Medicaid - Major Income Change Mid Year

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UrbanHomesteader
Posts: 87
Joined: Fri Apr 29, 2011 9:02 pm

Medicaid - Major Income Change Mid Year

Post by UrbanHomesteader »

To the esteemed ERE community, I'd like your thoughts on this health insurance/income scenario (asking for a friend):

Taxable income for first half of 2022 was higher than the ACA subsidy limit, due to a real estate deal (does not qualify for primary residence tax exclusion, nor 1031 exchange, etc.). Income starting with July 2022 and beyond is expected to stay under the Medicaid eligibility threshold.

This person is in their late 30s, has rarely used health care services, is feeling well, isn't due for a check up for another year. The current plan is to pay the out of pocket ACA premium in the amount of $271 per month through 2022 (since 2022 income will be in the six-figures on an annual basis), and then move to Medicaid in 2023 since income will be below the income threshold for Medicaid Expansion for all of 2023 and beyond in Semi-ERE phase of life.)

I have read elsewhere that Medicaid eligibility would be based on current monthly income or annual income, depending on which option allows a person to be eligible. This makes sense in terms of the seasonal worker who makes $4000 a month during the summer, but only $16,000 annually, and therefore qualifies on an annual basis. However, it makes less sense for the person who made $100k in 6 months, then dropped down to $800 month in interest and dividends for the rest of the year (and therefore qualifies on an monthly basis?).

I'm not particularly interested in the moral arguments around whether those with savings should be on Medicaid (I know this is addressed elsewhere in the forum). I'm more interested in experiences from those familiar with the program, and whether this scenario would likely qualify for Medicaid and/or if there are reasons to delay applying until 2023.

Laura Ingalls
Posts: 668
Joined: Mon Jun 25, 2012 3:13 am

Re: Medicaid - Major Income Change Mid Year

Post by Laura Ingalls »

Apply now. An advantage to being on now it that they are not subtracting anyone from the Medicaid rolls currently as a function of the pandemic health emergency. Excess income or eligibility for other coverage will not get you kicked off as in more normal times.

When that changes the feds have said they will give 60 days notice.

UrbanHomesteader
Posts: 87
Joined: Fri Apr 29, 2011 9:02 pm

Re: Medicaid - Major Income Change Mid Year

Post by UrbanHomesteader »

Thanks Laura, that's super helpful!


jim234
Posts: 59
Joined: Tue Aug 04, 2015 6:46 pm

Re: Medicaid - Major Income Change Mid Year

Post by jim234 »

It is monthly based. Previous months don't count.

Get in now and you are locked in to at least through Jan 2023 due to the pandemic emergency.

Monthly income limit is $1,563 for a one person house.

7Wannabe5
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Joined: Fri Oct 18, 2013 9:03 am

Re: Medicaid - Major Income Change Mid Year

Post by 7Wannabe5 »

The fact that ACA is yearly and Medicaid is monthly is kind of a big PITA for those of us who wish to be semi-retired with intermittent or uneven income distribution through the year.

jim234
Posts: 59
Joined: Tue Aug 04, 2015 6:46 pm

Re: Medicaid - Major Income Change Mid Year

Post by jim234 »

7Wannabe5 wrote:
Sat Sep 03, 2022 9:52 am
The fact that ACA is yearly and Medicaid is monthly is kind of a big PITA for those of us who wish to be semi-retired with intermittent or uneven income distribution through the year.
I don't see how this is a problem. If you are on regular ACA you will stay on until you do a re-estimate to drop into Medicaid. You can just stay on and not re-estimate and not drop in. NY does recerts yearly so once you are on you get a year, even if your income goes up. As long as it drops back by the recert date it will renew for another year.

7Wannabe5
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Joined: Fri Oct 18, 2013 9:03 am

Re: Medicaid - Major Income Change Mid Year

Post by 7Wannabe5 »

I over estimated my income several years in a row, because I wanted ACA rather than Medicaid, but I got busted for over-estimating, so now if I want to go back on ACA I have to provide proof in writing that Medicaid officially disqualified me. Which is okay for now because I have huge medical expenses, except for the fact that by happenstance the month of the year in which I need to requalify is also the month I am most likely to earn the most money from my 3 of my 4 tiny income streams.There’s probably some way to $0 balance out income in August with $3000 income in October and remain qualified, but I haven’t figured it out yet.

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Ego
Posts: 6359
Joined: Wed Nov 23, 2011 12:42 am

Re: Medicaid - Major Income Change Mid Year

Post by Ego »

7Wannabe5 wrote:
Mon Sep 05, 2022 10:26 am
There’s probably some way to $0 balance out income in August with $3000 income in October and remain qualified, but I haven’t figured it out yet.
IRA contribution.

UrbanHomesteader
Posts: 87
Joined: Fri Apr 29, 2011 9:02 pm

Re: Medicaid - Major Income Change Mid Year

Post by UrbanHomesteader »

I also read somewhere that if your annual income is below the Medicaid threshold, you shouldn’t be kicked off Medicaid even if you have 1 month/season above the threshold. You may have to explain the uneven income though.

jim234
Posts: 59
Joined: Tue Aug 04, 2015 6:46 pm

Re: Medicaid - Major Income Change Mid Year

Post by jim234 »

UrbanHomesteader wrote:
Mon Sep 05, 2022 4:09 pm
I also read somewhere that if your annual income is below the Medicaid threshold, you shouldn’t be kicked off Medicaid even if you have 1 month/season above the threshold. You may have to explain the uneven income though.
Uneven income takes some explaining. If income is recurring, say semi-annual or quarterly interest, that can be annualized and turned into monthly income. One time lumps are generally not going to affect you, unless they are recurring. Each state has a methodology on uneven income.

jim234
Posts: 59
Joined: Tue Aug 04, 2015 6:46 pm

Re: Medicaid - Major Income Change Mid Year

Post by jim234 »

7Wannabe5 wrote:
Mon Sep 05, 2022 10:26 am
I over estimated my income several years in a row, because I wanted ACA rather than Medicaid, but I got busted for over-estimating, so now if I want to go back on ACA I have to provide proof in writing that Medicaid officially disqualified me. Which is okay for now because I have huge medical expenses, except for the fact that by happenstance the month of the year in which I need to requalify is also the month I am most likely to earn the most money from my 3 of my 4 tiny income streams.There’s probably some way to $0 balance out income in August with $3000 income in October and remain qualified, but I haven’t figured it out yet.
Since we are still in a declared public health emergency no one gets dropped from Medicaid from March 2020 until now. Looks like it goes to through January 2023, but may extend or not, extensions are 90 days.

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