Not enough income for Obamacare?
January 1, 2021 11:40 AM   Subscribe

Filling out my healthcare application for 2021 at the last minute and I am terrified to discover that I am automatically being shunted into Medicaid due to extremely low income last year.

Our income situation is volatile -- some years we make a lot, other years nothing at all. We keep a large reserve in savings to cover the lean years.

Which has worked fine up until this year. When I plug my 2020 info into the state calculator, I am not offered any Obamacare plans at all, but am shunted directly into Medicaid. I do not want to lose our current Obamacare plan -- I want to keep our current healthcare plan and doctors exactly as is.

I know I am doing this at the ass end of the last minute (full disclosure: I have just had this dropped in my lap by my shamefaced spouse, who had assured me it was all handled). I've got a stiff drink to get me over that part of it, but could really use the advice of the hivemind on how I might handle the rest of it. Thank you.
posted by anonymous to Work & Money (22 answers total) 4 users marked this as a favorite
What state are you in?

I have inconsistent income (a writer) and live in New York State and frankly--the years we get medicaid are awesome. Our state uses medicaid managed care plans, so you pick an insurance provider, just like normal. Our regular doctor takes it, it just means that visits cost nothing and meds cost a dollar. Not having to pay premiums is a huge relief. Have you looked at the available plans? This might not be the disaster you think it is.
posted by PhoBWanKenobi at 11:42 AM on January 1, 2021 [18 favorites]

Medicaid is the best insurance I've ever had for the couple of years I was able to get it. What state are you in? You can still buy a private insurance plan in addition to Medicaid where I live (Colorado) but it's so expensive I've never heard of anyone doing that.
posted by zdravo at 12:15 PM on January 1, 2021 [6 favorites]

Frankly at this point I would call at 1-800-318-2596 and talk to someone to get the info you need re: your options. Make sure that someone can check that you can actually still get insurance on the Marketplace today - the window closed on December 15th for renewing/joining Obamacare. I don't think "spouse fucked up" is considered a significant enough Life Event to allow for special enrollment.
posted by tzikeh at 1:05 PM on January 1, 2021 [3 favorites]

Here is another person who wishes they could get back on Medicaid. It was great. Being forcibly transitioned to Medicare at the age of 49 after two years of permanent disability was a big step down.
posted by seasparrow at 1:05 PM on January 1, 2021 [2 favorites]

In my state the cutoff is 138% of the federal poverty level. I think this can differ though, so check and see what the cutoff is for your state and household. If you're close to the cutoff, I don't think anyone can predict next year's income to the exact dollar, if you know what I mean.

That being said, before you worry too much, read up on what the medicaid coverage is actually like before you decide what to do. In my state it's really good.

Being outside open enrollment, your medicaid eligibility may be a big blessing, because I don't think you can get a new marketplace plan today.
posted by fritley at 1:08 PM on January 1, 2021 [3 favorites]

NYer seconding that the Medicaid plan I was on was great. Fidelis. My doctor group accepted it and so did my pharmacy. I paid virtually nothing for top doctors.
posted by AugustWest at 1:25 PM on January 1, 2021

I was scared of Medicaid too, but it has turned out to be great (in Philadelphia.) The doctors I'd want to see take it, a medicine that wasn't in their formulary got approved to be covered ($1/fill) when my NP filled out a special form, and I see a therapist (who isn't an intern, even!) for free.

Assuming open enrollment is indeed closed in your state now (some extended it into January), sign up for Medicaid and if your income changes that will be a qualifying event and you can then sign up for Obamacare outside of open enrollment. And in the meantime you'll be covered in case anything happens. If open enrollment isn't closed in your is true that no one can predict their future income precisely, as mentioned above. Though I don't know what numbers you're working with and whether it seems reasonable to estimate some amount that is above the Medicaid limit.
posted by needs more cowbell at 1:35 PM on January 1, 2021 [3 favorites]

I’ve gotten better, easier to access healthcare on medicaid than I was ever able to buy. For example, I’ve never once gotten a surprise bill for anything.
posted by velebita at 2:01 PM on January 1, 2021

My State didn't agree to the medicade option. So I don't take the automatic income deduction if I need to show a greater adjusted gross income in order to qualify.

But take the medicad if it's any option at all.
posted by mightshould at 2:21 PM on January 1, 2021

I really like my medicaid plan. If you are able to keep your same doctors I would recommend keeping medicaid.
posted by NotTheRedBaron at 2:35 PM on January 1, 2021 [1 favorite]

In case this framing helps: itself asks for your best estimate of what 2021's income will be, not what you made in 2020.
posted by teremala at 2:48 PM on January 1, 2021 [2 favorites]

Just chiming in that I got to be on Medicaid in Oregon for most of this year and it was amazing. I could not believe the greatness of it; it was, I think, like what it must be in other countries. I went to the doctor when I needed to and I didn't have to pay a dime. I had the surgery I needed and it was completely paid for. All the tests I needed were covered. I went to the dentist twice and it was covered. If I was less lazy and had gotten it together, I could have seen a therapist. I didn't have to fill out endless reams of paperwork; I didn't have to call and beg for something to be covered; I didn't get any horrifying surprise bills for hundreds or thousands of dollars that I couldn't pay. Nothing went to collections.

I wish I could have it back along with the stable just barely working class income I am making now. But that is, of course, only a crazy pipe dream of socialist utopia.
posted by mygothlaundry at 3:00 PM on January 1, 2021 [6 favorites]

Medicaid is awesome and everyone should have it because health insurance should be free or extremely low cost. So, no shame for using medicaid!

But, medicaid has some asset tests that are different than other health insurance options. If you have more than X amount in savings or Y amount in asset value in a house/car, I would be careful to look at the asset tests before you enroll. You may be grilled for all of this during the application process, but if you know the asset limits for medicaid in your state before you enroll then it might save you some time.
I read a horror story (I think it was in the atlantic?) about a woman whose mother was on Medicaid / medicare in her final years of life and when she passed away, medicaid attempted to seize the house that the daughter (who was also her caretaker, unpaid!) had inherited and yeah it was all just a mess. So be wary of that. Also, if you experience a significant jump in income, you must report it to medicaid, (say $0/ m income in January to like $2,500/ m in April jump). I am not sure exactly if that disqualifies you immediately from medicaid (because what if that was your total annual income, for instance) but it can affect your eligibility.
Source: I used to help people enroll in medicaid and yeah it is awesome if you can get it. Plus most major (nonprofit) hospital groups should accept you, and you'll get the best care!
posted by erattacorrige at 3:17 PM on January 1, 2021 [1 favorite]

In the past, we had the same problem with our excellent ACA insurance, and successfully and legally manipulated our apparent income by converting SEP-IRA and 401-K IRAs to Roth-IRAs. You have to pay taxes on the conversion quantity, but it boosts your apparent income, and if it fits into your plans and you are close enough to the borderline, it might be something to look at.

I believe we wanted to avoid losing our ACA insurance because a large number of doctors and medical centers did not accept patients insured by Medicaid. This is in CA, from three or four years ago.
posted by the Real Dan at 4:16 PM on January 1, 2021

In Medicaid expansion states(which you are probably in, since otherwise you have to be truly destitute to get in), the asset tests and all that don’t apply except for end of life nursing home care.
posted by rockindata at 5:20 PM on January 1, 2021 [3 favorites]

teremala: "In case this framing helps: itself asks for your best estimate of what 2021's income will be, not what you made in 2020."

Yeah, AFAIK you're eligible for a 2021 marketplace plan and subsidies based on your estimated income for 2021. You can base that estimate on your most recent tax returns if your income is roughly consistent, but that's not required. As far as subsidies go, if your income estimate is too high then you get a bigger tax refund to make up for the subsidies you would have gotten, but vice-versa if you estimate too low. In fact, if your 2020 income was lower than expected, this may come into play when you file your 2020 taxes. I think you won't be asked to cover the full unsubsidized amount for last year's coverage if your 2020 income ends up undershooting the threshold, but definitely talk to a marketplace advisor to make sure.

I'd also ask about the special enrollment process since the regular open enrollment deadline is already past; there may be some extra paperwork to do there.
posted by Rhaomi at 8:07 PM on January 1, 2021 [1 favorite]

Anyone can purchase an Obamacare plan, regardless of income. But you may have to pay full freight if you are not eligible for subsidies, either because your income is too low or your income is too high. But you can still buy the plan. And if you anticipate being eligible for subsidies this year, you need to buy your plan off the exchange, not off the exchange.

But the problem I see is for 2020, not 2021. If your income was too low in 2020, then you may have to repay any subsidies you received in 2020 when you file your 2020 tax return in April. You are responsible for reporting any major changes to your income throughout the year to avoid this problem.

But if you are not planning on getting subsidies this year, then you just need to tweak your application to increase your estimated income for this year above the maximum, that is, $68,960 for a family of two. If you do that, the exchange will allow you to purchase an Obamacare plan without subsidies.
posted by JackFlash at 10:00 PM on January 1, 2021

I'm in Ohio and I'll add to the Medicaid is wonderful chorus. I don't pay a penny for doctors, mental health care, dental care or prescriptions. I probably wouldn't be alive today if i didn't have Medicaid. I went from 440 pounds and suicidal to 170 and thriving.
posted by kathrynm at 6:52 AM on January 2, 2021

Echoing JackFlash, I had a similar issue and ended up reporting my expected income just high enough to avoid Medicaid. (Use the % of Federal Poverty Level (FPL) and State numbers to calculate). I even talked to a representative who said this was fine to report HIGHER to get less benefits, as long as you are not UNDER reporting your income to get more discounts.
posted by roaring beast at 1:11 PM on January 2, 2021 [2 favorites]

I even talked to a representative who said this was fine to report HIGHER to get less benefits, as long as you are not UNDER reporting your income to get more discounts.

This is not entirely accurate. Starting in 2019, the IRS changed the rules to prevent gaming of the system to avoid Medicaid and instead get a subsidized Obamacare plan on the exchange. If your estimated income for the new year is significantly above the poverty level of the previous year, the exchange will likely require additional documentation to support your new estimate.

... as long as you are not UNDER reporting your income to get more discounts.

This is the important part of your statement. If you reporting more income to move from Medicaid to a subsidized exchange plan, you are indeed getting more discounts, at least from the IRS point of view. That is because Medicaid is funded by joint state and federal funds, but when you get a subsidized exchange plan, you are getting a refund on your tax return from the IRS. So they want to avoid false claims.

There is a gray area here where you can make a good faith estimate that is not entirely false, but it may require additional documentation.

What I was referring to above is increasing your estimate so that you do not receive any subsidies at all just to get through the exchange screening. In that case you are getting no subsidies at all. Everyone is entitled to buy an exchange plan if they want to with no subsidies.
posted by JackFlash at 1:37 PM on January 2, 2021

I was not aware of those details, thanks JackFlash.
posted by roaring beast at 7:01 PM on January 3, 2021

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