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Obamacare Premiums Down 20% in Colorado!

Hot diggity dog! Well that’s really good news isn’t it?

There is a Taoist story of an old farmer who had worked his crops for many years. One day his horse ran away. Upon hearing the news, his neighbors came to visit. “Such bad luck,” they said sympathetically.

“Maybe,” the farmer replied. The next morning the horse returned, bringing with it three other wild horses. “How wonderful,” the neighbors exclaimed.

“Maybe,” replied the old man. The following day, his son tried to ride one of the untamed horses, was thrown, and broke his leg. The neighbors again came to offer their sympathy on his misfortune. “Maybe,” answered the farmer. The day after, military officials came to the village to draft young men into the army. Seeing that the son’s leg was broken, they passed him by. The neighbors congratulated the farmer on how well things had turned out. “Maybe,” said the farmer.

Obamacare is kind of like that.

The Denver Post is reporting that Despite premium spikes, many in Colorado could pay less for health insurance in 2018. Here’s the thing — if you buy your insurance on the individual market and DON’T GET AN OBAMACARE SUBSIDY, you are majorly screwed.

Depending on where you live, the unsubsidized increase could be even greater. The average person living on the Eastern Plains [of Colorado] will pay $2,712 more per year in premiums in 2018 if they don’t receive a tax credit.

In my instance, I do get a subsidy because I’m starting a business and my income is relatively low. Also, the “income” is “adjusted gross income” which means things like contributions to IRAs, 401Ks (which my business has), and HSAs all go to reduce the “adjusted gross income.” I’m managing both the money I make and the deductions such that my Obamacare insurance premium for my wife and me is about $300 per month. BWAAAHAHAHAHA!!!!

Because of the way Obamacare is structured, I can expect my premiums to go down to about $240 a month! Now is that awesome or what!

One particularly annoying thing is that for that $240 a month we get horrible insurance with a $12,000 deductible. In other words, it’s just purely catastrophic coverage and we pay cash for all routine work. Since we also wanted to keep our doctor, the last checkup I had cost me and my wife a total of about $1,000 for the “Say ‘Ahhhhh” and the old finger in the posterior.

My problem for next year is that my company grew quite a bit in 2017 so now I need to figure out how to shelter more money to keep the Obamacare subsidy. The math is interesting since the Obamacare subsidy is worth about $10,000 a year to me. This is “after tax” dollars! Thus, it’s worth more like $13,000 in pre-tax dollars very conservatively. I sell a product at roughly a 50% gross profit margin which means that I double the cost of the product to get the selling price. Thus, this $10,000 is actually worth $23,000 in sales! It’s quite likely that in Q4 2018 I will have to limit my sales to make sure I don’t go over the Obamacare income limit. Or I can bust my butt to sell substantially more than $23,000 to make it worthwhile to go back and buy non-subsidy insurance. Is this crazy or what?

One thing in the Denver Post article I take umbrage with is:

About half of Coloradans receive health insurance through their employers, while another third are covered by government programs. The premium spikes and tax credits do not apply to them.

Well, maybe not directly but the entire distortion of the insurance market along with the additional regulations brought on by Obamacare have affected everyone. It’s just not as obvious as it is in the individual market were something that worked quite nicely was totally destroyed for some very dubious reasons.

By the way, I don’t think it’s fair for Spartans to pay my Obamacare subsidy so I’ve decided I’m going to let Colorado Governor Hickenlooper be the one who pays for it. I suppose I should email him and thank him.

 
Mark Rosneck

Written by Mark Rosneck

Chief Cuck and Bottle Washer

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