The biggest concern if you under report income is being placed into Medicaid. I've been in the ACA for 7 years now, and one year reported my income too low , and was placed into Medicaid. That was a big mistake, because all our doctors didn't take Medicaid that year. I make sure now to stay around the $35-$38K income range.
Right. That's explained well on this web page, which also offers you an estimate of how your cost might change without the Enhanced PTC. I plugged in my numbers and was surprised that my cost would not increase that much.
Yup, always kept my MAGI between 125% and 150% of FPL.
After being on ACA for years I decided to go on Medicaid because the amount I would have to take from my IRA and pay a penalty on in order to hit 100% FPL to qualify for ACA was more than I needed for living expenses. I didn't want to pay the penalty on withdrawals any more than I needed to. Being on Medicaid(or my states equivalent) hasn't been an issue.
I aimed low the first year. I hit one of the "claw back" thresholds but it seemed to work out. And of course they do not claw back the subsidies to co-pays in a silver plan. So aim low.
It's not a "loophole". It is an intended consequence based on the law.
I assumed the same when I first started ACA. But It does not all wash out in the end if your MAGI remains under 400% of FPL. The amount you have to repay is limited to a max of $3150 for the entire year.
But this misses on something very important that I ran into when attempting to re-enroll last month for 2025 coverage. Despite estimating my income for 2025 to be $30,000 as a single person, which puts me squarely into the ACA area again, one of the questions asked for my November 2024 income. My Nov income was very low, so I entered it. So, when I submitted, it said that I may qualify for Medicaid and to wait to hear back from the state. So I wasn't allowed to re-enroll into my ACA insurance plan for 2025. Well, this seemed ridiculous, but I was able to go back in and update my applications and report a higher income for November 2024, then I was able to re-enroll in my ACA plan for 2025. I never had to change my 2025 estimated income.
That's what I sloppily called the repayment loophole, but yeah, it doesn't always work out the same, as indicated by your observation and the observation that shooting too low can trigger Medicaid. But generally, for most people, I imagine, shoot high or lowish and after April, you're in the same spot.
If you shoot low you get more generous copay and deductible subsidies that are never clawed back (silver plans). And the claw back is limited.
On the ACA marketplace I just provided an annual figure-on time. Not sure why you need monthly. Is there some option to report every month?
There should be a way to put that in since that is how they determine if someone goes to Medicaid.
You can save a ton with the ACA compared to COBRA in most cases, unless your income is so high that subsidies aren't there.
There are people that found silver plans a better deal. Those never made sense for me because I didn't have enough visits for the silver perks to make up for the significant (in my region) difference in bronze to silver premiums. FWIW, back in the day, I always aimed just a hair over what would have put me in Medicaid (something like 203% FPL in my state/situation), then paid the difference come tax time. In all my years of doing that, I never engaged the repayment limitation.
It doesn't actually ask for "monthly" income, but rather for the specific month that I'm applying in. Last year, it asked for my December income because I applied in December. This year it asked me for my November income because I applied in November. It asks for the estimated income for the coverage year after the month's income info. You will notice is says "this month's household income" in the eligibility forms below. As noted earlier, this is the federal exchange, and I'm in Illinois.
