Obamacare Question

[FANOFJESUS]

What happens if you make less than the poverty level and your state did not expand Medicaid? Does the federal goverment pick you up?

 

[rbmrtn]

What happens if you make less than the poverty level and your state did not expand Medicaid? Does the federal goverment pick you up?

No, I think you are in the medicaid coverage gap.

https://www.healthcare.gov/what-if-my-state-is-not-expanding-medicaid/

 

[Onward]

What happens if you make less than the poverty level and your state did not expand Medicaid? Does the federal goverment pick you up?

I believe you're just out of luck.

 

[2B]

What's even more fun is that if your income would have qualified you for medicare in a state that didn't expand the system you are not eligible for a subsidy when buying your own HI on the exchanges. Also, you can still be fined/taxed if you don't purchase HI. Some might say that this aspect was not considered completely before the bill was passed.

 

[shotgunner]

What's even more fun is that if your income would have qualified you for medicare in a state that didn't expand the system you are not eligible for a subsidy when buying your own HI on the exchanges. Also, you can still be fined/taxed if you don't purchase HI. Some might say that this aspect was not considered completely before the bill was passed.

This has resulted from the decision by the Supreme Court that gave states the discretion to accept or not accept the Expanded Medicaid portion of the ACA. It is Expanded Medicaid that provides coverage to those below the subsidy threshold. If your state did not opt to go with Expanded Medicaid you could be in a situation where you still have no insurance and now you are subject to a fine/tax for not having it.

 

[MichaelB]

People not eligible for ACA subsidies because their incomes are too low but also not eligible for Medicaid because the state did not implement the expansion program are not subject to any fines. See here 2013-06-26 - Centers for Medicare & Medicaid Services. Among those exempted are

Individuals who are ineligible for Medicaid solely based on a state’s decision not to implement the Medicaid expansion under the Affordable Care Act. This rule will protect individuals in states that, pursuant to the Supreme Court decision, choose not to expand Medicaid eligibility;

 

[FANOFJESUS]

This looked so good at first now I don't know. That is wild if my income was a little higher I would get a lot of help. Some people want their income to go up for this and some people want it to go down. At first I thought the calculator had a bug in it but maybe not. This what I see
http://kff.org/interactive/subsidy-...s[0][tobacco]=0&child-count=0&child-tobacco=0
I guess it is right? It is kind of funny I guess I am too poor.

 

[donheff]

How about some constructive fraud? Set your income at the appropriate level to get a subsidy and report phantom income for off the table day labor, slot machine winnings, whatever amount it takes to bump you up. At that level the income tax implication must be de minimus. Notwithstanding all the hand wringing over the legality/morality of doing so, would that work?

 

[2B]

How about some constructive fraud? Set your income at the appropriate level to get a subsidy and report phantom income for off the table day labor, slot machine winnings, whatever amount it takes to bump you up. At that level the income tax implication must be de minimus. Notwithstanding all the hand wringing over the legality/morality of doing so, would that work?

A novel approach to tax fraud. Claim extra income! I can only imagine the jury trial for that. I want to be on it!

 

[easysurfer]

My main question is will the Insurance Marketplace offer a better HSA (there's so little if any discussion on HSA with ACA) than I currently have. If the Marketplace does have HSAs, then I'll take a look and compare. If not, then ... I like grandfathers

 

[rbmrtn]

A novel approach to tax fraud. Claim extra income! I can only imagine the jury trial for that. I want to be on it!

I had the same thought. If you under report income to get the subsidy, you have to reconcile it at tax time and pay it back. If you over report income to stay off medicaid and it's reported as misc income like tips, cash etc I don't know what they can verify. Most people try not to report cash income, it would probably blow their minds

 

[NoMoreJob]

My main question is will the Insurance Marketplace offer a better HSA (there's so little if any discussion on HSA with ACA) than I currently have. If the Marketplace does have HSAs, then I'll take a look and compare. If not, then ... I like grandfathers

For my state/area HSA plans are offered. I found them on our state insurance commissioner's website with prices and deductibles (built into names) but have not been able to get further details yet because our state's online exchange is down. I could call in but think I'll just wait until I can get on the site.

I was pleased to see that HSAs were offered as I hadn't seen any discussion of them either so had assumed there would be none. I did call in a couple of weeks ago with a couple of other questions and when I mentioned HSAs they were badmouthed by the obviously ill-informed person on the other end who confused HSAs with catastrophic plans.

 

[easysurfer]

For my state/area HSA plans are offered. I found them on our state insurance commissioner's website with prices and deductibles (built into names) but have not been able to get further details yet because our state's online exchange is down. I could call in but think I'll just wait until I can get on the site.

I was pleased to see that HSAs were offered as I hadn't seen any discussion of them either so had assumed there would be none. I did call in a couple of weeks ago with a couple of other questions and when I mentioned HSAs they were badmouthed by the obviously ill-informed person on the other end who confused HSAs with catastrophic plans.

Thx. That's good to know that HSAs are offered. My state's exchange pointed me to the national marketplace which was down when I was there.

HSAs ..the best kept secret that's been around awhile

 

[FIRE'd@51]

This looked so good at first now I don't know. That is wild if my income was a little higher I would get a lot of help. Some people want their income to go up for this and some people want it to go down. At first I thought the calculator had a bug in it but maybe not. This what I see
Subsidy Calculator | The Henry J. Kaiser Family Foundation
I guess it is right? It is kind of funny I guess I am too poor.

Couldn't you simply withdraw enough from your IRA to put you at 138% of the poverty level? Looks like the subsidies would more than cover the 50% penalty on an early withdrawal. Using the numbers in your link:

(138/81) x 9300 = 15,844 => a 6,544 withdrawal which would incur a penalty 3,272 or 272 per month

Assuming the age shown in your link is correct, you would only have to pay the penalty for 2 years.

Alternatively, you could set up a 72t plan to avoid the penalty, altogether

 

[Fermion]

Wow, I did not even think about gambling winnings. You are supposed to report these on your 1040, even if they are below the level where the casino or track is required to report them ($600?).

Who is going to get audited for saying they won $10,000 over 20 trips to the local casino in the past year playing video poker? I can't imagine a harder case to disprove.

 

[Fermion]

Couldn't you simply withdraw enough from your IRA to put you at 138% of the poverty level? Looks like the subsidies would more than cover the 50% penalty on an early withdrawal. Using the numbers in your link:

(138/81) x 9300 = 15,844 => a 6,544 withdrawal which would incur a penalty 3,272 or 272 per month

Assuming the age shown in your link is correct, you would only have to pay the penalty for 2 years.

Alternatively, you could set up a 72t plan to avoid the penalty, altogether

Or even better, do a IRA to Roth conversion (this boosts your MAGI) then five years later you can take out the contribution from the conversion with no penalty, tax or minimum distribution requirement like 72t would have.

 

[Martha]

I talked to someone at the federal exchange and he said that actually it remains unclear what will happen if your income falls below the subsidy level yet you are not eligible for medicaid, either because you did not know your income was too low until year end, or because you are in a state that refused to expand medicaid.

So, we can't yet assume that the subsidy will automatically disappear if your income drops too low.

Unfortunately, if in fact it remains a hole in the system the odds of it getting fixed may not be good.

(Hi everyone!)

 

[REWahoo]

(Hi everyone!)

First T-Al, then Martha.

This must be homecoming week.

 

[FANOFJESUS]

Couldn't you simply withdraw enough from your IRA to put you at 138% of the poverty level? Looks like the subsidies would more than cover the 50% penalty on an early withdrawal. Using the numbers in your link:

(138/81) x 9300 = 15,844 => a 6,544 withdrawal which would incur a penalty 3,272 or 272 per month

Assuming the age shown in your link is correct, you would only have to pay the penalty for 2 years.

Alternatively, you could set up a 72t plan to avoid the penalty, altogether

Only have a small roth.

 

[donheff]

First T-Al, then Martha.

This must be homecoming week.

Hi Martha.

 

[NoMoreJob]

Thx. That's good to know that HSAs are offered. My state's exchange pointed me to the national marketplace which was down when I was there.

HSAs ..the best kept secret that's been around awhile

Yes and contributions to your HSA account reduce your MAGI for ACA purposes.

http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf

 

[fh2000]

Yes and contributions to your HSA account reduce your MAGI for ACA purposes.

http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf

I see Tuition and Fees are deducted out of MAGI. Will this include your dependents' Tuition and fees?

 

[MichaelB]

I talked to someone at the federal exchange and he said that actually it remains unclear what will happen if your income falls below the subsidy level yet you are not eligible for medicaid, either because you did not know your income was too low until year end, or because you are in a state that refused to expand medicaid.

So, we can't yet assume that the subsidy will automatically disappear if your income drops too low.

Unfortunately, if in fact it remains a hole in the system the odds of it getting fixed may not be good.

(Hi everyone!)

Hi Martha. Thanks for stopping by!

What we do know is there is no automatic mid year income reconciliation, and the only scheduled reconciliation occurs after the year has ended and the tax return is filed. So, if he exchange accepts the taxpayer's projected income and that qualifies for a policy, there is really nothing that would change that until it is time for renewal.

If tax credits and premium assistance were extended, the taxpayer is later deemed ineligible and the taxpayer's income is less than 200% of the FPL, reimbursement is limited to $300 per individual, $600 joint filing. That was written for exchange eligible policies, but is the default for this Medicaid ineligible situation until replaced with a more specific provision.

 

[Martha]

If tax credits and premium assistance were extended, the taxpayer is later deemed ineligible and the taxpayer's income is less than 200% of the FPL, reimbursement is limited to $300 per individual, $600 joint filing. That was written for exchange eligible policies, but is the default for this Medicaid ineligible situation until replaced with a more specific provision.

Thanks. This isn't consistent with what I was told. Do you have a place I can find this info?

 

[MichaelB]

Thanks. This isn't consistent with what I was told. Do you have a place I can find this info?

Not really. Mostly things I have read. The $300/$600 limit to premium credit is probably not what you are referring to, but can be found here http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/income-verification-8-5-2013.pdf

The key to the issue of someone living in a state that has not expanded medicaid overstating their income (@<100% FPL) to gain subsidized access to the exchange policies is more bark than bite. This is the most recent (at least that I have seen) paper on income verification http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/income-verification-8-5-2013.pdf
Income must be documented and verified before subsidies are extended. This is done with prior year tax returns and employer pay records. If verification does not take place the policy and credits are only extended for 90 days and must be revisited. So, if there is verification and approval upfront and income changes during the year, it will be detected by voluntary self-reporting or subsequent income tax filing, but no other process is in place, and no penalty for not reporting the change.