[California] Asset Elimination for Non-MAGI Medi-Cal

[frugalor]

I was doing some research on ACA health plans.  When income is too low, one is offered only the medi-cal plan.  But for people with a big investment portfolio, they won't qualify for the medi-cal plan.

It looks like that will be changed on January 1, 2024: https://www.dhcs.ca.gov/services/medi-cal/eligibility/Documents/Eligibility-and-Enrollment-Plan-Asset-Test-Changes-for-Non-MAGI-MC.pdf

It says: "Phase II, to be implemented starting January 1, 2024, will eliminate the asset test entirely."

So basically, it will be ok to have a very low income from 1/1/2024 and get the medi-cal plan for free.  Is that right?

[seattlecyclone]

I'm not in California, but I believe the "non-MAGI" Medicaid was already mostly just for the elderly, especially those in long-term care. People below Medicare age with low incomes and high assets have been able to get on "MAGI" Medicaid all this time in states that adopted the expanded Medicaid under the ACA. California is one of these states.

[jim555]

non-MAGI is elderly, disabled, blind Medicaid.  Expansion (18-64, childless, able bodied adults) is MAGI.  I read about this a while ago.  No other state does this.  NY has no asset test for QMB (pays all Medicare out of pockets), but not for nursing home care which still has a resource test.  I am curious how they will handle Estate Recovery and the 60 month look back and how that applies.

[frugalor]

Oh I see.  So Non-MAGI doesn't apply to normal FIRE people.

So there will still be an issue getting proper health insurance when the income is too low, right?

[jim555]

Oh I see.  So Non-MAGI doesn't apply to normal FIRE people.

So there will still be an issue getting proper health insurance when the income is too low, right?

It could apply once you reach age 65, MAGI turns into non-MAGI.  Usually Medicaid requires you to take sources of income like pensions and Social Security, but that will likely make someone go over the limit and not qualify.  Remember Medicare starts at 65 so that covers things.

Someone needing a nursing home could qualify because of a "spend down" of income, the cost of the nursing home reduces income and they qualify that way.

[frugalor]

I have been doing more research recently.  The MAGI Medi-cal, which does apply to FIRE folks, will eliminate the asset test as well on 1/1/2024.  That's very good news.

[jim555]

I have been doing more research recently.  The MAGI Medi-cal, which does apply to FIRE folks, will eliminate the asset test as well on 1/1/2024.  That's very good news.

MAGI has never had an asset test since it started with the Medicaid expansion, non-MAGI does.

[beekayworld]

... I am curious how they will handle Estate Recovery and the 60 month look back and how that applies.

By the by, California has a lenient look back period, only 30 months.
https://www.medicaidplanningassistance.org/medicaid-look-back-period/

[frugalor]

I have been doing more research recently.  The MAGI Medi-cal, which does apply to FIRE folks, will eliminate the asset test as well on 1/1/2024.  That's very good news.

MAGI has never had an asset test since it started with the Medicaid expansion, non-MAGI does.

Oh boy.  It is confusing stuff for me.  I thought I saw Magi Medi-cal had an asset limit.  After you said it, I searched again, so it does seem like it doesn't have asset limit: https://www.sdinsured.com/2022/04/medical-asset-limit-will-phase-out/

So if I lose my job today, even though I have more than $1 million in my investment portfolio, but because my income next month will be low (from interests and dividends and even plus unemployment), my whole family will qualify for Medi-cal?

[jim555]

I have been doing more research recently.  The MAGI Medi-cal, which does apply to FIRE folks, will eliminate the asset test as well on 1/1/2024.  That's very good news.

MAGI has never had an asset test since it started with the Medicaid expansion, non-MAGI does.

Oh boy.  It is confusing stuff for me.  I thought I saw Magi Medi-cal had an asset limit.  After you said it, I searched again, so it does seem like it doesn't have asset limit: https://www.sdinsured.com/2022/04/medical-asset-limit-will-phase-out/

So if I lose my job today, even though I have more than $1 million in my investment portfolio, but because my income next month will be low (from interests and dividends and even plus unemployment), my whole family will qualify for Medi-cal?

It only goes by income (MAGI), nothing else.

[frugalor]

I have been doing more research recently.  The MAGI Medi-cal, which does apply to FIRE folks, will eliminate the asset test as well on 1/1/2024.  That's very good news.

MAGI has never had an asset test since it started with the Medicaid expansion, non-MAGI does.

Oh boy.  It is confusing stuff for me.  I thought I saw Magi Medi-cal had an asset limit.  After you said it, I searched again, so it does seem like it doesn't have asset limit: https://www.sdinsured.com/2022/04/medical-asset-limit-will-phase-out/

So if I lose my job today, even though I have more than $1 million in my investment portfolio, but because my income next month will be low (from interests and dividends and even plus unemployment), my whole family will qualify for Medi-cal?

This is correct. My sister got laid off and first switched to an ACA Bronze plan while collecting unemployment benefits and once those ran out and her income waz lower she switched to Medicaid (Calif Medi-Cal) which also included dental coverage. She had a pretty large investment stash in 401k and tIRA and approx $100k in cash savings. None of it was counted toward her Medicaid qualification. Not even asked. Only her MAGI income. Technically she could qualify for lots of other things lime EBT (food stamps), ACP, etc but didn't do those. She eventually increased her income so switched to an enhanced Silver ACA plan at very little cost.

As a side note she was on Kaiser thru her work insurance and stayed on Kaiser while on both the ACA plans and the Medicaid plan with no change of doctors or really any change in healthcare.

Thanks for the info.  It's very helpful.  It makes me feel better about losing my job for going into FIRE.