Choosing our ACA Health Insurance Plan for 2025
Choosing an ACA Health Insurance Plan is one of those sentimental holiday season activities we look forward to each year.
Here is the process I used to choose our plan for 2025.
The Obamacare Tick-Tock
Thanks to the Affordable Care Act aka Obamacare, the health insurance options available to us are standardized. It definitely makes it easier to compare and contrast.
And thanks to a series of somewhat dated yet excellent blog posts (e.g. Obamacare Optimization in Early Retirement and Obamacare Optimization vs Tax Minimization) I have a clear understanding of how to balance costs and benefits.
Unfortunately, that balance seems to require either a cheap plan with insanely high deductibles (just pay the first $13,000 of medical needs out of pocket, good times) or an OK plan with decent benefits but restrictive income challenges.
So which did I choose? Both.
Obamacare Advanced Premium Tax Credit Repayment Limitation
What if somebody gave you an interest-free loan for a year? Say, the government, maybe. And then instead of requiring you pay back all of the loan, they only wanted half?
This situation actually exists within the Affordable Care Act / Obamacare in some circumstances. Throughout the year, Premium Tax Credits are paid directly to the insurance company based on our estimated income for the year. Then come tax filing season, we reconcile any differences – if our actual income is greater than estimated, we repay the excess on the advanced credits.
For the self-employed, seasonal workers, and retirees living off variable investment income, estimating income accurately can be next to impossible. As such, to provide some protection against unexpectedly large tax bills, as long as total income is less than 400% of the Federal Poverty Level (FPL) the amount of repayment is limited.
And those limits can have profound implications.
Going Back to Cali…?
Going back to Cali, stylin, profilin
Growlin, and smilin, while in the sun
Paying taxes and health insurance premiums
Driving to the mountains in the vintage Escort– LL Cool J ft. GCC
We have been having the Forever Home discussion for some time now… Is there somewhere we love that would be a good place to raise a kid or two?
We have a few International destinations in mind, but several places in California rank high on our list of criteria.
I hear California is an expensive place to live, with high taxes, costly health insurance, and sky high housing prices. I figured I should at least crunch some numbers before we consider putting some California cities at the center of our radar.
Obamacare Optimization vs Tax Minimization
Balance (photo credit)
Optimizing Obamacare vs Minimizing Taxes presents a classic trade-off.
On the one hand, it would be nice to maximize Obamacare subsidies. Easy! Simply don’t generate a lot of income.
On the other hand, we want to minimize taxes. We do this by offsetting income with standard deductions and personal exemptions, and generating (a large amount of) income that has preferential tax treatment.
But for the ACA, there is no preferential tax treatment. There is no standard deduction, no personal exemptions.
In this post, I explore how to navigate this complex environment in order to optimize health insurance premiums, out of pocket medical expenses, and taxes. Can we find the balance?
