ACA/Medicaid income

[gbstack]

My Daughter is a student in North Dakota and she will be a resident of North Dakota in 2016 and I will no longer be able to claim her as a dependent in 2016.

She is currently on our ACA plan! It looks like her income may be too low to qualify for an ACA plan! Medicaid would be an option but I would prefer she had an ACA plan!

If she claimed enough income to qualify for an ACA plan but failed to achieve the income needed what would the penalty be?

 

[jim584672]

Since North Dakota expanded Medicaid she should sign up for it. She doesn't have to use it and it will not cost her anything and she avoids any penalty. Seems like a non-problem to me.

 

[gbstack]

Since North Dakota expanded Medicaid she should sign up for it. She doesn't have to use it and it will not cost her anything and she avoids any penalty. Seems like a non-problem to me.

Just not sure Medicaid would cover her when she travels home for holidays and summer!

 

[jim584672]

That is a problem with any policy. They only cover urgent and emergency care out of state.

 

[gbstack]

That is a problem with any policy. They only cover urgent and emergency care out of state.

So Medicaid also covers urgent and emergency care out of state or is each State different?

 

[MichaelB]

If she claimed enough income to qualify for an ACA plan but failed to achieve the income needed what would the penalty be?

The income estimate she uses needs to be verified during the application process and in some cases again during the year. I don't recall any penalty or fine if actual income during thet year is less than the estimated amount.

That is a problem with any policy. They only cover urgent and emergency care out of state.

Some insurance policies have network coverage across multiple states. Each policy is different and the buyer must verify exactly how far the network reaches.

So Medicaid also covers urgent and emergency care out of state or is each State different?

Medicaid usually covers emergency care, but when out of the network there are often very stringent limitations.

 

[aaronc879]

I live in a state that did not expand Medicaid. If I estimate my income at $15,000 I would get around $250/mo for subsidy. If my income ends up being below the minimum which I think is around $11,600 then I would have to pay back my entire subsidy. This is something I am very concerned about. I'm not entirely sure if it works the same way if you live in a state that expanded Medicaid but I would guess it is.

 

[ziggy29]

I live in a state that did not expand Medicaid. If I estimate my income at $15,000 I would get around $250/mo for subsidy. If my income ends up being below the minimum which I think is around $11,600 then I would have to pay back my entire subsidy. This is something I am very concerned about. I'm not entirely sure if it works the same way if you live in a state that expanded Medicaid but I would guess it is.

In states that expanded Medicaid, if you are under the 133% income threshold which is the minimum required to purchase through the Exchange with a subsidy, you will be eligible for Medicaid. It is the states that did *not* expand Medicaid where you can be screwed -- too little income to buy on the Exchange with a subsidy, too much income for "traditional" Medicaid.

 

[aaronc879]

In states that expanded Medicaid, if you are under the 133% income threshold which is the minimum required to purchase through the Exchange with a subsidy, you will be eligible for Medicaid. It is the states that did *not* expand Medicaid where you can be screwed -- too little income to buy on the Exchange with a subsidy, too much income for "traditional" Medicaid.

So if you claim expected income of just over the minimum and get the maximum subsidy, what's happens if you end up just under the limit? Do you get to have a ACA exchange policy all year for very little cost with no payback needed? Are you then forced to accept Medicaid the following year or can you just keep getting a better policy for almost nothing through the ACA? If you're not a full time salaried worker then you don't always know what your income will end up being and that makes things very complicated.

 

[Bestwifeever]

She'll be a student? Here's an option:

https://www.ndus.edu/students/ship/

The site says the plan is equivalent to a platinum plan and will cost $1473 for the spring and summer semesters.

But if she is 26 or less years old, can't she stay on your health insurance even if she is no longer a dependent?

https://www.healthcare.gov/young-adults/children-under-26/

 

[gbstack]

In states that expanded Medicaid, if you are under the 133% income threshold which is the minimum required to purchase through the Exchange with a subsidy, you will be eligible for Medicaid. It is the states that did *not* expand Medicaid where you can be screwed -- too little income to buy on the Exchange with a subsidy, too much income for "traditional" Medicaid.

So in a state that did expand Medicaid and you sign up for a ACA plan but at the end of the year your income was too low for ACA plan would you have to pay back the subsidy?

 

[gbstack]

She'll be a student? Here's an option:

https://www.ndus.edu/students/ship/

The site says the plan is equivalent to a platinum plan and will cost $1473 for the spring and summer semesters.

But if she is 26 or less years old, can't she stay on your health insurance even if she is no longer a dependent?

https://www.healthcare.gov/young-adults/children-under-26/

I believe she has to be a dependent to stay on our ACA plan!!

 

[ziggy29]

I believe she has to be a dependent to stay on our ACA plan!!

Nope!

https://www.healthcare.gov/young-adults/children-under-26/

From the linked site:

If a plan covers children, they generally can be added to or kept on a parent's health insurance policy until they turn 26 years old.

Children can join or remain on a parent's plan even if they are:

Married
Not living with their parents
Attending school
Not claimed as a dependent on their parent’s tax return
Eligible to enroll in their employer’s plan
These rules apply to both job-based plans and individual plans bought inside or outside the Marketplace.

 

[MichaelB]

There are two types of subsidy. One is premium assistance, which are tax credits to help pay the premium. The other is cost sharing, where the deductible and co-pays are also subsidized. At year end reconciliation, there is no repayment for cost sharing. There is a repayment for excess premium assistance, but only in cases where income exceeded the estimate.

 

[ziggy29]

So in a state that did expand Medicaid and you sign up for a ACA plan but at the end of the year your income was too low for ACA plan would you have to pay back the subsidy?

Not certain. Much of the ACA and buying on the Exchange requires diligent "engineering" of income that hits your MAGI. In some situations it's trying to get *enough* income to be eligible to buy on the Exchange with a subsidy. In others it's trying to remain just below certain income "cliffs" that massively reduce the subsidy.

Note that you *can* purchase insurance on the Exchange if you are eligible for Medicaid, but you are not eligible for any subsidy or cost sharing.

 

[gbstack]

She'll be a student? Here's an option:

https://www.ndus.edu/students/ship/

The site says the plan is equivalent to a platinum plan and will cost $1473 for the spring and summer semesters.

But if she is 26 or less years old, can't she stay on your health insurance even if she is no longer a dependent?

https://www.healthcare.gov/young-adults/children-under-26/

Thanks for the information! When checking I was told they have to be a dependent to stay on our plan! Sound like they gave me some bad info!

 

[I was misinformed]

From questions & answers on

https://www.healthcare.gov/medicaid-chip/#howtoapply

What if I'm eligible for Medicaid, but want to buy an insurance plan in the Marketplace instead?

A Marketplace insurance plan would cost more than Medicaid and usually wouldn’t offer more coverage or benefits. If you qualify for Medicaid, you aren’t eligible for savings on Marketplace insurance. You’d have to pay full price for a plan.

 

[MBSC]

If you made a good faith effort to accurately estimate your income for an ACA premium subsidy but your actual income falls short of the minimum, you do not repay the premium subsidy.

Now, people who didn’t qualify for Medicaid and whose estimated income is coming up short of the poverty level are worried they’ll have to repay thousands of dollars in premium tax credits.

One reader wrote: “What is going to happen? Will he have to pay back all of the money that he received for the tax credit since he no longer qualifies?”

The short answer is no. No repayment will be required. According to a Treasury Department rule, if the insurance marketplace estimates that someone’s income will be between 100 and 400 percent of poverty and it turns out that his income for the year is below the poverty threshold, the individual won’t be on the hook for any premium tax credits he received.

Source: Consumers Whose Income Drops Below Poverty Get Break On Subsidy Payback | Kaiser Health News

Example 5. Determination of Medicaid ineligibility. In November 2014, Taxpayer G applies through the Exchange to enroll in health coverage for 2015. The Exchange determines that G is not eligible for Medicaid and estimates that G's household income will be 140 percent of the Federal poverty line for G's family size for purposes of determining advance credit payments. G enrolls in a qualified health plan and begins receiving advance credit payments. G experiences a reduction in household income during the year and his household income for 2015 is 130 percent of the Federal poverty line (within the Medicaid income threshold). However, under paragraph (c)(2)(v) of this section, G is treated as not eligible for Medicaid for 2015.

Treasury Dept Rule: http://www.ecfr.gov/cgi-bin/text-id...7f83504933fbce&node=se26.1.1_136b_62&rgn=div8

 

[ziggy29]

If you made a good faith effort to accurately estimate your income for an ACA premium subsidy but your actual income falls short of the minimum, you do not repay the premium subsidy.

That's what it looks like. But who defines "good faith"? I assume it's the IRS, so it's best to not go there and tempt the fates, IMO....

 

[MichaelB]

That's what it looks like. But who defines "good faith"? I assume it's the IRS, so it's best to not go there and tempt the fates, IMO....

I think in this case "good faith" is not defined but it is established by the health exchange navigators when they accept the estimate for income. They do have processes for reviewing and criteria for validating the projected income for the year.

 

[gbstack]

So my daughter may have some issues with Medicaid Expansion. Because she is a part time staff member and full time student and currently not a resident of North Dakota she may be denied. I thought it was only based on income but it looks like other requirements may be needed.

The new plan if she is denied is purchase the college plan for $2400 per year or sell off her Facebook shares that have a cost basis of $25.00. The capital gains would be enough so she would qualify for a marketplace plan at $53.00 per month, and reinvest her money from Facebook in index funds.

Any thoughts would be appreciated.

 

[jim584672]

She should apply after she has moved to North Dakota. No such thing as open enrollement period for Medicaid, it is open all year. Also it is retroactive for up to three months, provided she would be eligible in those months.

 

[gbstack]

She should apply after she has moved to North Dakota. No such thing as open enrollement period for Medicaid, it is open all year. Also it is retroactive for up to three months, provided she would be eligible in those months.

She started School/work in North Dakota in July! I guess they just sent down new updated information for students. She may still qualify, just waiting to hear!

What do you think about the other options?