MAGI, ACA and married but one on/one off (Medicare) exchange?

[LARS]

Curious how premium/subsidies are calculated when married and one person is purchasing on ACA exchange and the other is on Medicare?

Also what is procedure when one person goes on Medicare midyear and no longer needs ACA insurance? Remaining person have to reapply as single?

[gauss]

If nothing else changes (same MAGI, no change in SS, same number of dependents etc) except spouse goes from ACA policy to Medicare then your subsidy should go down dollar for dollar (down to zero) by the amount that your ACA premium goes down.

You can see the full story by reviewing IRS From 8962 Premium Tax Credit (PTC)

-gauss

[wmc1000]

We had this exact scenario last year. Net difference, (after premium subsides with no MAGI changes), ACA payment increased by $4.36 monthly.

[LARS]

So if I’m understanding you both effectively you stay at same family income but the subsidy is basically halved as is the insurance premium.

I wasn’t sure if you had to allocate income between spouses and recalculate subsidies, etc., but I guess not...

Thanks for response. So it sounds like the process is pretty seamless...

[ShokWaveRider]

I am in the same boat. I plugged my numbers into a ACA subsidy calculator and it as a wash. I did it as if I was 64 and DW was 60 and then when I was 65 and on Medicare and DW was 60. the subsidy just halved.

BTW FYI It cost me $300 a month more to be on Medicare than when I was on an ACA plan.

[Texas Proud]

Quote:

Originally Posted by LARS So if I’m understanding you both effectively you stay at same family income but the subsidy is basically halved as is the insurance premium. I wasn’t sure if you had to allocate income between spouses and recalculate subsidies, etc., but I guess not... Thanks for response. So it sounds like the process is pretty seamless...

I would check the premiums.... I know that mine is higher than DWs... she is 10 years younger... so it is not half...



The back of my stmt shows the individual costs per person...

[gauss]

ACA subsidies are based on your MAGI relative to FPL.

You are expected to contribute a fixed amount (between 2% and 9% of MAGI depending on where you stand in the 100-400% FPL spectrum). The subsidy/PTC will pickup any additional amount assuming you purchase the second lowest cost silver plan (and otherwise qualify for subsidies/PTC).

-gauss

[gauss]

Quote:

Originally Posted by LARS So if I’m understanding you both effectively you stay at same family income but the subsidy is basically halved as is the insurance premium. I wasn’t sure if you had to allocate income between spouses and recalculate subsidies, etc., but I guess not... Thanks for response. So it sounds like the process is pretty seamless...

Allocation means something specific in part 4 of IRS Form 8962. This usually doesn't come into play unless the people on your HI policy and the people on your tax return look like a classic Venn diagram of 2 intersecting circles. Divorces, blended families etc is usually when this comes into play.

If you are married to your spouse and MFJ then no allocation is necessary.

-gauss

[gauss]

Quote:

Originally Posted by ShokWaveRider BTW FYI It cost me $300 a month more to be on Medicare than when I was on an ACA plan.

Yes, OP will need to pay his Medicare Part B/D premiums in addition to the ACA plan.

My response about the dollar for dollar offset in some cases would only apply to the ACA. Medicare sold separately.

[omni550]

Quote:

Originally Posted by gauss Yes, OP will need to pay his Medicare Part B/D premiums in addition to the ACA plan. My response about the dollar for dollar offset in some cases would only apply to the ACA. Medicare sold separately.

"Medicare Part B/D"....and likely added Medigap Plan "x" premiums, too.

omni