The perverse incentive: Why Americans are trying to lose money to keep their health insurance subsidies
By
tosh
Summary
The article discusses the phenomenon of people desperately trying to lose money before year-end to qualify for U.S. health insurance subsidies, which have a hard income cutoff at $48,560 for individuals. It explores various financial strategies people use to reduce their reported income, such as buying put options expected to expire worthless, in order to stay below the threshold and maintain eligibility for subsidized healthcare.
Source
Key quotes
· 3 pulledIf you read any personal finance forums late last year, there's a decent chance you ran across a question from someone who was desperately trying to lose money before the end of the year.
One commonly suggested scheme was to buy put options that were expected to expire worthless, allowing the buyer to (probably) take a loss.
In the U.S., there's a hard income cutoff for a health insurance subsidy at $48,560 for individuals (higher for larger households; $100,400 for a family of four).
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