working with employer provided health insurance.

      So let me flip this around. Do we really need to be doling out thousands of dollars subsidizing able bodied still working folks health insurance?

      1. Fair point Justin. The whole healthcare market is filled with market distortions, subsidies, taxes and price controls.

        Congratulations to you and your wife on your recent accomplishment. I’m just a little jealous, but since the reasons my family is not in the same situation are entirely the result of our spending / saving choices, I can’t complain too much.

        All the best to you.

        1. Thanks, and best of luck to you, too. Hopefully one day you will be on the receiving end of the subsidies (or it’ll be a more fair, transparent playing field and you can pay for your own coverage).

          It’s a huge cluster right now, so it’s hard to point a finger and say “they are the problem” simply because there are so many problems.

    2. “All the new taxes”

      Exactly which taxes are you talking about? I do pretty well and am subject to none of the new taxes (3ish % on high investment income, Cadillac plan – which imo is way to lenient in that it does very little to fix this huge economic distortion).

      The bulk of this plan was “paid for” by future savings in Medicare, which will likely never actually occur.

      1. I was wondering the same thing. If I were to make enough to “suffer” the higher ACA related taxes, I’d secretly be slapping myself on the back and high fiving anyone around because, hey, I’m making a ton of money to get into the 3% extra medicare tax range.

    3. Fair point made by Boris, ACA is just a tax on those with means to pay for those who don’t. I’m a fan of your work Justin and this is certainly not your ‘fault’, I would take advantage of anything that is legal and fair game just as you have but it’s a bad system. Sorry, just have to point that out.

  6. You cannot call yourself “FI” and rely on the gubment handout at the same time. You’ve tried to justify it to Boris but I expect deep down you know this. An individual who legally avoids giving his hard earned money to the gubment in the form of taxes is not the same as the individual who relies on this subsidy of someone elses taxes already paid.

    1. What government handouts? You mean the premium TAX CREDIT? I also take the Child TAX CREDIT. Do you have a problem with people taking tax credits that they qualify for?

      1. How do you feel about rich people (with way higher incomes than we’ve ever had) getting their huge houses paid for using government subsidies (mortgage interest deduction)?

    2. The irony is thick when I hear people voice their disdain for the rich “relying” on “government” money like there’s something wrong with wealthy people using gov’t programs that their taxes helped pay for – in fact oft times a MAJORITY of their taxes paid for those programs that they “shouldn’t” use. The rich, even FI early retirees who live frugally – have paid a boatload of taxes over their lifetime and what have they got in the way of direct gov’t services for that money that was confiscated? The answer is very little. Don’t tell me about free roads and free fire service. We pay state and municipal taxes on top of state and federal income taxes to help fund those “free” services. There is nothing morally or financially inconsistent with (relatively) rich folks using ACA subsidies to defray the cost of healthcare. Let’s not forgot that the program was sold to the American people as a way to bring down the cost of healthcare. Why would anyone complain when it actually does that??
      I would argue that it’s patriotic for all Americans – rich and poor – to join the ACA pool and support it so it doesn’t fail.

      1. I don’t get it either. Why complain about someone who’s participating in a program with the explicit purpose of helping all lower, middle, and some upper middle income households afford health insurance? What next? We whack 65 year olds over the head for collecting SS and participating in Medicare if they have more than a buck on their balance sheet?

        1. I think people are frustrated because the way you are participating in the program is not helping middle class households. Using the subsidies you don’t need increases the overall cost of health care for healthy individuals. Look at it from the point of view of a twenty-thirty something year old with a low net worth but decent income who pays $200/month for health insurance. That twenty-thirty something is subsidizing a family of five with a net worth of $1,000,000 so the entire family of five can pay $75 less per month than a single healthy person. That is why people feel you are not just participating in the program but taking advantage of the program. But rather than being mad at you, anger should be directly at the terrible health care system our country offers.

          1. By definition, I “need” these subsidies based on my income (the metric the system uses). I’m not really doing anything to game the system. We spend under $40,000 per year, and I expect to have an AGI of around that level for the foreseeable future. I’ve attained my net worth goals, so I wouldn’t work and earn any more than I am today (unless the job was just too much fun and they insisted on paying me!).

            You are right to suggest we should be looking at the health care system overall. Should we spend limited governmental resources subsidizing insurance for households the same size as mine that earn over $100,000? Why is the healthcare system so F’ed up in the USA?

  7. So weird that your three-year-old is getting sequestered to some alternate universe! And what a bummer that Healthcare.gov is so unhelpful. Our state has its own exchange, and we’ve gone through multiple applications just for budgeting purposes (we’re still 22 months away from needing ACA insurance), and it has been MUCH easier than what you’ve described. Maybe time to start lobbying your state to make its own exchange and take the Medicaid expansion (what a colossally stupid decision that is for the non-expansion states! Because why would you want to actually get your own tax dollars back in your state?!). The income verification piece (or lack thereof) makes sense, since you have to reconcile it all on your next tax return. And it’s a good reminder overall that the sweet spot for income is between Medicaid eligibility (which we do NOT want — SO hard to find doctors who will accept it), and before the subsidies drop off precipitously. We basically plan to reverse engineer our income based on what the income and subsidy tiers look like at the time we retire. 🙂

    1. I think I’ll stick with the feds running the Exchange. Our state isn’t known for excelling at large scale IT projects (to be polite). I’ve worked on the inside with State IT enough to know it’s a huge cluster of inepts with a culture that accepts mediocrity. I don’t know if the feds (or their contractors and fed project managers more likely) are any better, but they can’t be worse. 🙂

      I agree on the medicaid expansion issue. Incredibly stupid. How do you get political points for denying those adults most in need of critical health care which would cost your state nothing for 3 years, then only cost 10% of the actual cost indefinitely (feds pay other 90%)?

      Good point about the income verification – you true up the income at tax time.

  8. My sister has been uninsured her entire adult life (preexisting condition and works for small business). She finally got health insurance this year, but didn’t qualify for a subsidy. She’ll pay about $300/month and has a $3K deductible. That’s not the worst, and she’ll be able to keep her own doctors. God forbid she have a catastrophic illness, we would be able to help her pay the deductible. She went through an insurance broker, who was significantly more helpful than the site. We are in Ohio and we have Medicaid Expansion, so we have more plans to choose from. I know other states have poor plan coverage with insanely high premiums and deductibles.

    I actually am a nurse for a Medicaid HMO, and I would say our coverage is great. I have worked for private insurers and they would never consider breaking their medical policy to make an exception for a kid. Where I work now, the child’s needs come first. I have been able to make a case on a kid’s behalf many times for an additional benefit or to negotiate with expensive non-participating providers to make sure a patient has their needs met.

    1. I’ve heard good things about Ohio’s medicaid program. Good to hear your sister now has coverage. Mrs. RoG’s mom has coverage once again this year thanks to ACA (and pays $20 per month I believe). In the past years she made too little to qualify for subsidies and since we don’t have medicaid expansion in NC, she went without and thankfully had nothing major go wrong. Although if something did go wrong, it would be the ER and just not paying bills (the de facto health care solution for millions of other uninsured folks).

      1. I can vouch for that, I live in Ohio and my son has a pre-existing condition. Our doctors actually recommended we look into medicaid as it would help get us get approved for a new experimental drug that our Insurance company denied a few times.

        We can keep all of our same doctors and the savings are great.

        I know ACA is not perfect, but the fact that people with pre-existing conditions can now be insured, was worth it to me and my family. I would have had to work at ‘MegaCorp’ essentially forever, to keep him was insured.

  9. Wow, it seems like the whole process was a nightmare. What’s amazing to me is that you went through the process 3 times and received 3 different results. In the end the secret handshake was doing your application over the phone? That’s really strange.

    1. Ha ha, I know. What’s the old definition of insanity? Doing the same thing over and over and expecting different results? Guess that makes the process insane. 🙂

      I can only assume I wasn’t catching the nuance in the questions about employment or employer provided coverage or the end dates or something. I remember asking the marketplace rep specific questions to clarify (something you can’t do with the online form). The funny part is that the quick 2 minute health insurance subsidy estimator at healthcare.gov always gave me the correct cost we would pay and the correct subsidies we would receive but the detailed application that took an hour the first time didn’t come close.

  10. Curious if you chose an HSA qualifying plan just in case you need any tax savings vehicles in the future? I recently went through this whole process too, hated it, applied three or four times to get it right, and I did eventually get a letter that I needed to provide income documentation. However, totally irrelevant consudering income is at best “a guess” as I am manually manipulating it with contributions. Not sure how it will go, but as of now we chose a HSA plan so that we can still contribute but it wasn’t the cheapest premium option. Hopefully a win win since we are still in our working/savings years. Interested in your thoughts. Cheers

    1. I didn’t go with the HSA option plan (at least I don’t think I did). In any event, our deductible is $0 so our silver plan, even if it were HSA eligible, would lose the HSA eligibility because of the lower deductible that comes from the cost sharing reduction subsidy. In the future, if our income is too high to snag those cost sharing benefits we might go with a higher deductible plan just to save on premiums, though I don’t really need the tax break from the HSA at this point (very modest income other than what we generate from Roth conversions each year).

      I’m curious if I’ll get a letter requesting validation of income. It was stated as a condition on one of our earlier eligibility determinations, so it’s possible that I will still have to submit something.

      1. I can almost guarantee you’ll get a letter to verify income. No big deal, but yes I think you’ll be getting one. 🙂

    2. When I read “manually manipulating it with contributions”, I took that to mean that subsidies are based on our income after we contribute to retirement? Is that rt? For example we make $54k and contribute $4k to a 457. Are our subsidies calculated from the $54k or $50k? Thanks for your help. We sign up for ACA on March 4 and knowing the answer will help.

      1. subsidies are calculated based on MAGI, so pre-tax contributions to retirement plans will lower the MAGI, meaning it would be 50k.

  11. I’ve trained call center reps before. They are deliberately instructed in all of the nuances of how to operate their systems, but usually not instructed in the underlying regulations and laws. So it doesn’t surprise me that your experience was frustrating – you just had a circumstance which was a bit outside the norm. It doesn’t take much to confuse the ACA’s IT system.

    Count me as a huge proponent of Medicaid. Sure, there’s a lot of waste in the system, but IMO that’s mostly a result of what kind of people the vast majority of Medicaid enrollees are. The vast majority of its bad press comes from either 1) politicians/budget folks/anti-government zealots who are upset about spending any money whatsoever to help people, or 2) people who are misinformed by politicians/budget folks/anti-government zealots who are upset about spending any money whatsoever to help people.

    I’d caution future early retirees to be careful about special enrollment periods. There is a review going on right now regarding the various ways that people could qualify for special enrollments, and how many of them are really necessary going forward. “Loss of employer coverage” will always be a valid reason, but some of the others will definitely get the ax. Just FYI to always to due diligence, and that healthcare regs change yearly.

    1. I’ve worked with the trainers of the trainers of the call center reps and understand how it works. They have a process to follow and much of their interaction is largely scripted (“If customer asks for X, then respond with Y and pull up Z system and fill out the form”). That’s the frustrating part – it’s near minimum wage people you’re talking to instead of a person who could actually provide advice and help with getting the service you need.

  12. Justin,

    I give you a lot of credit for discussing the ACA. For one, it is informational and I believe a lot of people learn things. That is one of the points of financial blogs; sharing information. While I understand that it is natural for some to not feel that this program is fairly disbursed, I would point to other factors that they should look at first.

    1) Why is healthcare so expensive to begin with in this country? Why are prescription drugs so expensive relative to other countries in the world? Why do hospitals charge tens of thousands of dollars if a patient is admitted. Why do they upcharge an asprin by 10X or 20X what the actual cost is?

    2) Why is it that a majority of other cost in society is disclosed and / or negotiated before a purchase is made for a product or service and healthcare is not?

    Obviously the system is crooked. Special interests, for profit hospitals, for profit insurance, for profit drug companies. Why do companies get rich off of healthcare? Is there a conflict of interest for the greater good of society?

    All the ACA tax credits do is lower the cost of inflated health care. Just like W2 employee health insurance. At the end of the day it is unfair for all of us. All criticism should go toward fixing the core problems in a broken system.

    1. Well “MW Landlord”, one could make the argument that the ACA was created to help the Medical industry. If one couldn’t afford health insurance they just did without. And then if a problem arose you either went to the emergency room or Doctor. Then after treatment you either made payments OR it just had to be “written off” as uncollectable or worse case bankruptcy. Now with the ACA and large subsidies everyone is supposed to be covered and therefore the Medical Industry’s chance and amount of non-payment is greatly reduced. My thought is this benefits Hospitals and Doctors…probably more than the patient.

      1. Jestjack,

        You are correct it does benefit hospitals, doctors, pharmaceutical companies, etc to ensure that they get paid the ridicules rates that they charge. That is the point. The system is corrupt and we are all being taken advantage of by for profit entities. The ACA “helps” people get coverage and cost relief, but the underlying problem that needs to be fixed is a corrupt system. A system that only cares about profits.

    2. “All criticism should go toward fixing the core problems in a broken system.”

      That’s the biggest problem. The system is busted. Zero price transparency, bloated paperpushing bureaucracies driving up overhead, and a patchwork of coverage options to wade through.

  13. I worked for Department of Children and families for 12 1/2 years. Cash, food stamps and medicaid applications. This was 6 years ago. Every state has different medicaid rules as medicaid is a state program with federal subsidies.
    In Florida there are different rules for medicaid based on age. From birth to one year of age is one category, from 1 to 5 is another category and from 5 to 18 is another. Each category has a different poverty level and may or may not look at assets. The younger the child, the more likely they are to qualify for medicaid. Adults only qualify for medicaid if they are disabled or have children under the age of 18. If the family has income, the adults will usually wind up in the share of cost program which requires the adults to pay their share of cost( can range from 2 dollars to 12,000 dollars depending on income) before becoming eligible for medicaid for that month. Share of cost must be met each month in Florida. Some states qualify for the rest of the year. In Florida it is difficult to find coverage. In my county, none of the major clinics will accept medicaid. It’s not a twenty minute drive for coverage it is two hours, a lot of my clients did not have vehicles and there is no public transportation to other counties. The only dental options for adults are to have their teeth pulled and one set of dentures. Children are supposed to have coverage but I don’t know of any dentist in this area that will accept medicaid. Our state did not go with expanded medicaid and the governor has actively worked to restrict medicaid coverage. Because of this we have a large adult population that should be eligible for coverage but is not. They are also not eligible for Obamacare because they don’t make enough income to qualify. Obamacare assumes that each state will cover those individuals thru expanded medicaid and makes them ineligible for the federal program. If your state has good medicaid coverage, count your blessings.

    1. If the politicians work hard enough, they can destroy any program they want!

      We are another non-medicaid extension state and it baffles me why our state wouldn’t take the money. It would be hundreds of millions or billions pumped directly into our local economies (in the form of docs, nurses, and hospitals actually getting paid for the services they render instead of writing the bills off as uncollectible).

  14. Your previous post on your wife quitting her job, where you state you didn’t feel she needed to continue to work for the betterment of society, is in direct conflict with this article. I get the early retirement and not wanting to slave away until 65. I am also on my way to early retirement. The problem is: you are now a burden on society, in the form of a subsidy paid by those that are working and making the kind of salary you were making. In one sense, good on you for making the most of the system. In another sense, it’s a far cry from fair for others to pay for your health insurance when you are able body enough to earn it from working full-time.

    I don’t mean this as a personal dig. I am simply pointing out one of the many flaws of ObamaCare.

    1. Here’s the thing – I report the income I earn from this blog and my small early retirement lifestyle consulting practice to the IRS. I’m “working” the equivalent of two full time minimum wage jobs, I just do it in a few hours per week (instead of 80). And in spite of that I qualify for these health insurance subsidies. I could be working full time earning over $100k per year and still receive these health insurance subsidies to a lesser degree.

      I wouldn’t mind paying my own way for health insurance but I’m certainly not turning down these tax subsidies while they are available.

  15. Health care should be considered a basic human right that all residents of our country are entitled to, regardless if they work, are retired, unemployed, or whatever.

    To those who believe able-bodied early retirees who accept ACA subsidies or Medicaid are freeloaders, how do you feel about people who accept police and fire protection but don’t pay any taxes to support those services? How would you like it if you called 911 to report a fire in your house and the operator asked you to first verify that your fire insurance premiums were paid up to date before dispatching a fire truck?

    Why should people be required to pay individually for health care but not police and fire protection?

    Where I live police and fire protection is paid for by property taxes. My wife and I own our home, so we are paying for those services every 6 months when we pay our property tax bill. Renters are indirectly paying their landlords’ property taxes through their rent payments. How about homeless people? Should they not be eligible for police and fire protection because they don’t pay property taxes? How about young people who live at home with their parents or other relatives and pay no rent? Should they not be eligible for police and fire protection? Of course not! Everyone should be able to call 911 to ask for help from the police or the fire department at any time.

    Health care should be just like police and fire protection. Everyone is entitled to protection, and it shouldn’t matter whether someone is currently paying into the system. Some people pay a lot of taxes while they’re young and employed, and then they don’t pay anything for the rest of their lives after they retire early. Some people pay into the system every two weeks until they’re 65 or 70+ years old. Others never pay a dime into the system. It all evens out, though.

    A large percentage of people are never going to retire early, so the whole argument against able-bodied early retirees accepting benefits to which they are legally entitled is a straw man. Early retirees are such a tiny, tiny minority of our population that it doesn’t matter.

    1. It sounds like you are an advocate of nation wide single payer health care. I am an advocate of this as well. I am not a big believer in big business making huge profits on health care.

  16. So far, my family’s experience with Medicaid has been mostly positive but interesting.

    Last summer when I quit working we applied for ACA, got turned down for subsidies because we qualified for Medicaid, signed up for Medicaid and got our insurance cards in the mail within around 2 weeks, which gave us no break in coverage. My employer’s health insurance plan ended on June 30 and our Medicaid coverage started on July 1, 2015. As RoG described in the above post, the sign up process was a little disorganized and chaotic, but after spending “only” a few hours on the phone with our state’s ACA/Medicaid reps, we were covered. It really wasn’t as bad as I was expecting.

    Differences in health care coverage between my former employer’s plan and our current Medicaid plan:


    1) All covered services and medications are paid for 100%. No deductibles. No premiums. No copays. $0 out of pocket for us so far.

    2) My new PCP is closer to my home than my previous doctor, so we don’t have to drive as far to see our doctor.


    1) Our previous primary care physician who we’ve been seeing for almost 20 years doesn’t accept Medicaid, so we had to change doctors. This wasn’t that big of a deal. As I mentioned above, our new PCPs are actually closer to where we live now, so it’s more convenient. We liked our old doctor, though, so we were kind of bummed to lose him.

    2) My new primary care physician is actually a clinic, which has several (many?) doctors working there, so each time I’ve been to the clinic (twice so far) I’ve seen a different doctor. The first doctor I got was really good and I liked him a lot. The second doctor, not so much…

    3) Since my new PCP seems to cater exclusively to Medicaid patients, the atmosphere is pretty different from our previous doctor. The new PCP has a security guard, with a badge and uniform, sitting in the waiting room. At first, I was a little taken aback by the guy who looked like a cop sitting there, but he’s always been very nice to me and everyone else, as far as I can tell. The vibe is just really different at the new doctors’ office. It’s not a bunch of middle class people who are taking off work to come in for an appointment. The clientele at my new doctors’ seems much more prone to yelling and arguing with the receptionists, who incidentally are behind what looks like bullet proof glass. 🙂

    4) Confirming several comments in the thread above, our new PCP seems much more concerned with patients’ coming late or not showing up for an appointment than our last doctor. The new PCP requires that we show up to check in 20-30 minutes before our scheduled appointment time. Last time I went, I showed up 35 minutes before my appointment time. Right around the time of my appointment a nurse took me into an examination room, took my BP, height, weight, etc., and asked me a bunch of questions. Then I sat there waiting in the exam room for over an hour before the doctor came to see me. Through the open door I could see the doctor literally running from room to room in the clinic, occasionally barking something at one of several nurses, then disappearing again into another exam room.

    One thing I noticed at my new Medicaid sponsored PCP that stood out to me was the bizarrely high ratio of clerical people to actual nurses and doctors. On my last visit to the clinic, I only saw one doctor. That’s probably why he was running around like a chicken with his head cut off. There were also several nurses. On the other hand, there was an entire room full of at least 10 women sitting at desks staring at computer monitors and talking on phones. My guess is that those are the people who are in charge of extracting payment out of Medicaid for the services the clinic provides to its patients. It seems like that might be part of the problem. Doctors shouldn’t have to employ a whole army of people just to collect payment for their services…

    1. Our doc’s office doesn’t have bullet proof glass or a security guard but the doctors are always running this way and that. And there must be a 5:1 ratio of doctors to nurse assistants, receptionists, and billing people. I just figured this is how the modern primary care physicians work.

    2. I have had mostly positives as well. We early retired in late 2014. So far we have had 3 months of coverage from my past employer, medicaid for the kids and aca for adults and currently medicaid for everyone.
      Same family practice doctors. I like our new dentist. It is a vary barebones waiting area and they definitely cater to medicaid. The dentist and hygenist like us as my kids are friendly guys with very nice teeth. Nice change compared to adults with seriously neglected mouths.

      1. Sounds like our dentist. Very basic office but clean and efficiently run with effective communication from office staff. I think they have a lot of medicaid patients and cash payers and we are probably exceptionally good at dental hygiene compared to their average patient. I watch people walk into the waiting room all the time and ask “cuanto cuesta sacarse una muela?” (how much to pull a molar?). $99 special for that, senor. I bet our dentist is glad that none of our teeth are close to needing pulled. 🙂

  17. “This means we can wait and see if he has any ridiculously expensive medical needs during March and April before deciding whether to get COBRA coverage for those two months.”
    Since a person needs to have health coverage under ACA the entire year, does this qualify? I’d think it would be considered a 2 month lapse in coverage.

    1. The kick over to Medicaid will cover him. Also, any medical expenses should be retroactive so there shouldn’t be any reason to pay for COBRA unless one is worried about an error in determination.

  18. We went on Obamacare in 2014-15 when my husband and I both went to part time work for better work-life balance. We did it through the Covered California exchange. It was pretty heinous and I spent hours on the phone getting it all squared out. We finally got insured and all was well for a few months till I got a check in the mail one day from Anthem for an amount just under our premium amount. No note of explanation, just a check for $700. Suspicious, I called Anthem and they told me Covered CA had cancelled my insurance. WTF? I called Covered CA and they were befuddled, but did acknowledge that they had cancelled our insurance. It took nearly a full month to get reinsured and I never received any explanation other than “computer error.” I went online and saw that this has happened to 100s of people in CA except I was lucky because I discovered the lapse in coverage before we had any medical expenses. One woman found out she didn’t have insurance when she got the bill for her mammogram!

    I didn’t have to validate my income nor did my husband, but they did request income validation for my daughter, age 5. I wrote a snarky letter stating that as she is only 5 she has no income, but perhaps they’d like proof of her parents’ income, and I included proof of that.

    I hope you’re experiences are less eventful than mine. Now that we’re living in Spain I’m feeling hesitant to return to such a 3rd world country when it comes to healthcare access. Eventually America will join the modern world. I just hope it’s soon.

  19. Wow. That all seems like a ton of work. I am really glad I don’t have to worry about finding my own insurance for a long time! When the time comes though, hopefully it won’t be to bad because I don’t have kids and my boyfriend gets his health insurance through the VA.
    I’m glad you ended up getting pretty decent insurance for a good cost though!

  20. Great post! I just jumped into early retirement, and went through similar hell trying to get insurance. We have a slightly different approach (skipped the subsidies, and went direct to the insurance company). We should be able to write off our premiums and expenses as they will most likely exceed the 10% threshold of our income now that we are retired. I would love to compare your experiences with ours at the end of the year! Thanks for the great information. Now that I am “retired” I am hoping to really get my blog going as well!

    1. We are still in limbo with the medicaid/NC Health Choice application. Day 47 and it still shows as pending (ie the state hasn’t done anything with it yet). When I call they can’t tell me when my application will be reviewed or even what date of applications they are currently reviewing or the average time to process applications. We have till April 30 to do retroactive COBRA but beyond that we are uncovered for the 3 year old until they either accept him into NC Health Choice or deny him (which will make him eligible for ACA subsidies).

      Not an ACA problem at all but rather my state’s failure to process applications in a reasonable time frame and a complete failure at communication.

      1. It is not just your state. AFTER we purchased our health insurance and saw our new doctors for the first time – 2 months later were were sent Medicaid cards! Really? After talking to our doctors offices, we can use it as a secondary insurance, so we will do that as we have no “employer income”. The healthcare and tax world is definitely not ready for early retirees, but we will forge the way! Keep up the great Blog!

      2. Florida has 45 days to process a medicaid application. Up to 90 days for a disabled adult application. I believe North Carolina has the same requirements. If you haven’t heard anything, I would call and ask to speak with a supervisor so that the case can be reviewed for meeting processing time standards. If you still can’t get an answer, contact your congressman. They will usually contact the office and get an answer. The squeaky wheel gets the grease.

        1. Thanks for the tips! I’ll call again next week once they re-open after Easter holidays. Definitely over 45 days since I applied on Feb 7. I have a lot of time on my hands so I can get pretty squeaky. I have a friend that’s a spokesperson for NC’s medicaid agency so I might start there to see if he can provide some grease.

          1. Hi ROG. Can you provide an update on your younger child’s NC Health Choice/Medicaid app. We will be in a very similar situation next year, in your state, so I’m following your story closely.

            Also i have not been able to determine if you can drop Cobra for a child before 18 months if you qualify for Health Choice. Have you seen this addressed in your research?

            Thanks so much for sharing your story!

            1. Check out this article

              As noted in that article, we applied in early February for Health Choice and just today, 2 months and 5 days later, I finally received a call asking for documentation. I emailed it to the staff handling my application a few hours after her phone call. Not sure how long it will take to review my documentation but now that my case is under review hopefully it won’t take long. I’ll try to update the blog when that happens.

              As for COBRA, my understanding is you can stop paying it whenever you want (just stop writing the checks 🙂 ). The problem is dropping COBRA doesn’t make you eligible to sign up for ACA coverage mid year (you must wait till open enrollment in Oct-Nov for the following year of coverage). Health Choice/Medicaid doesn’t require any qualifying event to apply mid-year so you can apply at any time. That’s my understanding of it at least.

  21. Signed up for 2015. Tax credit was $ 983 per month – paid $540 a month for my portion of insurance premium. Fast forward to March 2016. We now have to pay back $2,600+ to IRS.
    This is due to (we think) second lowest silver cost plan (SLSCP)setting the amount you are actually going to receive ,which varies depending on where you live. Healthcare.gov never mentioned this when we processed our application. We contacted healthcare.gov and they could not even explain what SLCSP is. They said to contact IRS. We had already signed up for 2016 and SLCSP was again, not part of the equation.

    The advanced resolution team (misnomer,by the way)also said they entered our income at $36k for 2015 (we have 3 sources of of income and they left one source out)and not even close to what we entered as income. We provided documentation to verify income after we signed up to VERIFY our application and apparently they don’t understand VERIFY.

    Almost 50% of people signed up on healthcare.gov for 2014 had to refund money to IRS. Also look up how many people on obamacare did not pay their insurance premiums. Maybe obama’s friends should not have gotten the no-bid contract for setting up this disaster

    1. Strange – second lowest cost silver plan is very clearly what my subsidy was based on (though we bought the slightly cheaper lowest cost silver plan). I double checked that to verify that my subsidy matched what I was supposed to receive.

      Ha ha – “advanced resolution team”. I bet. 😉 They try their hardest for $9/hr employees bless their hearts. I can’t imagine that’s a fun job at all given how boring the 30 minutes on the phone was for me as a customer.

      Not too surprising that 50% had to repay part of their subsidy at tax time. Rarely can we hit our AGI target exactly as provided to the Marketplace a year earlier. We very well might end up owing a few hundred $ even though I’m targeting a $42,000 AGI. Might be off a bit.

  22. I stumbled across your blog today, and I have really enjoyed reading it. That is until I read this post regarding the ACA and your use of it. I greatly respect those that have worked hard and have invested well. However, I find it somewhat unethical to a use a system that was formed (supposedly) to help lower the cost of healthcare to those who could not afford it. My husband and I are self employed and make a wage that makes us unqualified for subsidies, so this is a very big issue for us. I respect the fact that you have chosen to retire early, but sir you have a net worth of $1.4 million and you expect us to pay for your children to be on Medicaid! Wow, what is happening to America? My family is working so hard so that we can also enjoy retirement, but with insurance premiums around $1,700 per month it’s difficult. This part of your story is a big turn off. Certainly you must understand that my tax dollars are funding your children’s healthcare, and when you are worth $1.4 million that is absurd.

    1. I would respectfully suggest that the problem here isn’t me or anything I do. The problem is a busted health care system. It’s a broken insurance system. You’re spending $1700 per month on health insurance! That’s crazy! Let’s answer why it’s so expensive and what can we do about the cost first, then figure out an equitable way to pay for it. I agree that I might not need these subsidies but I’ll participate in whatever tax credits and programs I’m forced into to get healthcare under our current system.

      In the meantime, if I were you I would see if there are any tax moves you could make to pull your AGI down low enough to qualify for a subsidy. That might mean making slightly less income (if you’re close to the AGI limits), IRA/401k contributions, or some other deductions.

    2. Many of us are in the same boat as the RoG Family.

      When I quit working last summer the first thing I did was call up my state’s healthcare exchange because I knew that I was required by law to maintain insurance for my family. After asking me some questions over the phone the healthcare exchange representative told me that we were not eligible for ACA insurance because our income was too low. I told the woman that we had savings and therefore I assumed we wouldn’t be able to qualify for Medicaid. The rep told me that I needed to apply for Medicaid first. If we were turned down for Medicaid, then, she said, I could call the exchange back and then they might be able to give us insurance. Medicaid took all of our information over the phone, and two weeks later we all had full coverage insurance for $0/month.

      It’s not early retirees’ fault that the system is the way it is. We called up the government bureaucrats, followed their instructions, told them the truth about our assets and income, and Medicaid is the only insurance that we were qualified for, so we took it.

      @Rachel, as Justin said above, the fact that you’re paying $1700/month for health insurance for your family is the problem, and luckily it’s something that you can easily optimize by adjusting your MAGI so that it falls below the cut off for ACA subsidies. As a self employed person, you can easily lower your salary and/or max out your SEP IRAs, SEP 401K’s, etc., so that you can reduce the amount you’re paying for health insurance every month. A lot of that money you’re putting into health insurance could be going into your retirement accounts instead. Why not concentrate your efforts on optimizing your own situation so that you can pay as little for health insurance as possible, rather than worrying that others are getting a free ride on your dime? Wouldn’t it be better if none of us had to ever worry about health insurance or how we were going to pay for it?

      Eventually, single-payer universal health insurance will come to the U.S. It’s just taking us a little longer than every other rich, industrialized country in the world to see the light.

      1. That’s a good point. It’s not as if we have much of a choice when it comes to having health insurance. We are required by law to have health insurance or pay a fine for failure to comply. The Marketplace told us that we have to apply to Medicaid/Health Choice for our kid. We have to tell the truth and certify that we’re telling the truth while filling out all the applications. The subsidies/benefits we get are calculated by a formula and by a computer.

    3. Rachel,
      I worked for Dept of Children and Families in Florida. Processing cash, food stamps and medicaid applications. For children younger than 5 assets are not a factor in determining eligibility for medicaid and for most insurance programs in the ACA you must have a denial letter from medicaid before they will determine your eligibility for another program. If you are eligible for Medicaid, you must enroll in that program as you will not be eligible for anything else. I know it sounds strange but its how the law works. Neither Justin and his family or anyone else has a choice in the coverage that is available to them. The government makes that determination.

  23. My oldest son just turned 26 and graduates from college in June. He has talked to several potential employers in his field but they are require full-time availability. Even so, most employers require a 30 to 90 day waiting period before they qualify for an employee sponsored plan. His school offers no insurance plan plus he graduates in June. We have been searching through the HealthCare.gov website and certainly found it cumbersome. Currently he works part-time and has little income, just enough to cover tuition and student loans. Luckily he has not health problems, except some mild asthma that he is usually able to manage with only rare Dr. appoints and minimal medications. We found an inexpensive plan for him and researched the insurance company, which had terrible reviews. We called his physicians office, because he has been seeing this family doctor his whole life and would really like to keep him because now that he is beginning to entering the real world of life on his own. The only insurance plan accepted by this doctor’s practice is the one that got the worst reviews. He choose this plan since he has generally no health issues. Hopefully something serious doesn’t happen anytime soon!

    My biggest concern is my daughter who turns 22 later this year. For now she is still covered by my husband’s insurance. She is in college but because of a learning disability is only able to attend part-time and work -time. Because of this, we are certain she will not graduate before she turns 26. Also, my husband has been desperate to retire early. He will be 57 this year. The only thing keeping him from retiring early is concerns about healthcare and insurance costs. My daughter has intermittent healthcare problems but my husband and I have several life long problems that have required very frequent medical care with several different problems, i.e., seizure disorder and childhood diabetes. We both require expensive medications. Because of her learning disorder, my daughter requires an expensive medication that is not ADA approved and so not covered by most any insurance company. We have continually tried to locate several different methods to cover the cost of this medication.

    Any thoughts or recommendations. Because of my husband’s ongoing medical problems he would like to retire this year and his employer ended their retirement program between 5 and 8 years ago. My husband has worked for his current employer for almost 20 years. Thanks for any input

  24. I was actually laid off from my job and went through BCBS NC to sign up for the Affordable Health Care. It was strangely a very easy process. I say this because I am never one to have things like this go easily. I went to BCBS website and submitted my application. A BCBS rep worked with me on a Sunday night and took care of everything. She had the basics from my application, I just explained more – she did all the computer work. She submitted me the quotes and even helped me get a great subsidy. Yes, granted, I do have to pay some back next year as I will make more than allowed by year end, but it was overall an easy experience. We had glitches in my application – like it didn’t go through at first and she had to start over. But she did it all. She worked on it when I wasn’t on the phone. I highly suggest people going that route than dealing with the website directly. The woman was very educated on all the specifics of the health care act – just worked for BCBS. I ended up getting a subsidy and pay $75 a month for a health care plan that was better than even the one I had when working. My new job has free insurance for employees so I am ready for that to kick in and then I will be doing really well.

    1. Pretty cool! Were you locked into BCBS insurance since you applied through them? I liked the marketplace aspect of the Marketplace. You could shop plans from Unitedhealthcare, Aetna and BCBS (I think all 3 were available in my zip). The BCBS options were the worst of the three providers (at least at my income level and in my zip code).

  25. Here is my experience as self employed individual (family of 2 ):

    2015, Signed up for HSA plan through Healthcare.gov and received $450 subsidy with $32K income. Then the verification process started….after 3-4 evaluations (paperwork moving back and forth) they drop my subsidy so naturally I cancel insurance. ($550 mo payment with $12,900 deductible…who could rationalize this?)

    2016, I miss the enrollment deadline. Without filing my taxes I cannot prove my income. It is impossible to file taxes as self employed individual by Jan 31st. I call a representative to explain the difficulty for self employed individuals to meet such a narrow deadline. I continue to explain technically I have negative income and she says I MUST sign up for medicaid, BUT I DON’T WANT MEDICAID! I want to buy an HSA plan with a subsidy because I know at the end of the year I will have very low MAGI. So then she asks me to guess what my income will be and I say “I only take 28K-32K out of my business for living expenses, its all I can afford to live on!” So as of now I have the subsidy, but I fear the verification process again. Last time they wanted a day-to-day ledger of my financial activities, which I REFUSE TO GIVE ANYONE FOR A PRIVATELY HELD COMPANY!

    Overall getting affordable healthcare and keeping it as a self employed individual has been a HUUGGE hassle. It is mind boggling for me to understand why I would need to provide such sensitive/tentative information to them to buy health insurance.

    P.S. Thanks to everyone who has shared their thoughts/experience. I have learned so much.

    1. That sounds like a mess! So far I haven’t been asked to provide income verification. Hopefully it remains that way. I’ll settle up at tax time in 2017. That’s about as complicated as it should be!

  26. I found your comments about the call center employees to be, well, a little much. The people you didn’t like were robots, and the one who finally helped you was “possibly sentient” at best? I’ve had bad customer service experiences, too, but I’m not going to call the unhelpful accounts receivable rep I spoke with yesterday sub-human. And if she makes $9/hr, I’m certainly not going to mock her for it. Anyway, I usually really enjoy your posts, so I guess I was just disappointed to read that type of thing on RoG.

    1. Your tolerance for inept customer service far exceeds mine. 🙂

      I’ll just say that I expect more and was disappointed in the reps ability to explain my situation or why I got what I got. They really were as helpful as the webpage hence my description of them as “like robots”. “Possibly sentient” = in contrast to being non-sentient “like robots”. The second rep was nice enough but just that helpful.

      1. Yeah, that sounds like a frustrating situation. I wouldn’t say that my tolerance for inept customer service exceeds yours, but I may be less likely to disparage the people who’ve served me. I used to tell more hero stories, but I outgrew it, I think. At least for now.

        1. You are a fucking safe space pussy Jay, that’s what I am certain of. What a fucking douchebag comment/critique. These customer no-service folks are worthless fucking loser scumbag Muppets. How about that? They generally have a terrible attitude and an IQ below 90. I’ll criticize them all I wish.

  27. I am not so familiar with this subject so please bear with my simple questions. Now in order to get qualified for subsidy from Obamacare, MAGI has to be lower than the cutoff which is 40K. So Justin, appearantly, your MAGI is way below 40K, but how did you manage to have so low MAGI with all the dividend income and capital gains? I know you answered my question before but it is still not clear to me.
    I understand dividend income is not taxed as long as your total income (not MAGI) is under 72K. Can you just give me some numbers so that I understand?

  28. I used Obamacare in 2016. The application process was easy (I am single…). Did not apply for subsidies though (I thought they would not apply to me, in a sense I thought I didn’t “deserve them” because I am not working…) I ended up with enough income from capital gains to put me over the 400% limit so it was bad planning on my part (ignorance really). In any case I did not renew into 2017 because the premium went up 47% and I was leaving the country for a few months. Now I am back and exploring to join a “medical share ministry”, which looks like it will cost about 60% less than the cheapest plan from the marketplace.

    1. I really wish obamacare would impolode already so we could focus on the cost of actual procedures not the cost of insurance. Insurance is the problem it does not bring down the cost of health care. Even worse you are now forced to pay for your neighbors healthcare no matter how health conscience they are.

      The ACA is terrible for small companies like my 2 person LLC. Compliance is a nightmare. They want to know hoe much your business will make at the beginning of the year which is impossible especially for new companies.

      Have gone around and around with the marketplace every year. I basically am denied my subsidy and healthcare every year after the first quarter for not being able to verify income. ACA is aweful for working class. It is robbing peter to pay paul and is not a long term solution to an aging population that is sick and largly broke.

      1. It IS very disappointing to see all the politicians’ rhetoric over health insurance and healthcare yet no one is really talking about the exorbitant cost of healthcare and how to reform the system to cut out the bureaucratic overhead expense. Who knows, maybe the current administration will be the one to bring about great change for the better?

    2. The medical share ministry might work out for you. I remain a skeptic simply because you don’t have a contract where they guarantee they’ll pay for coverage. And they could allege you violated one of their ethical requirements to remain covered and you have no real recourse.

  29. Justin would you recommend entering what you think your AGI will be as income when you apply or should we use our gross income?

    1. Putting your AGI in will give you the most accurate estimate of subsidy. And if you’re quitting a job or lowering your income, definitely put in what your new income will be.

  30. As a point of comparison, the 2019 premium for a Federal retiree on one of the lower-cost plans through Federal Retiree Health Benefits (FEHB):

    Deductible: $3000
    Net Deductible after HSA passthrough: $1200
    Max annual out of pocket costs: $10,000
    Cost sharing: 95%
    Premium: $315/mo (75% subsidized by the government, so total plan cost is $1260)

    The problem is that if I dump FEHB for an ACA plan, I can’t ever go back to FEHB. But now I’m wondering what’s the benefit of FEHB’s I worked so hard to obtain. Still, it’s hard to justify paying so much more for inferior coverage…

    1. Lots of people are stuck with the same dilemma. Your retireee plan is guaranteed and ACA plans are subject to whims of politics, and dependent on your income remaining below a certain level.

      I’m not sure what advice to give, however ACA grows more and more entrenched in our entitlement system every year that it remains in place. It would be quite shock to revert to the old system of pre-existing conditions, underwriting and no subsidies.

  31. I just came across your article about the ACA application process. I am so glad I am not the only one that was going around in circles with it! 2019 was the first year I was trying to use ACA because my Cobra coverage was ending. What a nightmare, I had to redo my application a few times and spent quite a bit of time on the phone with clueless agents. I was either told neither one of us are eligible for subsidies to all 3 of us are eligible for Medicaid. My income verification got rejected multiple times without any explanation why. (I am self-employed so I had no pay stubs to supply.) At the end they accepted a self-employment affidavit where I did my best to estimate my AGI for 2019 and I was eligible for a subsidy and my kids got Medicaid premium coverage. This was the most confusing application process ever!

  32. Why does it seem like everyone on ACA goes for the silver plans? Have you ever looked into a bronze plan that would have 0 premiums and still a low deductible with cost sharing. Also, does your plan ever have an HSA option?

    1. “Cost Sharing Reduction” subsidies only available on silver plans. It means we have almost zero copays/deductibles in case we actually get sick during the year and need a large amount of medical care. I haven’t seen any bronze plans offering the cost sharing reduction programs. Typically they have huge deductibles and out of pocket max (which would make it HSA eligible in general.

  33. Do you know if you are at ~249% FPL with kids and your state has “Separate CHIP for uninsured children” up to ~300% of FPL, do you have to use CHIP or can you have them on an ACA plan?

    1. I don’t know the answer to that unfortunately. I’d see what the exchange does/says if you plug in the income and make some phone calls or emails to see if you can still get the ACA subsidies if you skip the CHIP insurance and opt for the ACA insurance.

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