For people in states with Medicaid expansion, do you know anyone that has refused it and just did ACA subsidies? (55, inheritance)
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I am in NJ. I am looking to retire early. The wife and I are in 50 and 55, and the kids are 12 and 14. The way I have my savings set up, I can have between $0 and "a lot" in "income" each year (i.e. take money out of my 401K vs my savings account). I was looking at different scenarios and of course, medical insurance is a big concern.
In my state, I can get Medicaid if I have $0 income, but my wife wants to use our same doctors, and we will not be able to keep them all if we did. So I was looking in taking enough income to get me out of Medicaid range, and just doing ACA subsidies. But that made me think.
If I had $0 income, do I HAVE to do Medicaid, or can I just buy something from ACA with subsidies, and if so, would I get more subsidies than if I had income that placed me right outside Medicaid?
I called the people in my state, and they were not very helpful.
Has anyone or anyone you know done this?
On our state's website, if I put in $0 income it just sends me to my state's medicaid site. If I put in enough income to get me out of that, buy insurance via ACA, and then end up with $0 income, would that be a problem? Would I still be able to buy ACA next year?
From everything I've read, when you apply for ACA you give them your annual income. If it falls below a certain level then you qualify for medicaid. If you qualify for medicaid you are not eligible for ACA. Income amounts vary from state to state in regards of how much income you need to qualify for either. If you have zero income $0, you will be put on Medicaid regardless of what state you live in. You don't have a choice.
When you apply for ACA they will ask you how many people are in your household, their ages and household income.
Any income coming into the household (including your wifes) which has to be reported to the IRS is considered as income as far as ACA including taking money out of your 401k, so your scenario of showing 0 income won't work.
From everything I've read, when you apply for ACA you give them your annual income. If it falls below a certain level then you qualify for medicaid. If you qualify for medicaid you are not eligible for ACA. Income amounts vary from state to state in regards of how much income you need to qualify for either. If you have zero income $0, you will be put on Medicaid regardless of what state you live in. You don't have a choice.
When you apply for ACA they will ask you how many people are in your household, their ages and household income.
Any income coming into the household (including your wifes) which has to be reported to the IRS is considered as income as far as ACA including taking money out of your 401k, so your scenario of showing 0 income won't work.
thanks for the info, but my scenario will work. Taking money out of a Roth 401K, Roth IRA, or out of a Brokerage account (that do not have any capital gains) do not count. I am lucky that in the past I have been able to contribute to them and have enough "after tax" money to live on for a bunch of years (and by "me", I mean "us", i.e. wife+me).
Obviously I would like to take a little out of my "taxable" accounts each year (since I will have to pay taxes on them at some point, and might as well when my rate is low).
But it doesn't make sense to if it is going to cost me my ACA subsidies
The most important statement in your reply is "If you qualify for Medicaid you are not eligible for ACA" which I too believe is true, but I cannot find any proof. Also there is the case where something happens and you do not expect to qualify for Medicaid, but then end up qualifying. What happens in those cases
You do have to have a minimum income to qualify for the ACA and it's subsidies. If you fall below you will lose all subsidies since you qualified for Medicare. On the ACA site you can play around with different income levels and see exactly how it affects the coverage and subsidies. I recently went on Medicare but my wife has one more year of the ACA before she goes on Medicare.
Like you, I use my 401k withdrawals as my income and take from savings as needed. For just the two of us by keeping income in the $22K range she receives an approx $1k subsidy on the ACA. Monthly cost is approx $125. I can only imagine the cost savings for a family of 4 under this scenario.
According to this article (https://www.verywellhealth.com/healt...st-you-1738407), if you overestimated your MAGI, typically you would get any additional subsidies back at tax time. But, if your overestimation moves you below the FPL, then you won’t get additional subsidy money. The good news is there is no penalty. However, the next year, you would have to prove your estimate number. If you don’t do this, and your plan auto-renews, you would no longer be getting a subsidy month to month (if you end up having income that year, you get subsidies at tax time).
So, looks like you can get away with this once, but would not be a viable plan for multiple consecutive years.
According to this article (https://www.verywellhealth.com/healt...st-you-1738407), if you overestimated your MAGI, typically you would get any additional subsidies back at tax time. But, if your overestimation moves you below the FPL, then you won’t get additional subsidy money. The good news is there is no penalty. However, the next year, you would have to prove your estimate number. If you don’t do this, and your plan auto-renews, you would no longer be getting a subsidy month to month (if you end up having income that year, you get subsidies at tax time).
So, looks like you can get away with this once, but would not be a viable plan for multiple consecutive years.
thanks, that is what I was looking for. So it looks like I wait until December and then I pull out just enough money to make sure I am out of the Medicaid zone.
In NJ the problem is that there are 2 numbers. At some point, My wife and I would no longer be eligible for Medicaid, but the kids would. I think that would just be a mess.
You best consider the consequences of pulling from your 401K before 59 1/2 Taxes and the some hefty penalties . The ACA expanded under the Cares Act this year let you have a pretty good income and still get a subsidy. If you have 401k dividends reinvested and can turn that off it will give you a revenue stream with out a penalty. Recognize the ACA may not be there past 2022. Someone is always trying their best to kill it with no real honest plan to replace it. If there was one it was never shown to the public.
I wish I never accepted it & died If your income is too low you have the choice of no heath coverage or Medicaid. Medicaid expansion only covers under 55 years old. Age 55 to 65 must pay back under medicaid recovery in NJ . Not all states do this. some find it discriminatory. I was paying $80 per month for health benefits until my heart attacks at 56 years old. Because my income dropped I was forced on Medicaid. I owe Approximately *58 THOUSAND Dollars + ONLY because I was a senior citizen between 55 & 65 years old. To make matters worse The agency that handles this Has new employees & NOW says I owe $164,000. Seniors are paying for the Medicaid expansion. It is CLEARLY age discrimination & some states refuse to collect it. If someone can bring this up with Governor Murphy I would appreciate it. He claims he against discrimination of any kind. We will see!
thanks, that is what I was looking for. So it looks like I wait until December and then I pull out just enough money to make sure I am out of the Medicaid zone.
In NJ the problem is that there are 2 numbers. At some point, My wife and I would no longer be eligible for Medicaid, but the kids would. I think that would just be a mess.
NJ will go after you if you need to use your medicaid. I am glad you are not risking your children's inheritance. NJ is a horrific state regarding the Medicaid Estate Recovery Act
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