ACA vs Medicare, Different Ages

[ScotsmanUS]

Hi, my wife is 3 years younger than I am, so I will be leaving the ACA system and moving to Medicare when I am 65, 3 years before her. For those 3 years how do I determine her MAGI to determine if she qualifies for any help paying for coverage?? Normally I file our taxes as MFJ, do I need to file separately for those 3 years??

I'm confused as to how to do this.

Brian

 

[jesaco]

Not a tax expert but I believe your wife will not be eligible for the ACA premium tax credits if she files "married filing separately" based on IRS rules. I'm in the same boat, on Medicare but wife will take another 3 years to qualify for medicare and is still on ACA for her heatlh insurance.

Maybe someone more kowlegeable can clarify this.

 

[old medic]

From what I understand both incomes count

 

[orchid55]

Unfortunately it is the MAGI for both people that will determine the size of your wife's subsidy. She will get a smaller subsidy because your income is the same, but only one person needs the insurance.

 

[boog]

Similar situation here. You must file MFJ to get subsidy for wife. Wife’s subsidy decreased such that her premium cost alone is now more than our combined premium cost was before I started Medicare. She starts Medicare in a bit over two years, at which time our combined premium costs will again be lower than now (hopefully).

 

[RetiredAndLovingIt]

Following..
My friend fell into this issue as well when her husband moved to Medicare earlier this year. She told Covered California that she had no income so they approved her for Medi-Cal which she was pretty upset about so her husband withdrew money from his IRA account that somehow qualified as income for her and she's getting her ACA for free currently but I think at the end of the year this is going to be a mess. I'm guessing their joint tax return will show about 70K in income.
What should she have done so i can let her know if she needs to change something in regards to her income.

 

[jim584672]

Following..
My friend fell into this issue as well when her husband moved to Medicare earlier this year. She told Covered California that she had no income so they approved her for Medi-Cal which she was pretty upset about so her husband withdrew money from his IRA account that somehow qualified as income for her and she's getting her ACA for free currently but I think at the end of the year this is going to be a mess. I'm guessing their joint tax return will show about 70K in income.
What should she have done so i can let her know if she needs to change something in regards to her income.

If someone has zero monthly income they would qualify for Medicaid. Since we are in a public health emergency they would be locked in until the emergency is over.

 

[djsander]

My wife and I started the year on an ACA policy. They continued to try and put her on Medicaid due to her income. Multiple calls got that straightened out as it is our combined income. They kept looking only at her social security. Then further into the year she switched became eligible and switched to medicare and I continued on an ACA policy. To keep off Medicaid and to get the subsidies you need to have a MAGI above something like 138% of the poverty level for the number of people in the household. So if it’s you and your wife you use 2 people. You can go to your state or the federal exchange and put in different incomes to figure out your level of subsidies. Estimate your income for the year and then as we will be doing Roth conversions to keep our income above the Medicaid level and get the subsidies. That’s the basics. I’m sure others can give better specifics. It does take a little planning to keep you within the income range, but it’s worth the time.

 

[xlf11]

Both you and your wife's income are accounted for ACA even for her alone after you are on Medicare. Plus if both of you on the same ACA plan before, she will be on a separate (new) ACA probably with less tax credit if both of you income stay the same. Also depending on who's the one sighed up originally with ACA, be careful with the transition day/method as this may require specific procedure to not mess up the remaining spouse' s ACA. The best way seems to seek a local experienced agent's help...

 

[RetiredAndLovingIt]

If someone has zero monthly income they would qualify for Medicaid. Since we are in a public health emergency they would be locked in until the emergency is over.

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.

 

[jim584672]

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.

ACA is calendar year based while Medicaid is monthly based. It doesn't look at what you made in a year at all. I know a few people who made lots in the front of the year, had a low income month and are rightly placed in Medicaid even though they made way over if you count it by a year.

 

[xlf11]

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.

She should be fine with a $70k income on ACA for 2022 as the 400% FPL subsidy cliff was eliminated by ARP Act. So at worst, she will repay part of the subsidy with her portion of 8.5% of their income and there is no penalty for underestimate your income.

 

[ivinsfan]

Following..
My friend fell into this issue as well when her husband moved to Medicare earlier this year. She told Covered California that she had no income so they approved her for Medi-Cal which she was pretty upset about so her husband withdrew money from his IRA account that somehow qualified as income for her and she's getting her ACA for free currently but I think at the end of the year this is going to be a mess. I'm guessing their joint tax return will show about 70K in income.
What should she have done so i can let her know if she needs to change something in regards to her income.

It's too late for your friend but of other educate yourself about things before you need to make a switch.. as for your friend let her figure it out for herself, some times that's the only way people learn. because from what you wrote you don't a firm grasp on the rules either.

 

[ivinsfan]

If someone has zero monthly income they would qualify for Medicaid. Since we are in a public health emergency they would be locked in until the emergency is over.

The problem was this person didn't have zero income.

 

[ivinsfan]

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.

Just step away and let her worry about. The paragraph you just wrote makes no sense. On regular ACA for one person with 70K in income you won't get free insurance.

 

[kyzymurgist]

As several already explained, both incomes count. We're in the same boat as OP with DW 3 years younger. Our tax credit was north of $17k for several years with $0 premium since the rules changed to stop federal end federal funding of cost sharing subsidies. Talk about unintended consequences.

But I just started Medicare this year. So the clock is now ticking. Only have 5 years to convert large sums to Roth before SS substantially reduces the amount that can be converted in the 22 bracket.

I think that's worth sacrificing DWs tax credit but not positive. Probably couldn't get the full credit anyway since we are about depleted of after tax funds.

 

[Texas Proud]

Just to throw some more problems into the mix... if you have a child still on your plan...


When you throw in their income it makes a difference...


And it is household income that is used from what I understand...

 

[Rianne]

This thread opens a can of worms )

I start Medicare on 9/1/2022. Our ACA policy is in my name. DH starts Medicare on 12/1/2022. I was told I could end my portion of the ACA policy the 1st or 2nd week of Sept. and have it backdated to Sept. 1 to take me off and leave him on. We'll be out of cellphone range on Sept.1.

Does anyone know what his premium will be after I'm taken off? We MFJ, income ~$50K. Our current monthly premium is $8.95 on a Bronze HD plan. I keep hearing his premium will jump a lot.

 

[xlf11]

This thread opens a can of worms )

I start Medicare on 9/1/2022. Our ACA policy is in my name. DH starts Medicare on 12/1/2022. I was told I could end my portion of the ACA policy the 1st or 2nd week of Sept. and have it backdated to Sept. 1 to take me off and leave him on. We'll be out of cellphone range on Sept.1.

Does anyone know what his premium will be after I'm taken off? We MFJ, income ~$50K. Our current monthly premium is $8.95 on a Bronze HD plan. I keep hearing his premium will jump a lot.

First of all, get a local agent who handles both ACA and Medicare if you are on your own. It costs you nothing and might help to get the best plans in your local area. We just went through the similar ACA/Medicare for two of us and everything was smooth...

As for ACA cost after you are on Medicare, it definitely will be more expensive than before for the same income and you can put your income on the ACA website to have an estimate. Be careful about the transition from your both to one on ACA as this will be a new plan with different plan # even everything stays the same so your spouse needs to setup again for payment etc. as if this is the first time on ACA.


Good luck!

 

[ivinsfan]

This thread opens a can of worms )

I start Medicare on 9/1/2022. Our ACA policy is in my name. DH starts Medicare on 12/1/2022. I was told I could end my portion of the ACA policy the 1st or 2nd week of Sept. and have it backdated to Sept. 1 to take me off and leave him on. We'll be out of cellphone range on Sept.1.

Does anyone know what his premium will be after I'm taken off? We MFJ, income ~$50K. Our current monthly premium is $8.95 on a Bronze HD plan. I keep hearing his premium will jump a lot.

who told you this about ACA? A reliable source? Have you already signed up for a Medicare supplement? IMO you have all this sorted out already...it costs what it cost but the more important is making sure you both have the coverage you qualify for...

 

[ShokWaveRider]

We have found that in our case, ACA is a lot cheaper than Medicare, assuming you do not opt for the most expensive plans that cover Mayo Clinic and such, and Medigap Part G is also taken into account. DW still used the ACA, I use Medicare. However, the coverage is more like Medicare Dis-Advantage and has nowhere near the coverage as Medicare from a provider perspective. It is always a challenge to find a specialist get a referral etc. With Medicare you just go to whoever you want assuming they take Medicare. There is no one in our area that does not take it.

 

[pirsquared]

First of all, get a local agent who handles both ACA and Medicare if you are on your own. It costs you nothing and might help to get the best plans in your local area. We just went through the similar ACA/Medicare for two of us and everything was smooth...

As for ACA cost after you are on Medicare, it definitely will be more expensive than before for the same income and you can put your income on the ACA website to have an estimate. Be careful about the transition from your both to one on ACA as this will be a new plan with different plan # even everything stays the same so your spouse needs to setup again for payment etc. as if this is the first time on ACA.


Good luck!

I think this depends on who is listed as primary. I am primary on our ACA account, so when DH started Medicare, DD and I stayed on our same plan with the same account number and the same online access. etc.

 

[Rianne]

who told you this about ACA? A reliable source? Have you already signed up for a Medicare supplement? IMO you have all this sorted out already...it costs what it cost but the more important is making sure you both have the coverage you qualify for...

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.

 

[Rianne]

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.

 

[ivinsfan]

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.

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.