What happens to spouse ACA coverage when I leave ACA for Medicare?

[mrgrouse]

First time poster! Currently my slightly younger spouse and I are on NJ ACA with subsidies until I turn 65 in 2025. I will be eligible for Medicare anytime between March and September 2025. Whenever I sign up for Medicare, I suspect my subsidy will be prorated till my signup month. I am curious what happens to my spouses ACA coverage and subsidies at that point. Will she lose her subsidies and have to pay full price for her coverage for remainder of year whenever I transition to Medicare? Or is her subsidy going to be prorated. If prorated, how is her proration calculated since we file MFJ? Very confused...

 

[Texas Proud]

Mine was at the end of the year so not knowledgeable about current year... they really messed us up... cancelled DW and DD... had to get with them to show I ONLY cancelled me... the eventually agreed and backdated that they were still on the plan...

But we had to sign her and DD up for the following year... she has her own account... still gets subsidy as long as you are below the income level...

 

[audreyh1]

It was easy for us because we each had individual policies. No children.

No subsidies either.

 

[N02L84ER]

I went on Medicare in October. My ACA premium was ~$102/mo, DH's premium was $101 in September after the premium subsidies. DH's premium jumped to ~$335/mo in October which was still less than the $830/mo total premium for his insurance alone. So, yes she should still get a subsidy.

 

[Flieger]

You can go online and model it, but when I did it, the premium increased dramatically.

Flieger

 

[BrianB]

I posted about this on a different thread here a year ago. Here is our experience:

One on ACA, one on Medicare

 

[Eucerin]

I Can't give you the specific calculation details, but one thing I know for sure is that She needs to submit the changes to the ACA in NJ for the household change or income change. If it is same just two of you but you won't be needing the health insurance, it system needs to know that and make an adjustment

 

[mrgrouse]

Thanks everyone for the info. Sounds like I'll need to navigate my transition from ACA to Medicare while maintaining coverage for spouse and let the subsidy chips fall where they may. Since she'll be enrolling in medicare in 2026, our ACA/Medicare overlap is relatively minimal. Keeping fingers crossed that I don't mess up since we don't rely on brokers. Will be extra careful to avoid coverage glitches.

 

[sengsational]

Yes, there's nothing to do except let the chips fall. But your inquiry about how the chips will fall is a common question, and deserves attention.

It's still a "household" so household income still applies. And I presume you file jointly. What happens is that you'll have all 12 months on ACA for one person and some subset of 12 months on ACA for the other, but the income won't drop...all of it goes to form 8962. So Part I of 8962 doesn't give you a break for having fewer in your household on ACA.

You're used to getting a 1095-A with both of you, uniformly populated in Part III, January through December? Well, In the year where one of you converts over to Medicare, you'll get a 1095-A where the values get chopped in (roughly) half on the month the one spouse drops off. So the monthly table on form 8962 (the PTC form) has this break point, but column "C" of that table is uniform all the way down based on the household.

Perhaps the easiest way to see this in action is to create a new tax return in your favorite tax software and lie about your ages, and answer the interview as if one person went off to Medicare. You can use your current data for the first number of months on columns "a" and "b" of form Part II 8962, then cut those values in half for the remaining months. Part I of the form will calculate normally, as will the rest of the columns in Part II.

 

[walkinwood]

Thanks everyone for the info. Sounds like I'll need to navigate my transition from ACA to Medicare while maintaining coverage for spouse and let the subsidy chips fall where they may. Since she'll be enrolling in medicare in 2026, our ACA/Medicare overlap is relatively minimal. Keeping fingers crossed that I don't mess up since we don't rely on brokers. Will be extra careful to avoid coverage glitches.

I'm in the same situation except that DW will be on ACA for another 3 years. I didn't want to mess things up, so I got a broker.

She set us up with 2 individual policies so when I cancel mine, DW's just continues.

 

[sengsational]

When you buy (in the federal exchange, at least), it's not difficult to buy separate policies. It doesn't affect the price or the subsidy, but can make it more clear and avoid a snafu when the one person drops off the ACA.

 

[Flieger]

I think you still have to say 2 household home, and show total income (assuming married) so the subsidy drops significantly.

Flieger

 

[walkinwood]

I think you still have to say 2 household home, and show total income (assuming married) so the subsidy drops significantly.

Flieger

That's correct.

I used this calculator 2025 Obamacare subsidy calculator | healthinsurance.org

and an area code of 77015, 1 insured person of 61, household of 2 and MAGI of 81,000. Subsidy is $395/mo
With 2 insured people, the subsidy is $1422/mo. So, you roughly lose about 1/2 the per-person subsidy.

 

[mrgrouse]

I posted about this on a different thread here a year ago. Here is our experience:

One on ACA, one on Medicare

Thanks BrianB - good info there!

 

[mrgrouse]

Yes, there's nothing to do except let the chips fall. But your inquiry about how the chips will fall is a common question, and deserves attention.

It's still a "household" so household income still applies. And I presume you file jointly. What happens is that you'll have all 12 months on ACA for one person and some subset of 12 months on ACA for the other, but the income won't drop...all of it goes to form 8962. So Part I of 8962 doesn't give you a break for having fewer in your household on ACA.

You're used to getting a 1095-A with both of you, uniformly populated in Part III, January through December? Well, In the year where one of you converts over to Medicare, you'll get a 1095-A where the values get chopped in (roughly) half on the month the one spouse drops off. So the monthly table on form 8962 (the PTC form) has this break point, but column "C" of that table is uniform all the way down based on the household.

Perhaps the easiest way to see this in action is to create a new tax return in your favorite tax software and lie about your ages, and answer the interview as if one person went off to Medicare. You can use your current data for the first number of months on columns "a" and "b" of form Part II 8962, then cut those values in half for the remaining months. Part I of the form will calculate normally, as will the rest of the columns in Part II.

Thanks sengsational! Great suggestion about modelling using tax program.