What happens to the ACA subsidy when one person goes on Medicare?

[Wille]

My wife and I have been on ACA for 7 years. I will turn 65 in 2024 and will go on Medicare. She is 58, so will stay on ACA for another 7 years. Should we expect her subsidy to be about the same as it is now?

 

[orchid55]

No, her subsidy will be reduced because ACA considers the whole family's income even if only one person needs ACA insurance.

 

[cathy63]

Her subsidy will be lower.

Subsidy = Premium - AnnualContribution

The annual contribution for your household is the same no matter how many people are on an ACA plan. You can see the calculation for this by looking at the top part of form 8962 in your last tax return.

When you only have one person left on the ACA plan, the premium goes down but the annual contribution remains the same, so the subsidy decreases.

 

[ShokWaveRider]

Simple answer is it goes away. DW is doing this right now and she has to inform the ACA provider with the effective Medicare dates before it takes effect, Medicare that is.