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Affordable Healthcare or Bankruptcy- Which to Choose?

So for the first time in 7 years Hil and I will have healthcare March 1st of this year.  Why now?  Maybe the better question would be, “Why not sooner?”

The obvious answer, after 2007, we were broke and on the move.  Health insurance is/was more expensive than the housing we couldn’t afford or the food we couldn’t do without.  Tough choices all around- spend money just in case something bad happens or feed your children.  It’s not a tough choice for more than half the country who technically live below the federal poverty line.  You just can’t draw blood from a stone.

What’s different now?

For all of peoples complaining, the continued ranting on FOX news, the incredible PIA of the healthcare.gov website, the national healthcare plan is a good start.

The obvious problem-it’s complex.  There’s lot’s of forms and criteria that will determine if you can actually afford healthcare.  If you claim too much income or don’t include cost of living expenses you would be in for a shock at what the healthcare monthly premiums would cost.  Of course, if your state DID NOT expand medicaid like Montana- the rules are even MORE complex.

The Federal Government is FORCING me to pay a penalty for not having insurance

Especially in Montana we hear that a lot as the main reason why Obamacare is bad.  Think of it this way, if you elect NOT to have health insurance, the penalty is your fee to be able to go into any Emergency room and have the system pick up the rest of the tab after you’ve gone broke from all the expenses they charge.  They can’t legally turn you away and if you refuse to pay- they eat the losses.

In states that DID NOT elect to expand Medicaid (like Montana), if you cannot afford the subsidized health care you are not required to pay the penalty.  If you do qualify for the subsidy, which would cover up to 97% of the costs of the premium, but elect not to have healthcare- then you pay the penalty.

Is NOT having healthcare a great option?

In our case, if I were hurt or sick- we would go bust pretty quickly again.  While I am not the sole bread winner in the family, Hil and I are a team and it would be near impossible to run our business without one another.  We are not unique.  Somewhere between 67-71% of American families are dual income families.  Both parents aren’t working because they want to work, they must work to keep food on the table.  If either parent had an accident- there’s another family potential on the street.

In Montana, we feel pretty lucky.  Montana has a pretty extensive health care program for children.  It has a pretty high income limit, which means a big chunk of Montana’s population can qualify for the program.  Our kids have both health care and dental care through this program.  As a parent, I will risk my health but I won’t risky my children’s future.  Despite our children being covered, health care premiums for just Hil and I were quoted between $500-700 per month just for the ‘Bronze’ programs.  That’s post tax dollars folks.  If you took your gross income, subtracted all the Feds tax, subtracted all the state taxes, subtracted all the social security, medicaid, unemployment, AND THEN you subtract your rent, utilities, gas- we couldn’t pay $8,000 in health care premiums per year.

Entitlement versus Tax Deductions

I have owned MANY small corporations over the years and I have filed MANY MANY MANY tax returns.  One year I had to refile 4 years of corporate taxes to recapture losses and that meant 4 years of personal tax returns as well plus the current year- in total I filed 10 tax returns in one year.  IF my business was legally allowed to take a tax deduction or a tax credit- I would take it.  Why throw money away?  A penny saved is a penny earned.

For some reason people get really huffy if an individual takes an allowed tax deduction or credit and call it an “entitlement”.  We all have to make our own way.  We need to carry the load, earn our keep, and pay the absolute legal minimum in taxes we can to the government.  If the federal government said you qualified for money- why wouldn’t you take it?

I hate to break it to you folks.  BIG corporations take MASSIVE federal subsidies, despite huge corporate earnings, and have legions of accountants to deduct and recapture every single penny possible.  Why wouldn’t you?

Hil and I own a small family run corporation.  We are the ONLY employees.  We pay payroll through our bank and pay all the state and federal taxes, social security, medicaid, and unemployment taxes/fees.  We pay utilities, buy groceries, and support our community financially when eating out or buying goods as much as possible.  We fall in the 100 to 400% of the federal poverty level (the 400% hits right under $100,000 per year for a family of 4).

Why would I NOT take advantage of a federal tax subsidy for healthcare?

The maze of electronic paperwork is daunting.  The pathway is unclear with little accessible support to navigate the ocean of obscurity.  I finally ‘broke through’ the wall by actually speaking with a LIVE PERSON from the Montana Health Care CO-OP who answered some key questions.  The question, how much work would you be willing to invest to get paid $5,000 or more?  How long would it take for you to earn that much money (after taxes).  Hmmm!  Maybe now the effort is worth the reward.  Nothing comes free, you’ll have to work to maximize your return in the federal system but if your life were a business it would be stupid to refuse a sale or skip deductions and credit that would save you money.

If everyone treated their lives like a business (and filed taxes like a corporation) we wouldn’t need individual tax returns- but the federal government would go broke!  The feds make more money on taxes from individuals than they do corporations.  That should be no surprise.  It takes a little re-thinking to think of your life as a business FIRST, then think about your job or career SECOND.  But that is what needs to be done if you ever hope to carve out a life or a future where you are the main character in your own life.

For the first time in our adult lives, Hil and I will have health insurance that we can afford.  We’ll see how it turns out this year but, as I said, it’s a good start.  Why would we NOT want our country to be healthy?  Maybe next we do something about our children’s education?  But that may be a little optimistic.  Let’s just start with being healthy.

 

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2 comments to Affordable Healthcare or Bankruptcy- Which to Choose?

  • dpddj

    I am happy for you on your premium costs. You are the third person I know of fortunate to have that happen, including a cousin. I would, however, ask that you thank me. My premiums went up 45% and the employees of my small business also saw increases, though not as high. Someone has to pay – nothing is free. I agree the healthcare prices needed to be addressed – let’s start by taking away the exorbitant incentives for lawyers.

    I do enjoy your website and narration. Enjoy. I am trying to join the adventure in fall. If……

  • big cheese

    HI dpddj-

    Thanks for the comment, see the next post.

    regards,

    JC

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