ACA vs Medicare, Different Ages

[pirsquared]

I called ACA twice. Both times reassured that the ACA plan can be backdated to cancel on the 1st of the month. I just have to make sure I tell them only to take me off the plan. I'm all signed up for Medicare with a Medigap plan and prescription plan to start Sept. 1. It's considered a life change and I received a letter from the ACA that also explained a few things.

This is interesting. When DH started Medicare (6/1), I called 5/31 and they said to call back on 6/1. I called on 6/1 and the rep said I was too late to make the change effective 6/1, but I think she was mistaken because she eventually connected me with a supervisor who said she would "escalate" the issue to "backdate the change to 6/1," which was kind of funny because it was still 6/1. But it was fixed within a couple of days (although they snail-mailed me the notice which took 8 days which messed up a claim in the meantime). So backdating is possible, but I did not realize it was standard. I thought it took a supervisor to do that.

 

[Rianne]

I'm not an expert but that's why I kept asking you for more details because what you said originally did not make sense to me. I don't know if the rules have changed or you got bad info but the important thing you can do it properly now.

Thanks, when one spouse goes off ACA to Medicare and the other remains, you have to be careful how that's done. Especially since I'm the primary ACA holder. We'll be in Montana on Sept.1. All this confusion is about: you have to call the day before Sept.1 or you can wait a week after Sept. 1 and we can backdate canceling ACA. So much misinformation! Caution to anyone doing this. Ivansfan, you pointed this out, thank you. I'm glad I still have a relationship with our ACA broker.

 

[pirsquared]

Update: All this just scared me . I called and made an appt. with a local broker to take care of the transition. Literally, the rules have changed. She will go online and take care of it. DH keeps the same plan but pays a bigger premium as we'll lose about 1/2 of the subsidy. It has to be done before Sept. 1. I got conflicting information from the ACA phone-in service. It's a huge mess if you cancel ACA after the Medicare transition date, Sept. 1 for me.

This was my experience as well when transitioning DH to Medicare. I got it done but it involved a supervisor and lots of follow-up phone calls. DD is starting new insurance for a job on Sept. 1, so I have to go through this transition all over again. Maybe I should contact a broker this time. But it seems that I should be able to just go into the website in August and "report a life change" and have it effective Sept. 1, just like I have done for income changes in the past. Maybe I will call and ask for a supervisor and see if I can get more reliable info that was. I would love to be able to do the transition online and not by phone.

 

[xlf11]

Update: All this just scared me . I called and made an appt. with a local broker to take care of the transition. Literally, the rules have changed. She will go online and take care of it. DH keeps the same plan but pays a bigger premium as we'll lose about 1/2 of the subsidy. It has to be done before Sept. 1. I got conflicting information from the ACA phone-in service. It's a huge mess if you cancel ACA after the Medicare transition date, Sept. 1 for me.

That was exactly what we were told and done by the local agent two years ago. I was the primary on ACA and went to Medicare first and DW remained on the same plan with a higher cost than before. She was assigned a different # even everything was the same and she needed to setup the new plan on the same insurance website for the new monthly payment. Also, her transition later from ACA to Medicare was much easier as there was no complication of two people.

 

[imnontrad]

If you are on Facebook, join the group "Medicare Q&A" run by the company Boomer Benefits. I bet a lot in that group have been in your situation and have an answer.

 

[GoBears]

She's married filing joint so they will have about $70K per year so she should not qualify for nor does she want to be on Medi-Cal. I'm worried at the end of the year that they will owe a bunch of money and maybe penalties because she's not paying anything for her ACA right now. I think they were paying $600 for both of them after subsidy when he was on ACA as well.

DW is on Medicare due to disability. I am on ACA thru Covered California. My Blue Shield premiums for Silver coverage at age 63 in Contra Costa County are roughly $660 a month based upon married filing jointly and an annual $70,000 estimated income. So, your friends probably will owe money when filing their taxes in April, although the exact amount will depend upon her age, coverage tier, MFJ 2022 income, and whatever else Covered California considers when determining subsidy eligibility. Your friends may want to explore whether there is any way to reduce their income for the rest of the year.

 

[NoEZmoney]

Look-back period for determining MAGI / ACA Subsidy

You have to look back at past two year's income (unless regs have changed).
Here's a calculator that may help:

https://www.kff.org/interactive/subsidy-calculator/

 

[PaunchyPirate]

You have to look back at past two year's income (unless regs have changed).
Here's a calculator that may help:

https://www.kff.org/interactive/subsidy-calculator/

I’m confused by your statement. ACA subsidies are based on your estimated upcoming MAGI for the upcoming year of coverage. This is reconciled with your tax return for that upcoming year when you do taxes after that year to ensure you got the exact subsidy you qualified for.

There is no look back to MAGI over the previous 2 years.

Perhaps you are thinking about the IRMAA rules that look at your income from 2 years ago to determine if you need to pay addition premium amounts for Medicare coverage?

 

[NoEZmoney]

Sorry for the confusion. When I applied for ACA a few years back I had to use my AGI for current year open enrollment period.
I did have some adjustment the following year. I think there is some kind of formula for using last year's AGI for determining MAGI. But I could be wrong.

https://www.healthinsurancecolorado.net/calculate-magi/

 

[PaunchyPirate]

Sorry for the confusion. But if you're looking at an ACA subsidy-- you'll be looking at the AGI on your last year's tax term during open enrollment which is Oct-Nov. and you'll be looking at the next year if you plan on staying in the ACA. We were looking at that (in the near future) and basically included the past year (when we would apply) and the following year.

Now if there's a "life event" i.e. job loss, change of status...then things change.

https://www.healthinsurancecolorado.net/calculate-magi/

You are certainly free to look at last years tax return as a guide to help you determine what income you wish to estimate for the coverage year. BUT the amount from your tax return is not actually used to determine your actual subsidy. Ultimately, during open enrollment, you can specify any amount of MAGI you want. You may need to document why you think this will be your income in the coming year, but that could be as simple as a letter you write saying “my circumstances have changed (retirement, for example) and I estimate I will make $xx,xxx next year”. When taxes are done after the year is completed, you will reconcile to the actual subsidy you were entitled to based on the income that actually developed.

Perhaps your state does it differently, but this is how it’s been done for me and others who post here.

 

[EastWest Gal]

I discovered last week that my state (PA) has a document that I can sign attesting to our expected income for this year, and basically I need to file nothing else. I can also adjust our monthly premium based on that assessment.

Another option if you are underpaying your premiums is to simply pay, or adjust, your quarterly federal income tax payment to make sure you pay no penalty when you file your tax return next year.

 

[PaunchyPirate]

I discovered last week that my state (PA) has a document that I can sign attesting to our expected income for this year, and basically I need to file nothing else. I can also adjust our monthly premium based on that assessment.

Another option if you are underpaying your premiums is to simply pay, or adjust, your quarterly federal income tax payment to make sure you pay no penalty when you file your tax return next year.

EastWest Gal, that's interesting news. I'm also from PA. Was the document obvious on Pennie.com or how was it made available to you. I've never actually had to provide any proof in my 2 years on Pennie or 2 years on the Federal exchange before that. But just in case, it's nice to know they have such a thing.

Also, did you know that the propose rates for plans for 2023 can be found on the PA.gov Insurance Department website? You can only view them within each company's request document, so not easy, but if you want to see what your current company is proposing for next year, you might want to look thru the documents. I can assist figuring them out if you need. I have looked through the Highmark document already for my proposed rate increase. Of course, the rates are not final until November 1st.

 

[BrianB]

I'm bumping this thread because the original posts (before the discussion got sidetracked) were about the ACA / Medicare overlap for a couple and I think people should be aware of this issue - it affects a lot of us, and many (like me!) weren't aware of the issue.

DW & I are on an ACA plan. We get a premium tax credit but still pay over $500 / month. In September 2023 I will turn 65 and start Medicare. DW will reach 65 in October 2024.

We just found out that when I leave the ACA her gross premium will drop to about 50% of what our two-person plan costs now (expected, for one person instead of two) but our PTC will drop by over 85%. DW's net premium as a "single" will be about 10% higher than our total "family" net premium is now.

Between the ACA premium for DW and my Medicare premiums for parts B and D and gap insurance we will be paying over $1000 / month in premiums until DW turns 65.

As pointed out, this is because the PTC is determined by the total household income for people filing MFJ. When only one person of a couple is getting an ACA plan it looks to the system as if that person is single and making the total income.

I am glad we are only 13 months apart. Those with larger age differences could be paying a lot more for a long time.

BrianB

 

[perinova]

Thank you for posting this,
Indeed, the way the PTC calculation works, the premium to cover one person or two persons in the household remain about the same .
Also it's important to drop your ACA coverage immediately once on medicare or you will loose the subsidy and have to pay it back.

I'm bumping this thread because the original posts (before the discussion got sidetracked) were about the ACA / Medicare overlap for a couple and I think people should be aware of this issue - it affects a lot of us, and many (like me!) weren't aware of the issue.

DW & I are on an ACA plan. We get a premium tax credit but still pay over $500 / month. In September 2023 I will turn 65 and start Medicare. DW will reach 65 in October 2024.

We just found out that when I leave the ACA her gross premium will drop to about 50% of what our two-person plan costs now (expected, for one person instead of two) but our PTC will drop by over 85%. DW's net premium as a "single" will be about 10% higher than our total "family" net premium is now.

Between the ACA premium for DW and my Medicare premiums for parts B and D and gap insurance we will be paying over $1000 / month in premiums until DW turns 65.

As pointed out, this is because the PTC is determined by the total household income for people filing MFJ. When only one person of a couple is getting an ACA plan it looks to the system as if that person is single and making the total income.

I am glad we are only 13 months apart. Those with larger age differences could be paying a lot more for a long time.

BrianB

 

[Surewhitey]

I'm bumping this thread because the original posts (before the discussion got sidetracked) were about the ACA / Medicare overlap for a couple and I think people should be aware of this issue - it affects a lot of us, and many (like me!) weren't aware of the issue.

DW & I are on an ACA plan. We get a premium tax credit but still pay over $500 / month. In September 2023 I will turn 65 and start Medicare. DW will reach 65 in October 2024.

We just found out that when I leave the ACA her gross premium will drop to about 50% of what our two-person plan costs now (expected, for one person instead of two) but our PTC will drop by over 85%. DW's net premium as a "single" will be about 10% higher than our total "family" net premium is now.

Between the ACA premium for DW and my Medicare premiums for parts B and D and gap insurance we will be paying over $1000 / month in premiums until DW turns 65.

As pointed out, this is because the PTC is determined by the total household income for people filing MFJ. When only one person of a couple is getting an ACA plan it looks to the system as if that person is single and making the total income.

I am glad we are only 13 months apart. Those with larger age differences could be paying a lot more for a long time.

BrianB

Is there a way to manage your MAGI to reduce the "income" from bridge funds? We are 52 & 58, so eventually we'll whittle away, presumably, our "income" over time (bridge income interest) to then minimally affect the last 6 years of the "one person" problem. Or am I missing something?

Hoping to file SS after the first of us reaching 70-71 to maximize everything out...

 

[BrianB]

Is there a way to manage your MAGI to reduce the "income" from bridge funds? .

At 1/2 way through 2023 it's hard for us to reduce our income for this year. I will be looking at 2024 planning later this year so we may be able to do something for next year. Your situation may be different.

I expected a reduction in the PTC, but the size of the drop caught me by surprise.

BrianB

 

[BrianB]

Also it's important to drop your ACA coverage immediately once on medicare or you will loose the subsidy and have to pay it back.

That is correct. In MN we have a state insurance exchange (MNsure) and we were able to set up my exit from the ACA plan up to 90 days ahead of the ending date. I don't know if all states allow that. We're going to be travelling most of the summer so we did that yesterday.

Now to wade through the mountain of Medicare information & plans to choose the best for me...

BrianB

 

[perinova]

Is there a way to manage your MAGI to reduce the "income" from bridge funds? We are 52 & 58, so eventually we'll whittle away, presumably, our "income" over time (bridge income interest) to then minimally affect the last 6 years of the "one person" problem. Or am I missing something?

Hoping to file SS after the first of us reaching 70-71 to maximize everything out...

Within the "one person" period, the only option I can think of is to lower premium cost as much as possible (bronze plan / high deductible).