ACA and MediCAID question

[MichealKnight]

Part of my plan in early retirement, is of course -- - to minimize risk and maximize return. Part of that is maximizing the tax code - legally of course and part of that is maximizing ACA credits.

Due to depreciation on rental homes, I am able to meet legal thresholds for some nice subsidies. BUT...........

If I depreciate to the max, my income goes 'too low', and the ACA then gives a nice subsidy for me and Wifey.........BUT insists that if my income is too low....no ACA for kids. Kids would qualify for CHIP insurance (Medicaid for Kids).

Cursory research I hear two things:

1.)CHIP insurance is great, it's taken at quite a few places, comprehensive, etc.


2.)UNOFFICALLY- - - there are hospitals, and practitioner, that will offer a lower standard of care to kids with CHIP insurance. And as much as that is so saddening - I can't discount a doctor, or a hospital - offering lesser care to someone whose insurance will have a lower reimbursement rate.

I can save $3000 per year via doing this and for me that's a nice chunk, especially since my kids are 13/9 and the $3000 yearly savings can add up over 9 years. But the prospect of lower care standards? If I ever sensed that I think my family would cash my life insurance policy, that's how distraught I'd be.

Thoughts?

[Another Reader]

Just don't. Everyone thinks their insurance is fine until they really need it. Medicaid in California is Medi-Cal. Several local counties in the Bay Area contract with Kaiser as the sole Medi-Cal provider. Kaiser is the king of cost containment even before adding in Medi-Cal constraints. The quality of care is abysmal.

[Dtail]

Stick with maximizing your ACA subsidies.

[pacergal]

Two of our DGK are on CHIP.
They have recieved Excellent medical care, newborn needed ER care and faced surgery at age 10 days.
I worked in public health, the care system I worked in had some of the best, most knowledgeable Docs I've ever known. But also some of the worst, who didn't last long.
Not unlike the private health care system I worked in previously.

I think it depends on where you live.

[ncbill]

Hard to find specialists here (even for children) willing to accept Medicaid.

I'd "manage" mAGI to make sure everyone's on an ACA plan instead.

[Dash man]

When it comes to family, I would never get “cheap” health insurance.

[MichealKnight]

Thank you everybody. I was leaning towards just going full ACA .... but I guess I needed to hear it from a few people and I appreciate it.

Hopefully my investment plans pan out and I can just stick to ACA.

[wallygator69]

Quote:

Originally Posted by MichealKnight If I depreciate to the max, my income goes 'too low', and the ACA then gives a nice subsidy for me and Wifey.........BUT insists that if my income is too low....no ACA for kids. Kids would qualify for CHIP insurance (Medicaid for Kids).

If you have a Tira do a Roth conversion annually to get your MAGI up to about $21k to $24k...Seems to be sweet spot for subsidies...

[SecondCor521]

A side note to be aware of.

I believe the fine print in the depreciation recapture rules require you to include depreciation that you actually took *or were entitled to take but did not take*. So if you were to reduce the amount of depreciation you took in order to qualify for ACA, then you would probably still have to pay depreciation recapture on the full amount of allowable depreciation, not just the portion you took.

Just guessing, but I think taking the maximum allowable depreciation and then doing Roth conversions to get your AGI to whatever target you set would be a better approach.

[EastWest Gal]

CHIP is not Medicaid for kids. Many pediatricians take CHIP insurance that don't take Medicaid. All hospitals take CHIP, and the practices affiliated with them do as well-UPMC, Penn State, Geisinger, Children's Hospital of Philadelphia, etc. Most CHIP programs are administered by regular health insurance companies, such as Blue Cross Blue Shield. Once they are in the door they are treated the same. We're in the same state. There are just a few small private practices that don't take CHIP in our area.

Be sure to do research regarding individual ACA plans. Some of the ACA plans are not accepted by even the hospital systems. However, that in-network out-of-network issue goes away in 2022 through federal legislation that was passed in December 2020. You can browse the Pennie site (PA ACA) for information regarding plans.