Eligible for Medicaid, Paying for Bronze?

[kevink]

From the many previous posts here on ACA levels and subsidies it would appear we're "alone in the wilderness" here, but here's my question. As frugal ER types a long way from Social Security age with tax-efficient portfolios our taxable income has been well below Federal Poverty levels for quite awhile (we've lived in low-cost locales in the U.S. and Mexico and done fine on less than 24K a year in actual expenses, with annual AGI less than half of that).

We live in a State that's opted for the Medicaid expansion, but there's a huge backlog of demand (over 300,000 childless adults due to be added to the rolls in 2014) and between that and the many doctors and, I presume, hospitals, who don't accept Medicaid patients it seems like the Bronze level plans under ACA make much more sense. My question is though, can I/we "pay up" for such a plan by overstating our AGI (looks like about 24K a year for a childless couple would work fine)? A strange problem to have, but these are strange times in health care.

 

[haha]

This is likely fraud. Can't you jigger your income a bit to actually meet the requirement?

 

[ziggy29]

The only two legal things that come to mind (assuming you have the option to do it and it won't wreck your retirement) are Roth conversions and using Rule 72(t) on an IRA to generate more taxable income. Well, OK, a part-time job is a third option but it may be one you don't want to entertain.

[Edit to add: You could also change your portfolio to throw off more taxable income or capture some capital gains. At some point, though, that becomes penny-wise and pound-foolish.]

 

[susswein]

I'm in the same position and plan to increase my taxable income by selling appreciated assets and then buying them back (harvesting the gain and increasing my cost basis) and doing Roth conversions. The nice thing about roth conversions is that you can convert more than necessary before the end of the calendar year and then have until october 15th (if you file extension) to recharacterize back anything you need, thereby fine tuning your taxable income.

 

[MichaelB]

Just about anyone can buy (unsubsidized ) insurance on the exchange. Simply overstating income is not likely to work, to be eligible for subsidies income must be verified, and if projected income depends on a change in circumstances, it will need to be revisited and confirmed after 90 days. Here's a CMS FAQ on that. http://www.healthreformgps.org/wp-content/uploads/income-verification-8-6.pdf

 

[ziggy29]

Right. You don't *have* to use Medicaid, but that's the only mechanism for receiving a subsidy below the 133% of FPL income level (in states that expanded Medicaid). You can still pay for an ACA-compliant plan on the market, but it won't be subsidized at all. And that could be quite painful with an income that low, unless you can live off of assets for many, many years.

Anyone (under 65) can buy an ACA plan directly from an insurer. In fact, with no subsidies in play it might be preferable to using the Exchange anyway.

 

[haha]

Anyone (under 65) can buy an ACA plan directly from an insurer. In fact, with no subsidies in play it might be preferable to using the Exchange anyway.

That appears to be what Dirk did. But judging from the threads here that I have read, coverage without a taxpayer subsidy is not a big seller among our members.

Ha

 

[MichaelB]

Subsidies are possible even when the policy is acquired directly from some insurers or alternate exchanges. Income verification still needs to be carried out by the exchange function, but some issuers, most notably BCBS, have the CMS authorization and a SW interface that (apparently) is working. http://www.in.gov/idoi/files/agent-broker-5-1-2013.pdf

 

[ziggy29]

Subsidies are possible even when the policy is acquired directly from some insurers or alternate exchanges. Income verification still needs to be carried out by the exchange function, but some issuers, most notably BCBS, have the CMS authorization and a SW interface that (apparently) is working. http://www.in.gov/idoi/files/agent-broker-5-1-2013.pdf

Right, but I guess my point is that if you *know* no subsidy will be in play for you, you might as well avoid the Federal Exchange and buy somewhere else where the site will *work* and you might have more coverage options and more insurers to choose from.

 

[MichaelB]

Right, but I guess my point is that if you *know* no subsidy will be in play for you, you might as well avoid the Federal Exchange and buy somewhere else where the site will *work* and you might have more coverage options and more insurers to choose from.

That's what I am doing.

 

[kevink]

Thanks very much everyone!

 

[2B]

As I understand it, subsidies are not available for anyone that would qualify or would have qualifiedf or Medicaid if the state expanded coverage. If you want a health care plan other than Medicaid, you can purchase it although going through the exchanges may have software that forces you out of the purchase options.

If you can manipulate your income up, you can certainly go for the subsidy.

 

[donheff]

Just curious, can doctors accept Medicare but refuse Medicaid?

 

[jon-nyc]

Yes

 

[kevink]

Here in AZ insurers are so desperate to sign up the (apparently) few healthy people remaining that I could buy an ultra high-deductible (12.5K each!) plan for the two of us (healthy, 50 & 57 respectively) for $175 a month total with the rate guaranteed through 12/2014 (i.e. with underwriting and a 2013 effective date). The (roughly) equivalent plan as of 1/1/14 is $508 a month. I think that says it all about just how in the dark insurers are about how to price things at this point.

Meanwhile if we were to choose to live in New Mexico (where we've lived before) I would have no concern about going the Medicaid route. I've yet to see a doctor or clinic that doesn't take it there (the State as a whole is so poor and so into aid programs of every description that they basically kiss your feet if you come in saying "I have only high deductible insurance but can pay cash if you give me a discount."

 

[rockymountainhigh]

Just as a side note two of my children are eligible for CHP+ ( Child Health Plan Plus ) which is a public health insurance for children. I opted not to put them on CHP+ that due to the aforementioned issues with Medicaid. So instead of a subsidy calculation for a family of 4 we can only use a family of 2.

 

[oldtrig]

Just curious, can doctors accept Medicare but refuse Medicaid?
They do at the doctor I use. I have seem them turn away more than one. Not sure why? It is actually kind of sad but that's how it is here. oldtrig

 

[NW-Bound]

Here in AZ insurers are so desperate to sign up the (apparently) few healthy people remaining that I could buy an ultra high-deductible (12.5K each!) plan for the two of us (healthy, 50 & 57 respectively) for $175 a month total with the rate guaranteed through 12/2014 (i.e. with underwriting and a 2013 effective date). The (roughly) equivalent plan as of 1/1/14 is $508 a month. I think that says it all about just how in the dark insurers are about how to price things at this point.

Meanwhile if we were to choose to live in New Mexico (where we've lived before) I would have no concern about going the Medicaid route. I've yet to see a doctor or clinic that doesn't take it there (the State as a whole is so poor and so into aid programs of every description that they basically kiss your feet if you come in saying "I have only high deductible insurance but can pay cash if you give me a discount."

Last month, our insurer raised the rate of our pre-ACA HSA plan to $550 (IIRC) for 2 of us (age 55+). The deductible has always been $10K/family.

In 2007, when we bought this policy with two young adult children included, the insurer never mentioned anything about underwriting. All they asked for was proof of previous insurance, which we supplied from our Cobra coverage.

On availability of care providers, I happened to read a blog of a person who was on a state high-risk pool, and had a tough time finding doctors. If so, what's the point of having coverage if you cannot get help?

Regarding Medicare and Medicaid, there's obviously a payment difference between the two. This is new to me.