Sunday, January 15, 2017

Uphill Climb

I was the one. 

I was the one who decided to run the risk of being misunderstood as taking a "side" in the debate leading up to the passage of the ACA years ago. I did so to raise the awareness among my artist friends that, because of our inherently erratic income, we were particularly vulnerable to a strange aspect of the way the ACA is set up.

I shouldn't have wasted my breath because no matter how much I pointed out that I wasn't arguing for or against the ACA, that's the only filter through which people have come to understand discussions about the particulars of any public issue. We're tribal now. We don't discuss issues and decide. We know which side we're on and from there we then learn from our tribe's sources how we're supposed to frame the discussion.
But there I was warning about the possible financial dangers inherent in the ACA's subsidy system to my artist friends. Nobody listened. I was just another person who wanted them to die without health insurance.
Well, poetic justice happens. I'm stuck in exactly the situation I warned about.

I've been struggling to get out from under a perfect storm of financial circumstances ever since the big crash of 2008. And, no, it's not that I was invested in the market and lost a bunch (if that had been the case, that would have been sort of self-healing, right? I mean, if that was the case, allI would have had to do was stay invested and I'd not only have recovered -- I'd be better off than ever. TARP was a fix for those who HAVE.). 

No, it's that the market crash marked a decided drop in buying in that final quarter of that year...and like many art fair artists, I rely -- to an unsafe degree -- on making a good bit of income from the sales in the final quarter and a half each year.

That year I didn't. And I was too close to the edge, financially. For the first time in 30 years, I went into the new year already in debt.

And I've been struggling with that ever since. If it's ever happened to you, you're painfully aware that you pay off a previous year's debt with the current year's income. If you happen to be so close to the line of solvency that you barely make it each year, you can figure out the consequences -- when you pay off the previous year's debt, the IRS says that you made that significant amount of income more than the previous year and suddenly you owe the IRS even more than the debt you paid off.

And the perverse thing is that the ACA doubles that problem.

It works something like this:
You get a subsidy based on the previous year's income level. You make more the next year. Now, not only do you owe more in taxes for which, as a self-employed artist you may or may not be prepared, but you also have to pay back the previous year's ACA subsidy. WHAM-WHAM, the one-two punch of higher taxes and the subsidy payback.

It appears from what I read on facebook that many are blithely unaware of how much their subsidy for the ACA is. I'm guessing this only because I witness conversation after conversation in which one party is complaining about the degree to which their health insurance premiums have gone up...only to get the response that the respondent's premium either hasn't gone up, or has gone up from, say $17 to $85 a month.
In other words, blithely unaware that the $17-$85 a month premium is ACTUALLY a premium of in excess of $1,000 -- for which the other taxpayers are paying the bulk.

But should you have the good fortune as I of making significantly more in a year than you have in a previous year -- good for you. But neither the government nor the ACA give a damn -- whether, or for how long, or how it happened -- that you are still in debt. They expect you to pay your increased taxes AND pay back the $10,000 you got in subsidies the previous year.

If you're prepared you may be able to figure out some way to borrow the money to pay both. If you're not, you won't. And god help you if you paid off any lingering debt from previous years.

I can't say I didn't warn me.

1 comment: