Author Topic: Medicaid and income question  (Read 1007 times)

tenant13

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Medicaid and income question
« on: January 15, 2019, 09:02:22 AM »
I'm about to FIRE in two weeks or at the very beginning of February (just to keep the insurance for another month). Conveniently it coincides with my gig ending so I'll be able to collect unemployment for a while. While that's happening I plan to dip into my cash reserves - and continue doing that for the next few years. The unemployment check is low enough to qualify for Medicaid but only marginally so and every couple of hundred $ could push me over the limit. How do I factor in interest from my checking accounts and dividends from my regular brokerage account? Do I claim the monthly interest as part of my monthly income? Dividends are paid quarterly however, how do I deal with those - add them in when they appear on my statement? What about one time bonuses from opening random bank accounts? I expect to get 1k from Ally and a buch of UR points from Chase that I believe they report as a cash bonus. I can control the amount of unemployment benefits I receive by not claiming them every week - it would just spread them over time. For safety I might do just that but I'd like to know how the system works in regards to this extra income.

radram

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Re: Medicaid and income question
« Reply #1 on: January 15, 2019, 09:10:03 AM »
I'm about to FIRE in two weeks or at the very beginning of February (just to keep the insurance for another month). Conveniently it coincides with my gig ending so I'll be able to collect unemployment for a while. While that's happening I plan to dip into my cash reserves - and continue doing that for the next few years. The unemployment check is low enough to qualify for Medicaid but only marginally so and every couple of hundred $ could push me over the limit. How do I factor in interest from my checking accounts and dividends from my regular brokerage account? Do I claim the monthly interest as part of my monthly income? Dividends are paid quarterly however, how do I deal with those - add them in when they appear on my statement? What about one time bonuses from opening random bank accounts? I expect to get 1k from Ally and a buch of UR points from Chase that I believe they report as a cash bonus. I can control the amount of unemployment benefits I receive by not claiming them every week - it would just spread them over time. For safety I might do just that but I'd like to know how the system works in regards to this extra income.

In my state (WI), you go to the state website to see if you qualify. You enter all income. I have the ability to enter income monthly, quarterly, or annually.

spartana

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Re: Medicaid and income question
« Reply #2 on: January 15, 2019, 10:47:55 AM »
You may want to go on an ACA Silver Enhanced plan while recieving unemployment so you don't have to worry about going over Medicaid income limits so much. Then when unemployment ends in 6 months you can apply for Medicaid. You don't need to wait for an open enrollment period to apply for Medicaid.

jim555

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Re: Medicaid and income question
« Reply #3 on: January 15, 2019, 10:55:25 AM »
Medicaid goes by regular recurring income on a monthly basis.  Income can be lumpy so it can be annualized and divided by 12.  The key is whether the income is regular and recurring.  Each local office has a methodology on how to handle irregular income.  It is possible to drop into Medicaid mid year if your income drops, for example your UI ends.  Then re-estimate your income and be redetermined.  While ACA income is based on calendar year, Medicaid is based on monthly income.  You can be on an ACA metal plan for 6 months, then drop into Medicaid for the last 6 months.  The ACA subsidy is based on your yearly income for those months you are on a ACA plan.  There is no subsidy reconciliation for Medicaid since it is not considered to be insurance and no subsidy is involved.

tenant13

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Re: Medicaid and income question
« Reply #4 on: January 15, 2019, 10:59:56 AM »
Quote
You may want to go on an ACA Silver Enhanced plan while recieving unemployment so you don't have to worry about going over Medicaid income limits so much. Then when unemployment ends in 6 months you can apply for Medicaid. You don't need to wait for an open enrollment period to apply for Medicaid.

That's a good idea. What do you guys think about doing a ROTH conversion during that period - I know it's taxed as income but is it reported as income and does it affect ACA/Medicaid? So... I go on unemployment, do the conversion during that time - just enough to stay within 12% tax bracket and to receive the ACA subsidy (not a lot probably :), then go on Medicaid when unemployment ends and my only income is my monthly interest and quarterly dividends.

jim555

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Re: Medicaid and income question
« Reply #5 on: January 15, 2019, 11:08:42 AM »
Quote
You may want to go on an ACA Silver Enhanced plan while recieving unemployment so you don't have to worry about going over Medicaid income limits so much. Then when unemployment ends in 6 months you can apply for Medicaid. You don't need to wait for an open enrollment period to apply for Medicaid.

That's a good idea. What do you guys think about doing a ROTH conversion during that period - I know it's taxed as income but is it reported as income and does it affect ACA/Medicaid? So... I go on unemployment, do the conversion during that time - just enough to stay within 12% tax bracket and to receive the ACA subsidy (not a lot probably :), then go on Medicaid when unemployment ends and my only income is my monthly interest and quarterly dividends.
Roth conversions are income for ACA purposes.  It will reduce your subsidy for those months you are on an ACA plan.  Once that is done and past while on ACA then it becomes a non issue as far as Medicaid is concerned going forward.

Rural

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Re: Medicaid and income question
« Reply #6 on: January 15, 2019, 07:40:54 PM »
Are you in a state that expanded Medicaid? If not, you also have to be very careful not to let income drop too low or you won't qualify for either Medicaid or ACA subsidies.

Monkey Uncle

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Re: Medicaid and income question
« Reply #7 on: January 22, 2019, 04:35:02 AM »
I thought most states require you to be actively seeking employment when you are collecting unemployment insurance.  Does your state have that requirement?

spartana

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Re: Medicaid and income question
« Reply #8 on: January 22, 2019, 05:10:15 AM »
I thought most states require you to be actively seeking employment when you are collecting unemployment insurance.  Does your state have that requirement?
Technically they do but often you don't have to provide a list of places you applied unless asked. My sister just transitioned from unemployment after a lay off to FIRE (and from an ACA plan to Medicaid after UI ran out) and her state (Cali) never asked her to provide any proof of job seeking...although they could.

jim555

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Re: Medicaid and income question
« Reply #9 on: January 22, 2019, 06:01:51 AM »
Some states have you go to a web site every week and attest that you are seeking work for UI.

tenant13

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Re: Medicaid and income question
« Reply #10 on: February 14, 2019, 02:41:12 PM »
The health insurance situation is so insanely convoluted that it almost makes me want to renounce my citizenship and settle down as far from US as possible. Between what I have already earned this year, upcoming dividends, interest and misc crap like bank bonuses etc. my yearly total will be too much to qualify for any ACA subsidies. And the unemployment payments apparently take me over the threshold for qualifying for Medicaid. And I live in NJ which passed its own individual mandate law penalizing people without insurance. So.... what I came up with is this: stay insurance-less for up to 3 months and collect unemployment, then go off unemployment for a while and jump on Medicaid... rinse and repeat until I will have collected everything they can pay me. Cynical? Perhaps? Effective? I hope so :)

Laura Ingalls

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Re: Medicaid and income question
« Reply #11 on: February 15, 2019, 07:02:25 AM »
Where does COBRA fit in this situation? 

I would use the retroactive nature of Cobra for March and April. Then you need to decide if continuing cobra, ACA, or Medicaid makes the most sense.  It might be cheaper to forgo EI for Medicaid.  No way would I go without coverage beyond the COBRA election period. 

Padonak

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Re: Medicaid and income question
« Reply #12 on: February 15, 2019, 07:20:55 AM »
Ptf

jim555

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Re: Medicaid and income question
« Reply #13 on: February 15, 2019, 08:17:20 AM »
Use the unemployment to buy a Bronze plan at full price.  Not the end of the world.

tenant13

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Re: Medicaid and income question
« Reply #14 on: February 15, 2019, 09:14:10 AM »
Where does COBRA fit in this situation? 

I would use the retroactive nature of Cobra for March and April. Then you need to decide if continuing cobra, ACA, or Medicaid makes the most sense.  It might be cheaper to forgo EI for Medicaid.  No way would I go without coverage beyond the COBRA election period.

My work plan related premium is already $956, Cobra would take it up to around $1500 a month. And to make that pill even more bitter the only doctor I actually need is out of network so I basically have to pay him out of pocket. Nope, not doing Cobra.

spartana

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Re: Medicaid and income question
« Reply #15 on: February 15, 2019, 09:32:22 AM »
I'm confused. If you are starting 2019 on unemployment with no other income sources you should be able to get an ACA subsidized Bronze plan for just a few bucks a month premiums plus whatever OOP costs. I think you can probably qualify for an Enhanced Silver Plan for a bit more in premiums but much much lower OOP costs. Isn't there a way you can just live off the UI benefit for 6 months and use cash to cover any other expenses? Is your non-earned taxable income so high that it would mean zero subsidies? If so then the cheapest non-subsidized bronze level plan is probably all you can do.