This article was first posted July 1, 2017.
Back in March, Retire Early outlined a strategy where multi-millionaire early retirees are getting their Obamacare for $50/month and asked, "How much cheaper can Trump make their insurance? (See link: Obamacare Repeal? My amazing story of drastically lower premiums.)
One unintended consequence of this move is that if you are a wealthy and healthy early retiree living off capital gains you can likely get an Obamacare Bronze Plan for the monthly premium of zero dollars per month.
This year I'm paying $54/month for my Obamacare plan. For 2018, my preliminary analysis of the Trump plan shows I could get my current Bronze policy for a premium of zero dollars while realizing an additional $5,000 to $10,000/year in capital gains. This is possible because the tax subsidies are pegged to the premium on the 2nd cheapest Silver Plan available in your zip code. Silver Plans also happen to be the ones that get the additional cost sharing reductions (CSR). So if you jack up the premium on the Silver Plan as North Carolina Blue Cross is doing, a healthy customer could opt for the much cheaper Bronze plan which won't be hit with the premium increase for losing the CSR.
Actuaries from the Kaiser Family Foundation have helpfully done the analysis. (See link:
Estimates: Average ACA Marketplace Premiums for Silver Plans Would Need to Increase by 19% to Compensate for Lack of Funding for Cost-Sharing Subsidies
Commonwealthfund.org -- Essential Facts About Health Reform Alternatives: Eliminating Cost-Sharing Reductions
Time Magazine -- Bitter Pill: Why Medical Bills Are Killing Us
How Millionaires Get Obamacare Subsidies Intended to Aid the Poor, by Dan Mangan,CNBC,January 26,2016
Why I'm Not Worried About Obamacare Premium Increases, Retire Early Home Page, November 2014
CBO estimate of health insurance premiums under Obamacare, Nov. 30, 2009
Health Care Reform in Indian Country
- Indexing Adjustments Related to Certain ACA Provisions , October 30, 2016
Health Insurance Premium Credits in the Patient Protection and Affordable Care Act (ACA)
- Congressional Research Service, June 13, 2012
Kaiser Family Foundation - Health Reform Subsidy Calculator
Federal Register - Health Insurance Premium Tax Credit
IRS - Affordable Care Act Tax Provisions
Actuarial Value and Cost-Sharing Reductions Bulletin
Plan Levels and Standardization of Coverage
Commonwealth Fund -- Choosing the Best Plan under Obamacare