Meet the McCoy's: Unintended Winners in Obamacare

An investment advisor I know referred me to one of his clients. Last week they came in to discuss how their individual plan was going to be impacted by Obamacare. I hadn't been given much information on the couple other than they are both in their late 50's and retired.

When they came in the first thing we went through was learning a little bit more about them and their history. It's a sad story with a very happy ending. Both are widowed and lost spouses at a fairly young age. One to a tragic car accident and the other to a work related accident. The only thing that wasn't impacted in their lives was on the financial side. Both had been well protected with proper planning. There was significant life insurance and due to the nature of the deaths both received sizable amounts from lawsuit settlements.

They both have individual insurance plans with excellent benefits similar to those of a gold plan. The annual premiums they pay are around $15,000. At least that's what they will pay until January 1, 2014.

Because of the perverse nature of Obamacare the McCoy's will see their premiums reduced to less than $1000 per year!

How can that be? It's simple. The assets they have include large amounts of money in investments and their bank accounts. In fact, they have over $3 MILLION in the bank. When they file taxes the only income they report is from capital gains and dividends. This lowers their taxable income down to just under $22,000 per year. At that income level they would be at 143% of the federal poverty level. Just above dealing with Medicaid but substantially low enough to only be responsible for 3.5% of their income in premiums.

Thanks to President Obama's health care law these millionaires are going to pocket an extra $14,000 a year.