Question on tax rates, and savings under the ACA
I'm trying to get an idea of the actual savings under the ACA. Lets say a plan cost 70% of what my employers plan cost for the same coverage. I'm trying to get an idea if I'm actually saving money.
Currently health care cost are taken out pre tax, but with the ACA exchange, it is post tax money.
Health care from my employer is untaxed.
If I buy on the exchange, I pay 15.3 in OASDI taxes (granted there are benefits to paying a bit more in OASDI taxes), then I have to pay income tax as well. Lets assume a marginal rate of 15%, although some people may fall into the 25% bracket (or higher). (and somebody with a marginal rate of 10% should qualify for medicaid.)
If insurance on the exchange is 30% cheaper, after paying 30.3 in taxes, (this also ignores state and local taxes, which adds another 6% for me) ,insurance on the ACA is actually a bit more expensive.
Under current IRS rules, you can only exceed medical expenses if they exceed 7.5% of AGI, so unless a change has made in IRS regulations, health care premiums are not deductible for most healthy people. I'm wondering an ACA plan that appears to be cheaper is actually more expensive once taxes are figured in.