ACA how to not fall over the cliff?

[Rianne]

AGI and MAGI both are income before the standard deduction, so your cliff is $68K of income, not 92K.

Please double check that. I thought it was $67,400. I have to plug in $67,500 to make sure I"m correct. You do not want to go over the cliff.


Edit: I just plugged in $67,700, not eligible for a subsidy.

 

[mitchjav]

OK - question about the otherside of the equation - what if I've estimated my taxable income such that I get the maximum (or close to the maximum) subsidy... then my income falls short of that into the area that would have thrown me into Medicaid.. what happens then

 

[Rianne]

OK - question about the otherside of the equation - what if I've estimated my taxable income such that I get the maximum (or close to the maximum) subsidy... then my income falls short of that into the area that would have thrown me into Medicaid.. what happens then

Not good. We investigated that possibility years ago. Unless you really want to be on Medicaid. It's complicated. If I remember correctly, they take away all the subsidies you had over the year. Then you have to go through hoops to declare you are Medicaid eligible. Prove all sorts of stuff. I can't remember exactly, but you do not want to go there.

 

[fh2000]

Please double check that. I thought it was $67,400. I have to plug in $67,500 to make sure I"m correct. You do not want to go over the cliff.


Edit: I just plugged in $67,700, not eligible for a subsidy.

I am getting my numbers from California Income limit charts:
For 2020, a family of 2 with 400% FPL income ceiling $67, 640.
For 2021, a family of 2 with 400% FPL income ceiling will be $68,960.

 

[Rianne]

I am getting my numbers from California Income limit charts:
For 2020, a family of 2 with 400% FPL income ceiling $67, 640.
For 2021, a family of 2 with 400% FPL income ceiling will be $68,960.

Oh, you got early numbers for 2021. We won't get those until Nov. 1 in Illinois. I was referring to 2020 as we are still concerned we'll go over the limit and we won't know for sure until Dec. 31. Moral: A healthy safety net for 2020 is mandatory for us.

 

[sengsational]

If you fall into Medicaid territory, I didn't think they clawed back your subsidy. It would be easy to prove... just open your tax software with a year you had a subsidy, then lower your income to less than 200% FPL. I'm pretty sure there's not a "cliff" there too or I would have remembered that.


If your estimated income while applying is low, they will dump you into Medicaid and not offer ACA policy, but that's not the same as a clawback.

 

[RunningBum]

Please double check that. I thought it was $67,400. I have to plug in $67,500 to make sure I"m correct. You do not want to go over the cliff.


Edit: I just plugged in $67,700, not eligible for a subsidy.

The question was asked vaguely, "For instance, if the MAGI cliff is $68k for a couple". (emphasis mine on the "if") and it sounded like they hadn't retired yet, so I used their number. I should've used an actual number for a specific year to avoid such confusion.

 

[cathy63]

If you fall into Medicaid territory, I didn't think they clawed back your subsidy. It would be easy to prove... just open your tax software with a year you had a subsidy, then lower your income to less than 200% FPL. I'm pretty sure there's not a "cliff" there too or I would have remembered that.


If your estimated income while applying is low, they will dump you into Medicaid and not offer ACA policy, but that's not the same as a clawback.

You are correct. They do not claw back the subsidy if you don't make enough to qualify (see form 8962 and its instructions for details).

 

[Rianne]

OK - question about the otherside of the equation - what if I've estimated my taxable income such that I get the maximum (or close to the maximum) subsidy... then my income falls short of that into the area that would have thrown me into Medicaid.. what happens then

Here's the skinny: I'll print the question and good luck understanding the answer. You'll have to read the article.



"Q: I’m self-employed, so my income varies from one year to the next. I enrolled through the exchange and projected an income that makes me eligible for premium subsidies, but what if my income actually ends up being low enough that I would have been eligible for Medicaid instead? Will I have to pay back those subsidies? What if I don’t take monthly subsidies and use my savings to pay premiums, hoping my income will increase? What’s the best strategy for me right now?"


https://www.healthinsurance.org/faq...-do-during-open-enrollment-to-cover-my-bases/