What do I do if I'm over the limit for an Obamacare subsidy? (supplement, cancer)

[noodlecat]

Have you looked into health-sharing ministries? There are a number of options out there, and you don't necessarily have to subscribe to a certain set of beliefs or attend services. You will have to pay a monthly premium, but it will be less than insurance and with lower deductibles. They are not-for-profit with capped overhead expenses so most of your premium actually goes to paying other people's bills, which I really like. I have Liberty HealthShare and have been very satisfied with them.

[localtraveler]

DanceswithBeagles, I'll talk to my HSA administrator about adding a second HSA, but for only $1000, it might be more trouble than it's worth.

noodlecat, I'll look into health sharing ministries again, but I checked this out 5 years ago, and it doesn't cover preexisting conditions, and I have one or two of those. Still, the premiums would be far less than Obamacare insurance.

Does anyone know anything about a catastrophic-only policy that's sold by any companies independent of healthcare.gov? That might be perfect for us.

Thanks for all the responses.

[noodlecat]

Originally Posted by localtraveler

DanceswithBeagles, I'll talk to my HSA administrator about adding a second HSA, but for only $1000, it might be more trouble than it's worth.

noodlecat, I'll look into health sharing ministries again, but I checked this out 5 years ago, and it doesn't cover preexisting conditions, and I have one or two of those. Still, the premiums would be far less than Obamacare insurance.

Does anyone know anything about a catastrophic-only policy that's sold by any companies independent of healthcare.gov? That might be perfect for us.

Thanks for all the responses.

Liberty HealthShare does cover preexisting conditions, eventually. They must be declared on application, and there may be a review of them. They are not eligible during the first year of membership, but are eligible for sharing up to $50,000 during the 2nd and 3rd years. And after 3 years, the conditions are no longer considered preexisting and thus become eligible for full sharing.

[athena53]

Originally Posted by localtraveler

Is there anything I can do to lessen MAGI, besides itemizing and donating to charity? (I have no other deductions that could be itemized, and the standard deduction is so generous that my taxes would go up. I estimate that I'd have to contribute about $10,000 to charity to get under the subsidy limit.

Neither of these will decrease your MAGI (Modified Adjusted Gross Income). That's the idea; they determine subsidies on your gross income regardless of your deductions, itemized or not. For most people MAGI is Gross income for taxes, plus any tax-exempt interest. Here's a more detailed description.

https://www.investopedia.com/terms/m/magi.asp

I retired at 61 and due to my husband's SS (and, after he died, Survivor benefits) plus a couple of small pensions plus investment income on the after-tax accounts, there was no way I qualified for subsidies so I bit the bullet and paid full freight. By the time I qualified for Medicare in 2018, my premium had doubled from $450 to $900/month. Fortunately I never had anything more serious during those years than a few raging cases of poison ivy, so at least I never got hit with the full deductible. My brother and his wife lost his company-paid retiree health insurance starting in 2018 when the company abruptly decided to drop it. They were paying $22K/year for ACA for the two of them back then. They don't get subsidies, either. I think they finally get Medicare this year.

Bottom line: some of us just can't qualify for subsidies. I'm a little envious of people who can "manage" their AGI to fall under the threshold but some of us can't.

[KaraG]

Originally Posted by athena53

Neither of these will decrease your MAGI (Modified Adjusted Gross Income). That's the idea; they determine subsidies on your gross income regardless of your deductions, itemized or not. For most people MAGI is Gross income for taxes, plus any tax-exempt interest. Here's a more detailed description.

https://www.investopedia.com/terms/m/magi.asp

I retired at 61 and due to my husband's SS (and, after he died, Survivor benefits) plus a couple of small pensions plus investment income on the after-tax accounts, there was no way I qualified for subsidies so I bit the bullet and paid full freight. By the time I qualified for Medicare in 2018, my premium had doubled from $450 to $900/month. Fortunately I never had anything more serious during those years than a few raging cases of poison ivy, so at least I never got hit with the full deductible. My brother and his wife lost his company-paid retiree health insurance starting in 2018 when the company abruptly decided to drop it. They were paying $22K/year for ACA for the two of them back then. They don't get subsidies, either. I think they finally get Medicare this year.

Bottom line: some of us just can't qualify for subsidies. I'm a little envious of people who can "manage" their AGI to fall under the threshold but some of us can't.

Thanks for a good answer.

We're self employed and lost our high deductible catastrophic policy back when the ACA started. We never could find another one to replace it, seems like they were only available to younger people. I'll be interested to see if OP can find one now. We also ended up going to a Christian healthcare sharing ministry which has worked out great for us.

[localtraveler]

I checked with my HSA administrator, and you're apparently right about the extra account. Thanks for the info; I never would have known this (it's not exactly advertised).

$1000 doesn't go very far to do what I want; but I still might do it (I have till April).

Anyway, thanks again for the info.

[Pumpkin2]

OP

You said your income is tied to your investments. We also live on interest
and dividends but have saved quite a bit of cash. Using the cash allows
us to stay under the ACA income requirements and enables us to
receive a subsidy.

Do you have the ability to live on some cash until you and your
wife are Medicare age?

[localtraveler]

Thanks for your reply, Pumpkin2, but I don't see how "living on cash" brings down my income. I have investments, including interest, dividends, and capital gains, and I live on that. The income comes in whether I spend it or not.

I have to declare this income on my taxes, unless I'm missing something. Could you explain further? I'd really appreciate it.

[Pumpkin2]

Originally Posted by localtraveler

Thanks for your reply, Pumpkin2, but I don't see how "living on cash" brings down my income. I have investments, including interest, dividends, and capital gains, and I live on that. The income comes in whether I spend it or not.

I have to declare this income on my taxes, unless I'm missing something. Could you explain further? I'd really appreciate it.

We sold some real estate years ago and put the proceeds in savings mostly in no penalty CDs but
Some in regular savings account. We pull out as needed to add to our interest and dividends.
For the past 3 years we have kept our taxable income at less than 30,000. Another added benefit is our capital gains were taxed at 0 due to being in the 10% tax bracket.

But be aware Biden will probably change the capital gains regulations.

[selhars]

As for being over the limit and trying to lower MAGI, how far over the limit are you?

$10, 2k or 5K? Or more?

Just how much are your trying to lower it by....in the time you have left, to try to get it done?