Author Topic: Obamacare and Student Loan Disability Discharge/Insolvency  (Read 2072 times)

Chris1111

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Obamacare and Student Loan Disability Discharge/Insolvency
« on: April 08, 2015, 12:55:22 PM »
I have been on SSDI since December due to cancer and am in the process of having my approx. $10,000 (principle.. more like $14,000 with fees/interest) federal student loans discharged. I am easily insolvent as I don't own anything except clothing and a few assorted used things (no car or house). My question is does declaring insolvency on Form 982 also remove that as income reported to "Obamacare". I receive Medicaid through Arkansas' expanded access option and want to make sure that a 1099C for the forgiven loan would not somehow put me over the amount for eligibility for Medicaid. I couldn't afford a premium. At this time I make $13,044 a year and this year the epanded access limit is $16,105. So basically the insolvent amount would be like a "0" or something smallish in terms of it applying as "income" to figure my Obamacare premium.

In sum would a discharged student loan, using the insolvency option from Form 982 to show me totally or nearly insolvent, affect my reported income for Obamacare? Hope that makes sense.

Thanks so much!

Chris1111

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Re: Obamacare and Student Loan Disability Discharge/Insolvency
« Reply #1 on: April 08, 2015, 04:16:39 PM »
BUMP... A niche sort of topic I know but I'm still looking for help on this. Thanks!

grantmeaname

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Re: Obamacare and Student Loan Disability Discharge/Insolvency
« Reply #2 on: April 09, 2015, 11:40:47 AM »
Four hours is not very long to wait before bumping a thread that requires specialized knowledge to answer.

It looks like debt cancelled due to insolvency is not included in income for tax purposes. What that means for your Medicaid eligibility is a state-by-state question. You could call your state's medicare office or go to the state's website. But if the Arkansas definition of income is just federal gross income or adjusted gross income the forgiveness of your loan shouldn't affect anything.

Best of luck!

Chris1111

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Re: Obamacare and Student Loan Disability Discharge/Insolvency
« Reply #3 on: April 10, 2015, 01:11:42 PM »
Thanks for the reply!  I didn't realize I bumped it so quickly, but was feeling a little panicked.  Sorry about that.  Anyway... I went ahead and submitted for loan forgiveness.  Because of your reply and other advice I've received I feel pretty good about it not affecting my Medicaid.  Truly appreciated and if you or anyone else has got any more advice I'm all ears!

Chris

grantmeaname

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Re: Obamacare and Student Loan Disability Discharge/Insolvency
« Reply #4 on: April 13, 2015, 08:29:11 AM »
Glad to hear that. If you have any other trouble trying to coordinate between rules of different benefits you receive, there's a nonprofit called The Benefit Bank that has caseworkers that can help you. I had a friend who worked there for a year as part of an AmeriCorps program and her knowledge of the programs was astounding.

Tami1982

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Re: Obamacare and Student Loan Disability Discharge/Insolvency
« Reply #5 on: April 13, 2015, 09:37:41 AM »
I did a discharge due to disability with federal student loans in 2006.  It's a three year process that ended in 2009 (maybe the length depends on the disability.)  When discharged in 2009, there were no tax implications for it.  It's forgiven.  No 1099's.