Is Medicaid mandatory or optional?

[Refresher]

Do we know for sure if a person lives in a state that expanded Medicaid and has 2015 income of below 138% they do not have the option of buying a plan on the exchange.

Must they take Medicaid in 2016?
Or maybe they can buy a plan on the exchange without a subsidy?

And how is it handled if they had an exchange plan in 2015 and now they find their income did not meet the 138%.

Anyone have any experiences?

 

[pixelville]

I don't know what the law is.

I prepared a tax return for a client (where I volunteer) who was at 90% FPL and didn't apply for Medicaid (expanded in CA) in 2015 but got health insurance through the marketplace with subsidies. Upon filling the tax return, it turned out that she got back (refunded) the premium amount she had paid. So her cost of premiums through the marketplace was zero. I remember looking at her 2014 return and it was the same situation.

Not sure if this is how it is supposed to be, but that is what the tax software did.

 

[rbmrtn]

Do we know for sure if a person lives in a state that expanded Medicaid and has 2015 income of below 138% they do not have the option of buying a plan on the exchange.

Must they take Medicaid in 2016?
Or maybe they can buy a plan on the exchange without a subsidy?

You can buy any plan you want, but you don't get a subsidy if you qualify for medicaid and reject it. From Healthcare.gov

https://www.healthcare.gov/medicaid-chip/getting-medicaid-chip/

A Marketplace insurance plan would cost more than Medicaid and usually wouldn’t offer more coverage or benefits. If you qualify for Medicaid, you aren’t eligible for savings on Marketplace insurance. You’d have to pay full price for a plan.

 

[homestead]

They put me in Medicaid last year and I canceled it and bought a plan off the exchange.

 

[samclem]

You can buy any plan you want, but you don't get a subsidy if you qualify for medicaid and reject it. From Healthcare.gov

https://www.healthcare.gov/medicaid-chip/getting-medicaid-chip/

A Marketplace insurance plan would cost more than Medicaid and usually wouldn’t offer more coverage or benefits. If you qualify for Medicaid, you aren’t eligible for savings on Marketplace insurance. You’d have to pay full price for a plan.

As a practical matter, couldn't a person just estimate that their income was going to be above 138% of the FPL and get the subsidies (premium and cost-sharing with a Silver plan) while buying through the exchange? Sure, as it turned out your income wasn't at that level ("ooops--I had a bad year"), but does the federal government have any mechanism to recover the money they paid out? IIRC, the only recourse they have is to hold on to tax withholdings above the person's actual tax obligation, but that is easily avoided simply by reducing withholdings to be very close to the actual tax liability.
Then do the same thing the following year.
Is there any reporting on what is actually happening when people fail to earn 138% of the FPL but have received subsidies? I'd be very surprised if any substantial recovery is taking place, or if people are experiencing significant negative outcomes. OTOH, it would be interesting to see if the actual care available (wait times, choice of facilities, etc) varies significantly between Medicaid and a typical Silver plan. In some cases there's an appreciable difference between "being covered" and "being able to get care."

 

[Bamaman]

I would try to avoid Medicaid if there are any other options. In our community, the good doctors won't even talk to a Medicaid patient. Heck, they don't really want to see new Medicare patients with the low schedule of payments in our region.

Local Medicaid patients are essentially visiting physicians from other countries--many of which don't even speak good English.

 

[MBSC]

Do we know for sure if a person lives in a state that expanded Medicaid and has 2015 income of below 138% they do not have the option of buying a plan on the exchange. Must they take Medicaid in 2016?

It is based on 2016 estimated income which may be above the Medicaid threshold. 2015 actual income had yet to be determined when they enrolled in a subsidized 2016 exchange plan in late 2015.

And how is it handled if they had an exchange plan in 2015 and now they find their income did not meet the 138%.

On federal tax return Form 8962, since the exchange accepted the 2015 income estimate provided during enrollment in late 2014 or later accepted the income estimate after documentation was provided, the person keeps the premium subsidy. Repayment of APTC occurs when actual income is higher than estimated income and may be limited to the amount in Table 5 for line 28. There is no reconciliation of cost sharing subsidies.

 

[jim584672]

In states that did not expand many people are overly optimistic in their estimates in order to get over 100% FPL and get a subsidized plan thus avoiding the gap. As long as the estimate is plausible and you can back it up if they ask for proof. No penalty for underestimating your income, it all gets reconciled at year end.

 

[AllDone]

What Jim said. If your income is likely to be below 100% of FPL, you can overestimate without fear of any penalty and buy an exchange plan with subsidies. If your income is below 250%, you don't just get premium support subsidies, but also out-of-pocket payment support.

Explaining Health Care Reform: Questions About Health Insurance Subsidies | The Henry J. Kaiser Family Foundation

 

[GTFan]

Also it's fairly easy to game income (for most ERs) to get over the 138% FPL threshold and avoid Medicaid. Roth conversions are a popular way to do so. You're only talking about $22k of income for a family of two - if you have a lot of taxable investments then divs and cap gains are going to be a big enough chunk for many folks that you might not need to convert a lot. If you're mostly tax-deferred you have plenty to convert.

There's no way I'd take Medicaid here in GA if they ever expand it - very limited acceptance due to providers not getting paid enough.

 

[jim584672]

In non-expanded states you only need to get over 100%, the expanded states are 138%.