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Medicaid to PPACA?
Old 09-09-2013, 11:06 AM   #1
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Medicaid to PPACA?

I'm in a state that has embraced the expanded Medicaid for 2014. Medicaid in our state is a decent system and actually uses some of our current doctors.

Currently We're living off of our savings and investments and can easily control our MAGI income. We're also in our mid to late 50's.

So why wouldn't we choose the Medicaid option for 2014? It would appear that we can easily convert to a policy on the exchange at anytime during the year if we become really sick or find that Medicaid isn't serving our needs by just doing a large enough Roth conversion to disqualify ourselves from Medicaid and then still be qualified for a PPACA subsidy.

Am I missing something obvious?

Before someone jumps in upset about this "gaming" of the system, I find this no different then a millionaire taking full advantage of the tax code to minimize their taxes. We didn't write the law, we're just going to follow the letter of the law.
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Old 09-09-2013, 12:47 PM   #2
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I personally think I'd rather pay $100 a month and have much more choice in doctors.

However, in doing a little research about subsidies, if you you really want to game the system, there are all sorts of other subsidy programs, at least in my state, where if you qualify for Medicaid you automatically qualify for the other low income programs. Otherwise these other programs have income tests like counting untaxed income in retirement accounts or asset tests, that would rule out many well off retirees.

I am not going to do that but I have been thinking about volunteering at a nonprofit that matches up actual low income people with these kinds of programs. I suspect from the posts on money saving forums that many low income families do not even know these programs exist. And many also do not seem to have any idea about the ACA, even the families that may greatly benefit from it.
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Old 09-09-2013, 06:14 PM   #3
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Originally Posted by Spokane2303 View Post
So why wouldn't we choose the Medicaid option for 2014? It would appear that we can easily convert to a policy on the exchange at anytime during the year if we become really sick or find that Medicaid isn't serving our needs by just doing a large enough Roth conversion to disqualify ourselves from Medicaid and then still be qualified for a PPACA subsidy.

Am I missing something obvious?
Are you sure you can convert outside of the open enrollment period? I belive there has to be some sort of qualifying event to sign up for an exchange policy outside of open enrollment. I don't know what all the qualifying events are however.
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Old 09-09-2013, 06:38 PM   #4
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A Roth IRA Conversion would be a qualifying event due to a change in income making you no longer qualified for Medicaid?

That is how I see it?
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Old 09-09-2013, 06:41 PM   #5
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Doesn't Medicaid check your assets to stop these type of shenanigans?
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Old 09-09-2013, 08:54 PM   #6
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Not under the new law in 2014. No asset limit or check, strictly income calculation using MAGI.

After thinking about it and looking at the providers that will be offering coverage in our region on the exchange, we're leaning towards buying our insurance on the exchange and controlling our MAGI income to maximize the subsidy.

The Medicaid option does remain an intriguing option that I think might be considered by more of us who retire early in the future.
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Old 09-10-2013, 09:30 AM   #7
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The Medicaid option does remain an intriguing option that I think might be considered by more of us who retire early in the future.
I am glad to see someone else is thinking along these same lines. Frankly, I was hesitant to pose the question here before investigating further both because I was afraid that I was missing something obvious and for fear of general gaming the system backlash.

I do not have the same fear of Medicaid that many seem to posses. I worked in a doctor's office many years ago where Medicaid patients made up a majority of the clientele; and, their level of care was the same as private insurance from what I could tell, actually better in some cases.

While I have not formed any definite plans, I could see myself on the Medicaid rolls occasionally, especially when I am traveling extensively outside the USA and not planning to utilize domestic healthcare services anyway.
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Old 09-10-2013, 09:55 AM   #8
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Not under the new law in 2014. No asset limit or check, strictly income calculation using MAGI.
Just to clarify, each state is free to choose to implement the Medicaid expansion or not. Some have chosen to continue with both asset and income requirements and limitations, which reduces the eligibility as it is being discussed in this thread. Here is a KFF link on current status by state Status of State Action on the Medicaid Expansion Decision, as of September 3, 2013 | The Henry J. Kaiser Family Foundation
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Old 10-07-2013, 06:27 PM   #9
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Just to clarify, each state is free to choose to implement the Medicaid expansion or not. Some have chosen to continue with both asset and income requirements and limitations, which reduces the eligibility as it is being discussed in this thread. Here is a KFF link on current status by state Status of State Action on the Medicaid Expansion Decision, as of September 3, 2013 | The Henry J. Kaiser Family Foundation
Washington State no longer has asset/resource limits for "newly eligible" Medicaid adults under MAGI methodology. See #26: Medicaid Expansion 2014 Frequently Asked Questions

I may go this route. I may have no choice: I don't see how I'm gonna have MAGI over $10-15K in 2014 without getting a part-time job. Hey!? No premium, deductible, co-pays or OOP max, right?
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