CHIP vs Health Subsidy

[newmillionaire]

* Notice: ignore this if you have not used CHIP in your own life...kind of a niche topic.



I live in PA and have been reading the children's health insurance program documents and am still confused.


My income this year will be about 45k so I am enrolled in the free CHIP program. I tried to sign up my 2 kids for the affordable healthcare plan my wife and I are both on (we receive a subsidy) but I am not allowed to sign them up. I am forced to use CHIP. Each year I must send in my full tax returns so they can determine if I am on free chip...low cost chip or full pay chip.


So I am thinking of selling a fund holding in a few weeks when my capital gain becomes a long term gain. My gain might be around 90K. This will raise my income to just about 150K for 2021. From what I read I need to report this change in income but for some reason my kids will remain on free chip until renewal at year end...seems kind of dumb...they should charge me the difference...


Anyway, my question is this...next year I want to be back on free chip because my income will be back to 45K/year...this is a one time event...will they allow me to go back?



I wish they would allow me to choose to include my kids on my insurance...annoying I am forced to work with CHIP and all their rules.

 

[newmillionaire]

I have answered my own question. Looks like to get off chip my income needs to be $82,268. Then my kids can move to their parents plan and the 8.5% limit on health spending (covid bill about to pass) would kick in. The problem will be when I apply for my 2022 Chip...my projected income will be 45K but my past income is what they look at. I had to deal with this in 2018 when I first applied for chip in 2018 for 2019. I sold my business and my income was too high...I had to explain to them over several weeks that my projections were correct and the income I made was a one time thing...

 

[SecondCor521]

PA probably manages their ACA marketplace differently, but I think they still are supposed to work off of your estimated 2022 income this fall when you enroll. For several reasons: (1) People's income rises and falls all the time, (2) that's the way the ACA law was written, (3) People are supposed to update the exchange if their income changes throughout the year, and (4) it all (except CSRs) gets reconciled on your 2022 taxes anyway.

In my state they just make perfunctory efforts to verify income estimates. If I convince them I know what I'm doing, they'll change it to whatever I tell them. I think they mainly want to make sure that I don't have to pay back a lot of the APTC if I estimate too low (although there are repayment caps and a repayment waiver for 2020 in the current bill).

PA should be the same, although they might fight you more. Estimate your income at whatever you think it will be for 2022, and they should (eventually) grant you the APTC you're due, after asking you for documentation or whatever they do there.

 

[newmillionaire]

Thank you for the detailed reply!

 

[RetiredAt55.5]

PA probably manages their ACA marketplace differently, but I think they still are supposed to work off of your estimated 2022 income this fall when you enroll. For several reasons: (1) People's income rises and falls all the time, (2) that's the way the ACA law was written, (3) People are supposed to update the exchange if their income changes throughout the year, and (4) it all (except CSRs) gets reconciled on your 2022 taxes anyway.

In my state they just make perfunctory efforts to verify income estimates. If I convince them I know what I'm doing, they'll change it to whatever I tell them. I think they mainly want to make sure that I don't have to pay back a lot of the APTC if I estimate too low (although there are repayment caps and a repayment waiver for 2020 in the current bill).

PA should be the same, although they might fight you more. Estimate your income at whatever you think it will be for 2022, and they should (eventually) grant you the APTC you're due, after asking you for documentation or whatever they do there.

I had to deal with PA's system this year, and they were definitely more difficult to deal with than healthcare.gov, in terms of income verification.

They kept trying to match up my projected 2021 income that I entered with what they had in their system (probably 2019 tax returns). And of course it wouldn't match up since EVERYTHING was different in 2020, and would be again in 2021 due to Covid (lots of unemployment benefits, little income, no 401k withdrawals, etc.). I went round and round on the phone explaining this, and they kept insisting on additional documentation or I would lose my subsidies in 2 months. They suggested filing my 2020 taxes, but my 2021 situation looks different from my 2020 situation and that would further muddy the waters.

Comically, they finally said as an alternate, I could submit a "Self Attestation of Income" document, which essentially says that my income is X dollars for 2021 and this is an honest and accurate estimate. That was accepted and no further documentation was required. I think this is comical because I thought the whole healthcare application was supposed to be me attesting to a certain income, so the letter seems redundant.

 

[jim584672]

CHIP is children's Medicaid so it may not work on calendar year income, if it is like Medicaid it works on monthly income. Also it probably has 12 months of coverage locked in, even if your income goes up.