Another ACA question

[Refresher]

Hi ER,ers, thanks for all of great info on the forum.

Have a ACA question:


Seems like some of the states may not offer the Medicaid expansion although that can change before year end.


So for those in such states that have 2012 income which is below the Medicaid eligibility maximum:


Will you be able to buy into the exchanges?
If so will you be eligible for any subsidies if your income is below the 400% level?


Anyone know?

 

[MichaelB]

Hi ER,ers, thanks for all of great info on the forum.

Have a ACA question:


Seems like some of the states may not offer the Medicaid expansion although that can change before year end.


So for those in such states that have 2012 income which is below the Medicaid eligibility maximum:


Will you be able to buy into the exchanges?
If so will you be eligible for any subsidies if your income is below the 400% level?


Anyone know?

Hi Refresher. To buy a policy on the exchange one must be a US citizen or legal visitor, and also be a resident of the state. To be eligible for premium assistance one must have income between 100% - 400% of the federal poverty level. Less than that one must qualify for Medicaid or another healthcare program.

 

[Onward]

Will you be able to buy into the exchanges?

From what I've read: yes, Medicaid recipients will be able to get insurance via the exchanges.

 

[Refresher]

From what I've read: yes, Medicaid recipients will be able to get insurance via the exchanges.

Latest info I received
Anyone over 100% of poverty level can buy into exchanges. Income determines subsidy.
Under 100% in states not participating in Medicaid expansion may not be able to get insurance.

Has it been determined if the amount converted from IRA to Roth in 2012 which triggered a tax
Is counted towards MAGI for ACA purposes?

Ex. dividends and interest. $4000
rental income. $4000
capital loss. (3000)
roth conversion amt $10000
MAGI. $15000 ?

 

[pb4uski]

2012 really doesn't count. The credits you receive in 2014 will be initially based on the income you indicate when you apply as I understand it. When you do your 2014 tax return (in early 2015) you will determine the subsidy your are entitled to in 2014 based on your actual 2014 O-MAGI. If you received more subsidy than you should have you pay the difference back. If you deserved more subsidy than you receive then they send you the difference.

Conceptually, it works similar to withholding and estimated taxes where you pay based on what you think is going to happen and then get a refund or make an additional payment based on your actual income.

To answer your question, Roth conversions are included in AGI, so they are also included in O-MAGI.

 

[CountryBoy]

I'm glad someone asked this, I've been wondering about it too; I'm single, 51, was planning on early retirement at 55, 56. I live in Pennsylvania which isn't expanding their Medicaid.

I was planning on living on savings/personal investments for 4-5 years, then begin withdraws from my 401K, then begin collecting SS at 62.

I was going to buy health insurance through my state's exchange, but according to that Kaiser Family calculator, I won't be earning enough to even qualify for the ACA subsidy.

Since we're allowed to withdraw from our 401K early (the year you turn 55) and my company does allow withdrawls of your choosing when you're eligible, if I withdrew 15K annually for example, that would be taxable income and qualify me for the ACA subsidies, correct?

 

[pb4uski]

Yes, but a lot can happen over the next 4 years.

Some people are doing just as you describe - doing enough withdrawals so they qualify for ACA and don't qualify for Medicaid.