Won't deferring the individual mandate be a fiscal time bomb?

[Small Business Owner of Any Repute]

That $25K earner may not be buying a house, but he many need to take out a loan for a used car when his current one dies. Or maybe he'd like access to a simple credit card at a reasonable APR. Or a good rate on car insurance. Or to be able to use a regular cell phone instead of a prepaid one you buy cards for at the grocery store. Or to be able to set up cable TV service without paying a massive deposit. Or to be able to rent an apartment from anyone smart enough to do a credit check.

[jimrtex]

Also, what's up with this fascination with bankruptcy? Sure, if you deal with cash afterwards your bankruptcy then it does not really affect you. But if you want to buy a house in a pricy region of the country, forget about it! And perhaps bankruptcy makes sense if you have a paid off house. Does it really make sense for a medical professional in their early 30's who has tons of student loans but no paid off house? Of course it doesn't! Unless they don't want the ability to buy a house that costs more than 250k.

The 29-year old in California who makes $25,000 per year isn't planning on buying a house.

If the premium after subsidies for a 29 year old was $229, then you would have a point. Do you have any proof that the premium for a bronze plan is $229 after subsidies for a 29 year old male making $25k? The guy in your hypothetical would likely be paying half that amount.

I trusted Mr.Former Moderate.

If the insurance company was not forced to cover those with pre-existing conditions, Mr.Hypothetical would not have to pay $229/month.  So they increased the price, and then added a subsidy, and a tax penalty.

The California Bronze plan offered by Anthem/Blue Cross has a $5000 deductible, 30% copay, and $60 per doctor visit fee. 

So Mr.Hypothetical is not going to get by for the subsidized rate (which is only a subsidy after the increase for the subsidy to the insurance companies) if he only visits a doctor once or twice per year,

[Sbane]

No plans have fees for preventative care. Of course that does not cover labs, AFAIK, which should be changed. Other than that, yes, a plan with high deductibles is desirable for a 29 year old. And like I said, someone making $25,000 a year will not pay $229/month after subsides even for a bronze level plan. If you think I am wrong, please do provide some evidence.

[jimrtex]

That $25K earner may not be buying a house, but he many need to take out a loan for a used car when his current one dies. Or maybe he'd like access to a simple credit card at a reasonable APR. Or a good rate on car insurance. Or to be able to use a regular cell phone instead of a prepaid one you buy cards for at the grocery store. Or to be able to set up cable TV service without paying a massive deposit. Or to be able to rent an apartment from anyone smart enough to do a credit check.

If someone makes $25K per year, they better keep their spending under $2000/month.

Your argument to him is that if he has a major health emergency and has to declare bankruptcy, he won't be able to live like he has $3000/month to spend.

Are you trying to sell him "Personal Responsibility" or "Instant Gratification"?

[jimrtex]

No plans have fees for preventative care. Of course that does not cover labs, AFAIK, which should be changed. Other than that, yes, a plan with high deductibles is desirable for a 29 year old. And like I said, someone making $25,000 a year will not pay $229/month after subsides even for a bronze level plan. If you think I am wrong, please do provide some evidence.

Mr.Moderate said the subsidized cost was $144/month.   But the $229 is including the subsidy to insurance companies to take on high risk persons.  So the benefit of the subsidy to our hypothetical California is not really $85/month.   And the $144/month is still more than the $52/month tax, which won't be due until 2015.

[Sbane]

Oh, you aren't including the "subsidy" to insurance companies. Lol. Not too many serious individuals are against guaranteed issue. If you are then I am not interested in discussing this issue with you.

[King]

Not going bankrupt due to a major health emergency is instant gratification?

[Torie]

This assumes that the $52 would be paid, and the only way it can be collected if not paid, is against tax refunds as I understand it. And therein lies one of the problems of course.

Here's a newsflash for you Torie.  Most people get refunds.  The default paycheck deductions cause most people to overpay their taxes unless they have a significant amount of non-wage income  or they go to the effort of having less taken out.  Ostensibly it's done that way to protect people from having to scrape together at the last moment the money needed to pay a tax bill, but in reality, it's so that Uncle Sam can get an interest-free loan from it taxpayers.

Now it's possible that after getting snookered out of their refund by Uncle Sam the first time they have to pay the tax, some people will choose to change their ways, but not all of them will decide that it's better to change their deductions than to start buying health insurance.

Yes, that may well be, but if you know you will get dunned, you can increase the number of deductions you claim on your W-2 form, so you never get a tax refund. Back in the day, I made playing the no refund game into a veritable art form (interest rates were high then, so the time value of money had some real meaning), and at one point, claimed, and claimed legally, about 72 dependents. That was in the day (pre 1986) where you could wash ersatz real estate losses against ordinary income (a syndrome exacerbated when they cut the depreciation period for real estate down to 15 years, and  on an accelerated basis to boot), so I paid very little tax in those days.

[True Federalist (진정한 연방 주의자)]

Yes, that may well be, but if you know you will get dunned, you can increase the number of deductions you claim on your W-2 form, so you never get a tax refund.

Yes, you can do it, and I've done it, tho never to the level you have, but most people do not, and especially not most people at the level of income where one has a job that does not offer employer-provided insurance.

[jimrtex]

Not going bankrupt due to a major health emergency is instant gratification?

Typical Californian (29 YO; $25,000 year salary): Yo.
Do-Gooder: Yo, how's the condo?
TC (glares): Like dude, I make $2000 a month.  I'm sleeping on the couch at my friend, and help with the food.
DG: So life's tough?
TC: Not so bad, I have cable, and a cell phone - none of those pre-paid cards for me.  And a car.
DG: Leased?
TC: Sure.  But It's mine after another 7 years assuming I can come up with the $10,000 buy out cost.
DG: $250x12x10 + 10,000 is $40,000.
TC: But I get to drive it now.
DG: Heath Care?
TC: I get a flu shot every year.
DG: What if you had to go to the ER, and got a $20,000 bill.
TC: Don't know, couldn't pay it.  Maybe I'd file bankruptcy.
DG: But don't you know that you couldn't lease a car, or have a cell phone or cable, no instant gratification.   Where is your sense of personal responsibility?

[jimrtex]

Yes, that may well be, but if you know you will get dunned, you can increase the number of deductions you claim on your W-2 form, so you never get a tax refund.

Yes, you can do it, and I've done it, tho never to the level you have, but most people do not, and especially not most people at the level of income where one has a job that does not offer employer-provided insurance.

The IRS over withholds on someone who makes $12.08/hour, $40/week, filing single, standard deductions?

[True Federalist (진정한 연방 주의자)]

Yes, that may well be, but if you know you will get dunned, you can increase the number of deductions you claim on your W-2 form, so you never get a tax refund.

Yes, you can do it, and I've done it, tho never to the level you have, but most people do not, and especially not most people at the level of income where one has a job that does not offer employer-provided insurance.

The IRS over withholds on someone who makes $12.08/hour, $40/week, filing single, standard deductions?

Someone's got to be getting refunds or there wouldn't be all those ads for refund anticipation loans each tax season that prey on the gullible.

[Small Business Owner of Any Repute]

Not going bankrupt due to a major health emergency is instant gratification?

Typical Californian (29 YO; $25,000 year salary): Yo.
Do-Gooder: Yo, how's the condo?
TC (glares): Like dude, I make $2000 a month.  I'm sleeping on the couch at my friend, and help with the food.

You think the typical Californian lives on his friend's couch?

[jimrtex]

Not going bankrupt due to a major health emergency is instant gratification?

Typical Californian (29 YO; $25,000 year salary): Yo.
Do-Gooder: Yo, how's the condo?
TC (glares): Like dude, I make $2000 a month.  I'm sleeping on the couch at my friend, and help with the food.

You think the typical Californian lives on his friend's couch?

You think the Typical Californian, 29 and making $25,000/year and single, owns a  condo, and would lose it when he files for bankruptcy?

[jimrtex]

Yes, that may well be, but if you know you will get dunned, you can increase the number of deductions you claim on your W-2 form, so you never get a tax refund.

Yes, you can do it, and I've done it, tho never to the level you have, but most people do not, and especially not most people at the level of income where one has a job that does not offer employer-provided insurance.

The IRS over withholds on someone who makes $12.08/hour, $40/week, filing single, standard deductions?

Someone's got to be getting refunds or there wouldn't be all those ads for refund anticipation loans each tax season that prey on the gullible.

Likely people who file itemized deductions on their taxes, but forgot to adjust their W-4, or people whose taxes have been erratic.  Tax calculation for someone filing single, with standard deduction is pretty simple: Lop off $10,000 for the personal exemption and standard deduction; Lop off $8925 for the 10% bracket and your tax is $892.50 plus 15% for the excess = $1804, $1808 according to the IRS withholding calculator, which is probably based on the tax table.

What can our Typical Californian claim as itemized deductions, that add up to more than $6100?

Are California taxes that outrageous?   How much interest is he paying on his auto lease?  Even if he is tithing. its not going to get to $6100.  If he has medical costs greater than $2500, he'd probably sign up for health insurance. 

[King]

Not going bankrupt due to a major health emergency is instant gratification?

Typical Californian (29 YO; $25,000 year salary): Yo.
Do-Gooder: Yo, how's the condo?
TC (glares): Like dude, I make $2000 a month.  I'm sleeping on the couch at my friend, and help with the food.

You think the typical Californian lives on his friend's couch?

You think the Typical Californian, 29 and making $25,000/year and single, owns a  condo, and would lose it when he files for bankruptcy?

The Typical Californian, 29, who makes $25k a year is likely non-white and lives in a non-white poverty stricken area or if he is white lives in a studio apt in a re-emerging ghetto somewhere urban. Not on his rich friend's couch.