Qualifying for an ACA subsidy

[meleana]

Starting March 1st, I am enrolled in an ACA plan, BUT they need income documentation. My husband is on Medicare and I am no longer working, but not yet Medicare eligible. Husband retired 12/31/19. No SS or pensions and living off savings for 2020. Just moved to NH from NY.



I somehow found myself a broker who deals with the marketplace through an ex NH navigator (NH lost it's funding for navigators). The broker wrote a letter of explanation on my behalf. No documents provided as of right now. He said they probably won't even look at it until April.


The problem is by that time I would have put my retiree medical insurance on suspend (have to do that 3/2) and if the ACA denies me the subsidies then I would NOT be able to go back onto the retiree medical and the ACA plan premium would be double the retiree medical!!! In essence I would have "screwed myself"!

So I am losing sleep over this. It would be one thing if I could keep the retiree medical active by paying the premiums until the government decided I am eligible for the subsidies, but I do not think that is allowed. (I had to apply for the ACA plan now because you only have 60 days from the date of your move to apply, so the most I could do is change the enrollment date to 4/1 instead of 3/1- I suppose).

I have left a message for the broker but he has not yet returned my call and our Financial Advisor is not familiar with it in this state as he is in NY. This is what I was trying to avoid and why I was resistant to going on an ACA plan in the first place, but he encouraged me to do it. Of course, a $40 per month premium with no deductible is very enticing compared with a $545 per month premium and a high deductible. But there is something to be said for peace of mind too.

I had enough stress dealing with my husband's Medicare plans (2x in 2 months due to the move!) and I want this all to be over with and not hanging over my head for months. Should I just stay on the retiree medical, which is a sure thing, though expensive? That is what I am leaning towards just because trying to prove income with the bureaucracy will be a nightmare since last year we had income and this year we will not.


I need to decide NOW as 3/1 is around the corner! Any help appreciated.

 

[pb4uski]

Others who are more knowledgable will chime in, but I think that even if they don't approve you for premium tax credits to reduce you monthly premiums for 3/1 and beyond, at worst you pay the full premium and get the subsidy as a refund when you file you 2020 income taxes in early 2021... so I would stay the course presuming that you have sufficient money available to fund the full premium until you get your refund.

So probably no need to stress about it.

I would have thought that they would provide PTCs based on what you tell them you income for 2020 will be at least until they decline you, but perhaps it doesn't work that way. And I'm sure there are probably avenues of appeal if they do deny you.

 

[meleana]

Others who are more knowledgable will chime in, but I think that even if they don't approve you for premium tax credits to reduce you monthly premiums for 3/1 and beyond, at worst you pay the full premium and get the subsidy as a refund when you file you 2020 income taxes in early 2021... so I would stay the course presuming that you have sufficient money available to fund the full premium until you get your refund.

So probably no need to stress about it.

I would have thought that they would provide PTCs based on what you tell them you income for 2020 will be at least until they decline you, but perhaps it doesn't work that way. And I'm sure there are probably avenues of appeal if they do deny you.

What is PTC's? They did tell me what the subsidies were to be based on our projected income.

 

[scrabbler1]

I have been writing about my dealings with the NY Marketplace this year regarding my trying to qualify again for an ACA premium subsidy. I had to wait until I received my 1099s at the end of January, but once I did and uploaded them along with some explanatory comments on them projecting my income for 2020 and why it would be much less than in 2019 (when I failed to qualify for any subsidies), they quickly agreed with my income projection and granted my temporary (until April 2) subsidy as a permanent one for the whole year.


If they had rejected my request, what would have happened was that I would pay the full premium for the entire year then reconcile it on my 2020 federal income tax return and get a huge refund, as pb4uski suggested.


I find it hard to believe that the NY Marketplace would wait until April before reviewing your income verification documents. They took maybe 10 days to review mine, comments and all. And even if they deny you, as I thought they would do for me, you would still have an appeal process you could do over the phone.


BTW PTC = Premium Tax Credits.

 

[meleana]

I have been writing about my dealings with the NY Marketplace this year regarding my trying to qualify again for an ACA premium subsidy. I had to wait until I received my 1099s at the end of January, but once I did and uploaded them along with some explanatory comments on them projecting my income for 2020 and why it would be much less than in 2019 (when I failed to qualify for any subsidies), they quickly agreed with my income projection and granted my temporary (until April 2) subsidy as a permanent one for the whole year.


If they had rejected my request, what would have happened was that I would pay the full premium for the entire year then reconcile it on my 2020 federal income tax return and get a huge refund, as pb4uski suggested.


I find it hard to believe that the NY Marketplace would wait until April before reviewing your income verification documents. They took maybe 10 days to review mine, comments and all. And even if they deny you, as I thought they would do for me, you would still have an appeal process you could do over the phone.


BTW PTC = Premium Tax Credits.

No- this is not NY. We live in NH.

 

[pb4uski]

What is PTC's? They did tell me what the subsidies were to be based on our projected income.

PTCs are premium tax credits.... where you get your subsidy each month as a reduction to your health insurance premium... in fact they may actually be called advanced premium tax credits since they are paid in advance of them knowing what your income is. In your tax return for the year of the credits you will calculate what credits you were entitled to based on your actual income for the year and then the difference between what was advanced and what you were entitled to will be settled as part of your refund or balance due.

Bottom line, if you have enough money to pay the premiums even if they deny you application you'll get a refund so there is no need to fret and lose sleep about it.

 

[meleana]

Thank you. This does make me feel a bit better knowing it can be reconciled next year when we file our taxes. I will be Medicare eligible beginning 6/1/21. I assume even if we did go just a little bit higher than we projected for income (24,000) (but will try not to, of course) we would still get some tax credits anyway.


Very scary all this health insurance stuff. I hate it. Doesn't help that I am a worry wart to the max either!

 

[pb4uski]

...Very scary all this health insurance stuff. ....

Part of the reason why I am more open to some sort of public option or Medicare for All or single payer approach than I would have been 9 years ago... the system is broken and a big change is needed.

 

[MRG]

Part of the reason why I am more open to some sort of public option or Medicare for All or single payer approach than I would have been 9 years ago... the system is broken and a big change is needed.

+1000

I see local political adds suggesting we shouldn't fix anything because what we have is working so well. They're provided by the insurance companies.

While I'm grateful for the ability to buy insurance now, it's a great improvement over what there was pre ACA but a desired end-state? Not hardly.

 

[Which Roger]

Thank you. This does make me feel a bit better knowing it can be reconciled next year when we file our taxes. I will be Medicare eligible beginning 6/1/21. I assume even if we did go just a little bit higher than we projected for income (24,000) (but will try not to, of course) we would still get some tax credits anyway.


Very scary all this health insurance stuff. I hate it. Doesn't help that I am a worry wart to the max either!

Grab your TurboTax or other favorite tax program and complete some practice returns, varying your income, to understand better how your ACA costs will change based on income changes. I did that and it was very enlightening and also very reassuring.

 

[meleana]

Grab your TurboTax or other favorite tax program and complete some practice returns, varying your income, to understand better how your ACA costs will change based on income changes. I did that and it was very enlightening and also very reassuring.

Thanks but no thanks. I have always done our taxes (on Tax Act) but this year I am handing it over to an accountant as I have been on overload with selling our home and downsizing and buying this new one and moving out of state, plus handling my husband's Medicare and retirement stuff twice and this whole new living without a paycheck thing in just a few months. I am so done.


I played around with income on the Marketplace website initially to see what the subsidies would be for various income levels, That's enough for me. I'm still waiting for the retirement fun to begin. Two years and no where in sight.

 

[VanWinkle]

Part of the reason why I am more open to some sort of public option or Medicare for All or single payer approach than I would have been 9 years ago... the system is broken and a big change is needed.

I disagree that it is any different than it was 9 years ago. As an early retiree, it is much easier to get reasonably priced plans if you are able to control your income for the few years prior to Medicare. The ACA in it's current form works for those people that take the time to learn all of the tax laws and MAGI limits related to the plan. Let's give up having to learn about the current system and just punt it all is not that great of a plan in my opinion, and it is just an opinion.
I did just go on Medicare Nov 1st and was very satisfied with the ACA plan I had for 2 years.

 

[GenXguy]

In addition to the PCT, there are CSR (Cost Sharing Reductions). If your income is low enough, less than 250% of the poverty level, even better if less than 200% of the poverty level, you can get a silver plan with a lower deductible and out of pocket. However, you need to get your income estimated in advance as you can't get CSR in a lump sum after you file taxes for the year as you can with the PCT.

 

[pb4uski]

I disagree that it is any different than it was 9 years ago. As an early retiree, it is much easier to get reasonably priced plans if you are able to control your income for the few years prior to Medicare. The ACA in it's current form works for those people that take the time to learn all of the tax laws and MAGI limits related to the plan. Let's give up having to learn about the current system and just punt it all is not that great of a plan in my opinion, and it is just an opinion.
I did just go on Medicare Nov 1st and was very satisfied with the ACA plan I had for 2 years.

I appreciate your openmindedness.

I guess that we'll just agree to disagree.

 

[meleana]

In addition to the PCT, there are CSR (Cost Sharing Reductions). If your income is low enough, less than 250% of the poverty level, even better if less than 200% of the poverty level, you can get a silver plan with a lower deductible and out of pocket. However, you need to get your income estimated in advance as you can't get CSR in a lump sum after you file taxes for the year as you can with the PCT.

I know what our income will be in advance as we can control it. We are living on cash. Based on our estimated income ($24,000- the lowest we can go before being thrown onto Medicaid), I would be getting full cost sharing also. A Silver plan and a premium of $40 per month. So you are saying that if for some reason my letter of explanation is not accepted and I have to pay full premiums, then when I file my taxes in 2020, I would get a lump sum refund of just the difference in the premiums, but not the cost sharing portion? This I do not understand. How do they calculate that one? Based on my usage? What if I never go to a doctor the whole year? (not likely- but just for example)

 

[Dtail]

I know what our income will be in advance as we can control it. We are living on cash. Based on our estimated income ($24,000- the lowest we can go before being thrown onto Medicaid), I would be getting full cost sharing also. A Silver plan and a premium of $40 per month. So you are saying that if for some reason my letter of explanation is not accepted and I have to pay full premiums, then when I file my taxes in 2020, I would get a lump sum refund of just the difference in the premiums, but not the cost sharing portion? This I do not understand. How do they calculate that one? Based on my usage? What if I never go to a doctor the whole year? (not likely- but just for example)

Is the Medicaid level in NH at 133% of FPL?

 

[meleana]

Is the Medicaid level in NH at 133% of FPL?

I have no idea about percentages. I just played around on the website with different income levels and $24,000 was the lowest I could go before getting the message to call regarding Medicaid.

 

[cathy63]

I know what our income will be in advance as we can control it. We are living on cash. Based on our estimated income ($24,000- the lowest we can go before being thrown onto Medicaid), I would be getting full cost sharing also. A Silver plan and a premium of $40 per month. So you are saying that if for some reason my letter of explanation is not accepted and I have to pay full premiums, then when I file my taxes in 2020, I would get a lump sum refund of just the difference in the premiums, but not the cost sharing portion? This I do not understand. How do they calculate that one? Based on my usage? What if I never go to a doctor the whole year? (not likely- but just for example)

Yes, New Hampshire has expanded Medicaid. 138% of FPL (not 133%) for a family of 2 is $23,336. If you were lowering your income by $1000 at a shot, that's why $24K gives you ACA and $23K gives you Medicaid.

If you have to pay the full premiums and don't get cost sharing, then there's no way to recover the cost sharing payments that you would have gotten after the fact. Here's a page on how cost sharing is calculated: https://www.healthreformbeyondtheba...in-marketplace-health-insurance-plans-part-2/ It is not something you can figure on your own.

 

[GenXguy]

I know what our income will be in advance as we can control it. We are living on cash. Based on our estimated income ($24,000- the lowest we can go before being thrown onto Medicaid), I would be getting full cost sharing also. A Silver plan and a premium of $40 per month. So you are saying that if for some reason my letter of explanation is not accepted and I have to pay full premiums, then when I file my taxes in 2020, I would get a lump sum refund of just the difference in the premiums, but not the cost sharing portion? This I do not understand. How do they calculate that one? Based on my usage? What if I never go to a doctor the whole year? (not likely- but just for example)

If you don't rack up much in deductibles and co-pays because you don't use healthcare services much, it won't matter much about the CSR. But, if you do, you won't be refunded.

More info on CSR can be found:

https://obamacarefacts.com/insurance-exchange/cost-sharing-reduction-subsidies-csr/

https://www.healthreformbeyondtheba...in-marketplace-health-insurance-plans-part-2/

 

[meleana]

Yes, New Hampshire has expanded Medicaid. 138% of FPL (not 133%) for a family of 2 is $23,336. If you were lowering your income by $1000 at a shot, that's why $24K gives you ACA and $23K gives you Medicaid.

If you have to pay the full premiums and don't get cost sharing, then there's no way to recover the cost sharing payments that you would have gotten after the fact. Here's a page on how cost sharing is calculated: https://www.healthreformbeyondtheba...in-marketplace-health-insurance-plans-part-2/ It is not something you can figure on your own.

But it states this in the link you provided:

Does someone have to take the premium tax credit in advance in order to receive the cost-sharing reduction?

No. To get the cost-sharing reductions, a person only needs to be eligible for the premium tax credit. The person can still get the cost-sharing reductions if they choose to wait until they file their taxes to receive the premium tax credits.

 

[SecondCor521]

But it states this in the link you provided:

Does someone have to take the premium tax credit in advance in order to receive the cost-sharing reduction?

No. To get the cost-sharing reductions, a person only needs to be eligible for the premium tax credit. The person can still get the cost-sharing reductions if they choose to wait until they file their taxes to receive the premium tax credits.

I think getting the cost sharing reductions (CSRs) would require that the NH authorities accept your estimated income as being low enough to qualify for them (under 250%, 200%, or 150% of FPL for your family size).

CSRs are on Silver plans only. My understanding is that the insurance companies craft their Silver plans, then usually modify the deductibles and OOP maximums in order to create the CSR versions of those Silver plans. In order to get CSRs, you have to buy a CSR plan. The only way (I think) the exchange would let you do that is if your income level qualified you for them.

My state exchange has a "CSR eligible" checkbox that I can select. Yours probably will as well.

As I think has already been stated, once you buy the CSR eligible Silver plan and you utilize whatever services you utilize during the year, you either get a benefit from having a lower deductible or OOP maximum or not. It is not reconciled on your taxes in the same way that the PTC is. If your income ends up being higher than the estimate, nobody from the insurance company goes back and refigures what should have been done regarding your benefits. It's just water under the bridge, so to speak.

 

[RetiredAndLovingIt]

I know what our income will be in advance as we can control it. We are living on cash. Based on our estimated income ($24,000- the lowest we can go before being thrown onto Medicaid), I would be getting full cost sharing also. A Silver plan and a premium of $40 per month. So you are saying that if for some reason my letter of explanation is not accepted and I have to pay full premiums, then when I file my taxes in 2020, I would get a lump sum refund of just the difference in the premiums, but not the cost sharing portion? This I do not understand. How do they calculate that one? Based on my usage? What if I never go to a doctor the whole year? (not likely- but just for example)

Wouldn't a Roth Conversion solve your problem?
You probably know this already but "Income" has to be taxable income. This was a shock for me my first year. I had estimated my income at 10K in taxable CD Interest and the remaining 15K was to be "cash" pulled from my savings account which was after tax money. Luckily Covered California needed documentation of my estimate and let me know after tax money was not considered income. In a panic I pulled 15K from my IRA account to resolve the issue and was approved immediately when I faxed Covered California the distribution paperwork along with my 1099-INT forms for the previous year. Meantime I learned about Roth Conversions on this website and was able to redeposit the 15K back into my bank as a Roth Conversion and live off my cash as originally planned.

 

[meleana]

Wouldn't a Roth Conversion solve your problem?
You probably know this already but "Income" has to be taxable income. This was a shock for me my first year. I had estimated my income at 10K in taxable CD Interest and the remaining 15K was to be "cash" pulled from my savings account which was after tax money. Luckily Covered California needed documentation of my estimate and let me know after tax money was not considered income. In a panic I pulled 15K from my IRA account to resolve the issue and was approved immediately when I faxed Covered California the distribution paperwork along with my 1099-INT forms for the previous year. Meantime I learned about Roth Conversions on this website and was able to redeposit the 15K back into my bank as a Roth Conversion if not I would have been placed on MediCal similar to Medicaid

Right now the interest and dividends on our money and a RMD on an inherited IRA will be at about $21,000 or less based on last year. So yes, Roth conversions would also help us get to the $24,000 mark or simply just withdrawing some money from our IRA’s.
But my concern is that they will not accept my letter of explanation on income for the subsidies or cost sharing for whatever stupid reason and I will be stuck with high premiums and no cost sharing until we file our taxes and having to lay out all that money, when I could have just stayed on my retiree medical plan and not deal with all this craziness.

 

[SecondCor521]

Right now the interest and dividends on our money and a RMD on an inherited IRA will be at about $21,000 or less based on last year. So yes, Roth conversions would also help us get to the $24,000 mark or simply just withdrawing some money from our IRA’s.
But my concern is that they will not accept my letter of explanation on income for the subsidies or cost sharing for whatever stupid reason and I will be stuck with high premiums and no cost sharing until we file our taxes and having to lay out all that money, when I could have just stayed on my retiree medical plan and not deal with all this craziness.

I hear your concern, and I guess it is partly because you haven't dealt with the ACA before.

I guess I would encourage you to try to estimate the probability that your submittal to the NH ACA folks will be declined. You might look for data on that, or you might call and ask the ACA folks that question, or you might look for anecdotes.

Personally, I do not know anyone who has had their well-reasoned application for ACA subsidies declined. It may happen, but I've never heard of it. So I think the chance of any problem is very very low.

I do think (because I've seen evidence of it) that various ACA authorities vary in how stringent they are in evaluating submittals, so you may want to limit your investigation to NH data.

 

[finnski1]

Starting March 1st, I am enrolled in an ACA plan, BUT they need income documentation. My husband is on Medicare and I am no longer working, but not yet Medicare eligible. Husband retired 12/31/19. No SS or pensions and living off savings for 2020. Just moved to NH from NY.



I somehow found myself a broker who deals with the marketplace through an ex NH navigator (NH lost it's funding for navigators). The broker wrote a letter of explanation on my behalf. No documents provided as of right now. He said they probably won't even look at it until April.


The problem is by that time I would have put my retiree medical insurance on suspend (have to do that 3/2) and if the ACA denies me the subsidies then I would NOT be able to go back onto the retiree medical and the ACA plan premium would be double the retiree medical!!! In essence I would have "screwed myself"!

So I am losing sleep over this. It would be one thing if I could keep the retiree medical active by paying the premiums until the government decided I am eligible for the subsidies, but I do not think that is allowed. (I had to apply for the ACA plan now because you only have 60 days from the date of your move to apply, so the most I could do is change the enrollment date to 4/1 instead of 3/1- I suppose).

I have left a message for the broker but he has not yet returned my call and our Financial Advisor is not familiar with it in this state as he is in NY. This is what I was trying to avoid and why I was resistant to going on an ACA plan in the first place, but he encouraged me to do it. Of course, a $40 per month premium with no deductible is very enticing compared with a $545 per month premium and a high deductible. But there is something to be said for peace of mind too.

I had enough stress dealing with my husband's Medicare plans (2x in 2 months due to the move!) and I want this all to be over with and not hanging over my head for months. Should I just stay on the retiree medical, which is a sure thing, though expensive? That is what I am leaning towards just because trying to prove income with the bureaucracy will be a nightmare since last year we had income and this year we will not.


I need to decide NOW as 3/1 is around the corner! Any help appreciated.

Did you sign up for a silver plan that qualifies you for CSR?
If you signed up for one of these silver plans and you are getting your premiums at $40/month with no deductible. It looks like the Ambetter Balanced Care 11.
You are therefore getting the CSR and the PTC (normal premium looks to be about $877/month for a single(since your husband is on medicare he doesn't count) and I think you will be fine as long as at tax time your income comes in at what you said.
Even if your off a little you just make up the difference of your PTC and it won't amount to much at all.
No worries and next time don't use a broker it is very simple to do yourself!