So I am thinking my final salary for the year will be around $40k reported. I will have maxed out my solo401k ($19.5k + probs $2k employer contribution), trad IRA ($6k), and HSA ($3550). When I do this my AGI is $8950, and this doesn't even take into account 1/2 self-employment taxes or paying for health insurance premium, which is deductible for me as a self-employed person (it was $600 for the year).
Anyway, I went to go apply for ACA yesterday in PA. I qualify for medicaid now maybe, whoops.
The ACA number it's telling me to re-enroll in my current $38/month high-deductible plan with an HSA is now a whopping $370 a month. Whaaa? It also said if I was potentially eligible for medicaid they would boot me off the state marketplace. All of the cheapest plans are in that $370 ballpark.
I would totally love to be back on medicaid- one of the programs covers acupuncture which is the main thing I would want covered with a health insurance plan (I didn't even find a plan from the marketplace that covered it last year). But I'm not sure what I qualify for or if I did the #'s wrong.
Can anyone advise me here? Is it cool to app medicaid, or do you have any advice to get that super high number down for the ACA?
Did you put in all your deductions (including 401k) correctly in the ACA application? If so, it should not be funneling you anywhere except medicaid, if, you did that. Here's a great primer on MAGI for ACA purposes, including CARES act changes:
https://laborcenter.berkeley.edu/pdf/2019/magi.pdfExcept, um, I don't think you understand MAGI correctly, perhaps. You cannot qualify for an HSA/deduction on medicaid, so maybe that's the issue. You cannot deduct your healthcare expenses as a self-employed person, because you won't have any (medicaid doesn't have premiums). So if you add back those two deductions (and maybe others), then your MAGI will be too high, 'eh?
Have you tried modelling your tax situation using tax software for 2019? That's a great tactic. So put in all your prospective 2020 numbers into 2019 software, and see what you get back. The ACA tax credits/expenses get trued up on your tax return when you file, so if you overpaid in premiums, you get it back, and vice versa.