I can be on free Medicaid but I choose to pay for Obamacare. Wrong thinking?

[FIREin2018]

I Fired in 2018 at age 47.

My AGI is below poverty levels. My state is part of Medicaid expansion thus 140% poverty for AGI is needed to be on Obamacare.
I artificially increase AGI to above 140% poverty levels to be on Obamacare because my perception is that Medicaid is horrible health care.

For a single person like myself, 140% poverty is around $20k agi.
20k - 12k standard deduction = $8k that i'm taxed on, which is basically the cost of my healthcare.

I can afford the small tax on $8k income.
But am i wrong on Medicaid being bad health insurance?

[tj]

Maybe. Some states have terrible Medicaid. Some states have amazing Medicaid.

I didn't think $20k was enough to stay off Medicaid.

[maizefolk]

So you're paying around $600/year in federal taxes to get the kind of health insurance you want. That seems quite reasonable to me.

I'm also guessing the way you artificially increase your AGI is traditional to Roth conversions. So even that $600/year probably isn't all lost. You'll likely get some of it back later in your life when you're on medicare and have smaller RMDs from your traditional accounts because you converted more month to Roth accounts.

[spartana]

I think the quality of Medicaid coverage depends on your location. Big city with tons of medical providers seem to provide exactly the same level of coverage as non-Medicaid health insurance. Smaller more rural areas may 've more limited. I use the VA so no ACA or Medicaid (which I wouldn't qualify for anyways) but I know others here have used Medicaid and found it to 've great.YMMV.

[jim555]

All my docs from work took the MCO plans in my area.  Check and establish (with a doctor who takes your MCO) relationship before you get on Medicaid, so you are not a new patient.

Add:  If your docs are in your local Managed Care plans it is superior coverage with absolute billing protection and a max OOP of $200 a year.

[nalor511]

I think the quality of Medicaid coverage depends on your location. Big city with tons of medical providers seem to provide exactly the same level of coverage as non-Medicaid health insurance. Smaller more rural areas may 've more limited. I use the VA so no ACA or Medicaid (which I wouldn't qualify for anyways) but I know others here have used Medicaid and found it to 've great.YMMV.

This.

[Trifle]

Yep, totally depends on the state.  Another reason to want to stay off Medicaid is if you happen to be in one of the ~10 states that recoup the Medicaid health insurance costs from your estate after you die. (Health insurance and expenses, not long term care. The LTC recoupment is nationwide, and is (I think) limited to over-55 yo, but as far as I know there is no age floor on the health care expense recoupment, for the states that do it.)

[jim555]

Yep, totally depends on the state.  Another reason to want to stay off Medicaid is if you happen to be in one of the ~10 states that recoup the Medicaid health insurance costs from your estate after you die. (Health insurance and expenses, not long term care. The LTC recoupment is nationwide, and is (I think) limited to over-55 yo, but as far as I know there is no age floor on the health care expense recoupment, for the states that do it.)

It is only age 55 and older for costs incurred while 55 or over.  I think it can only go back 10 years max.

States with ACA Estate Recovery are Massachusetts, New Jersey, Iowa, Nevada, New Hampshire, North Dakota, Ohio, Rhode Island, Indiana, Utah, Maryland, and the District of Columbia.  The other states only do nursing home care costs.

[tj]

Yep, totally depends on the state.  Another reason to want to stay off Medicaid is if you happen to be in one of the ~10 states that recoup the Medicaid health insurance costs from your estate after you die. (Health insurance and expenses, not long term care. The LTC recoupment is nationwide, and is (I think) limited to over-55 yo, but as far as I know there is no age floor on the health care expense recoupment, for the states that do it.)

It is only age 55 and older for costs incurred while 55 or over.  I think it can only go back 10 years max.

States with ACA Estate Recovery are Massachusetts, New Jersey, Iowa, Nevada, New Hampshire, North Dakota, Ohio, Rhode Island, Indiana, Utah, Maryland, and the District of Columbia.  The other states only do nursing home care costs.

ACA Estate recovery? Or you mean Medicaid?

[jim555]

ACA Estate recovery? Or you mean Medicaid?

Yes, expansion Medicaid which was created by the ACA.

[Morning Glory]

I am a bit confused as ACA should be close to free after subsidies if you are just above the lower end of qualification. Whether it is better or not depends on where you live and if you travel a lot. Some states' ACA plans cover non emergency care out of state, whereas most Medicaid does not. OTOH with Medicaid you'll likely have no co-pays or deductibles for routine care and won't get balance billed if you accidentally go to the wrong hospital in your local area.

[jim555]

I am a bit confused as ACA should be close to free after subsidies if you are just above the lower end of qualification. Whether it is better or not depends on where you live and if you travel a lot. Some states' ACA plans cover non emergency care out of state, whereas most Medicaid does not. OTOH with Medicaid you'll likely have no co-pays or deductibles for routine care and won't get balance billed if you accidentally go to the wrong hospital in your local area.

Medicaid does cover out of state, Emergency room only.

"Under the MMC plan, the only out-of-network (OON) services covered are Emergency Room Services. These are services to treat an emergency condition in hospital facilities in the United States and U.S. territories (Puerto Rico, the Virgin Islands, the Northern Mariana Islands, Guam, and American Samoa). 

All other services would require a valid prior authorization (PA) on file before services are covered. "

[Morning Glory]

I am a bit confused as ACA should be close to free after subsidies if you are just above the lower end of qualification. Whether it is better or not depends on where you live and if you travel a lot. Some states' ACA plans cover non emergency care out of state, whereas most Medicaid does not. OTOH with Medicaid you'll likely have no co-pays or deductibles for routine care and won't get balance billed if you accidentally go to the wrong hospital in your local area.

Medicaid does cover out of state, Emergency room only.

"Under the MMC plan, the only out-of-network (OON) services covered are Emergency Room Services. These are services to treat an emergency condition in hospital facilities in the United States and U.S. territories (Puerto Rico, the Virgin Islands, the Northern Mariana Islands, Guam, and American Samoa). 

All other services would require a valid prior authorization (PA) on file before services are covered. "

Yes "emergency " is covered by Medicaid and most insurance policies.  There is a grey area though when a person is admitted from the emergency room (say you need your appendix out and the hospital manages your diabetes while you are admitted) or has an urgent but but not emergent condition (e.g. a UTI). I would trust Medicaid more than insurance companies not to try and weasel out of paying because of an overly narrow definition. The best case scenario would be to have insurance with a national network so that care is covered whether they deem it an "emergency " or not.

[tj]

I am a bit confused as ACA should be close to free after subsidies if you are just above the lower end of qualification. Whether it is better or not depends on where you live and if you travel a lot. Some states' ACA plans cover non emergency care out of state, whereas most Medicaid does not. OTOH with Medicaid you'll likely have no co-pays or deductibles for routine care and won't get balance billed if you accidentally go to the wrong hospital in your local area.

Medicaid does cover out of state, Emergency room only.

"Under the MMC plan, the only out-of-network (OON) services covered are Emergency Room Services. These are services to treat an emergency condition in hospital facilities in the United States and U.S. territories (Puerto Rico, the Virgin Islands, the Northern Mariana Islands, Guam, and American Samoa). 

All other services would require a valid prior authorization (PA) on file before services are covered. "

Yes "emergency " is covered by Medicaid and most insurance policies.  There is a grey area though when a person is admitted from the emergency room (say you need your appendix out and the hospital manages your diabetes while you are admitted) or has an urgent but but not emergent condition (e.g. a UTI). I would trust Medicaid more than insurance companies not to try and weasel out of paying because of an overly narrow definition. The best case scenario would be to have insurance with a national network so that care is covered whether they deem it an "emergency " or not.

Yes, I wish there was a handy list of states with national PPOs. I guess if you're location flexible you would just pick Florida. Hawaii is also one that does, but it (along with Alaska) has a higher AGI floor to say off Medicaid.

[Morning Glory]

I am a bit confused as ACA should be close to free after subsidies if you are just above the lower end of qualification. Whether it is better or not depends on where you live and if you travel a lot. Some states' ACA plans cover non emergency care out of state, whereas most Medicaid does not. OTOH with Medicaid you'll likely have no co-pays or deductibles for routine care and won't get balance billed if you accidentally go to the wrong hospital in your local area.

Medicaid does cover out of state, Emergency room only.

"Under the MMC plan, the only out-of-network (OON) services covered are Emergency Room Services. These are services to treat an emergency condition in hospital facilities in the United States and U.S. territories (Puerto Rico, the Virgin Islands, the Northern Mariana Islands, Guam, and American Samoa). 

All other services would require a valid prior authorization (PA) on file before services are covered. "

Yes "emergency " is covered by Medicaid and most insurance policies.  There is a grey area though when a person is admitted from the emergency room (say you need your appendix out and the hospital manages your diabetes while you are admitted) or has an urgent but but not emergent condition (e.g. a UTI). I would trust Medicaid more than insurance companies not to try and weasel out of paying because of an overly narrow definition. The best case scenario would be to have insurance with a national network so that care is covered whether they deem it an "emergency " or not.

Yes, I wish there was a handy list of states with national PPOs. I guess if you're location flexible you would just pick Florida. Hawaii is also one that does, but it (along with Alaska) has a higher AGI floor to say off Medicaid.

North Carolina has a national PPO available but it is a couple hundred per month more expensive than the second cheapest silver plan.

[tj]

I am a bit confused as ACA should be close to free after subsidies if you are just above the lower end of qualification. Whether it is better or not depends on where you live and if you travel a lot. Some states' ACA plans cover non emergency care out of state, whereas most Medicaid does not. OTOH with Medicaid you'll likely have no co-pays or deductibles for routine care and won't get balance billed if you accidentally go to the wrong hospital in your local area.

Medicaid does cover out of state, Emergency room only.

"Under the MMC plan, the only out-of-network (OON) services covered are Emergency Room Services. These are services to treat an emergency condition in hospital facilities in the United States and U.S. territories (Puerto Rico, the Virgin Islands, the Northern Mariana Islands, Guam, and American Samoa). 

All other services would require a valid prior authorization (PA) on file before services are covered. "

Yes "emergency " is covered by Medicaid and most insurance policies.  There is a grey area though when a person is admitted from the emergency room (say you need your appendix out and the hospital manages your diabetes while you are admitted) or has an urgent but but not emergent condition (e.g. a UTI). I would trust Medicaid more than insurance companies not to try and weasel out of paying because of an overly narrow definition. The best case scenario would be to have insurance with a national network so that care is covered whether they deem it an "emergency " or not.

Yes, I wish there was a handy list of states with national PPOs. I guess if you're location flexible you would just pick Florida. Hawaii is also one that does, but it (along with Alaska) has a higher AGI floor to say off Medicaid.

North Carolina has a national PPO available but it is a couple hundred per month more expensive than the second cheapest silver plan.

Florida's isn't overly cheap - though different zip codes make all the difference. Hawaii's seemed pretty cheap.

[Trifle]

Yep, totally depends on the state.  Another reason to want to stay off Medicaid is if you happen to be in one of the ~10 states that recoup the Medicaid health insurance costs from your estate after you die. (Health insurance and expenses, not long term care. The LTC recoupment is nationwide, and is (I think) limited to over-55 yo, but as far as I know there is no age floor on the health care expense recoupment, for the states that do it.)

It is only age 55 and older for costs incurred while 55 or over.  I think it can only go back 10 years max.

States with ACA Estate Recovery are Massachusetts, New Jersey, Iowa, Nevada, New Hampshire, North Dakota, Ohio, Rhode Island, Indiana, Utah, Maryland, and the District of Columbia.  The other states only do nursing home care costs.

@jim555 that’s not accurate.  Medicaid estate recovery (for health insurance, not LTC) is NOT limited to costs spent on people over 55.  You’re confusing it with the LTC recovery rules. 

My brother is FIREd and on Iowa Medicaid.  He’s under 55 and was notified by the state that he was subject to estate recovery. 

[tj]

Yep, totally depends on the state.  Another reason to want to stay off Medicaid is if you happen to be in one of the ~10 states that recoup the Medicaid health insurance costs from your estate after you die. (Health insurance and expenses, not long term care. The LTC recoupment is nationwide, and is (I think) limited to over-55 yo, but as far as I know there is no age floor on the health care expense recoupment, for the states that do it.)

It is only age 55 and older for costs incurred while 55 or over.  I think it can only go back 10 years max.

States with ACA Estate Recovery are Massachusetts, New Jersey, Iowa, Nevada, New Hampshire, North Dakota, Ohio, Rhode Island, Indiana, Utah, Maryland, and the District of Columbia.  The other states only do nursing home care costs.

@jim555 that’s not accurate.  Medicaid estate recovery (for health insurance, not LTC) is NOT limited to costs spent on people over 55.  You’re confusing it with the LTC recovery rules. 

My brother is FIREd and on Iowa Medicaid.  He’s under 55 and was notified by the state that he was subject to estate recovery.

It might be true for his state.  Every state is different.


In California,  the asset test for all versions of Medicaid is gone ,though there probably still is some asset recovery.

https://insuremekevin.com/medi-cal-asset-test-eliminated-beginning-january-2024/

[seattlecyclone]

Yep, totally depends on the state.  Another reason to want to stay off Medicaid is if you happen to be in one of the ~10 states that recoup the Medicaid health insurance costs from your estate after you die. (Health insurance and expenses, not long term care. The LTC recoupment is nationwide, and is (I think) limited to over-55 yo, but as far as I know there is no age floor on the health care expense recoupment, for the states that do it.)

It is only age 55 and older for costs incurred while 55 or over.  I think it can only go back 10 years max.

States with ACA Estate Recovery are Massachusetts, New Jersey, Iowa, Nevada, New Hampshire, North Dakota, Ohio, Rhode Island, Indiana, Utah, Maryland, and the District of Columbia.  The other states only do nursing home care costs.

@jim555 that’s not accurate.  Medicaid estate recovery (for health insurance, not LTC) is NOT limited to costs spent on people over 55.  You’re confusing it with the LTC recovery rules. 

My brother is FIREd and on Iowa Medicaid.  He’s under 55 and was notified by the state that he was subject to estate recovery. 

The Iowa government website says that estate recovery is only applied to people over 55 at the time of service or in long-term care at any age.

[Trifle]

Yep, totally depends on the state.  Another reason to want to stay off Medicaid is if you happen to be in one of the ~10 states that recoup the Medicaid health insurance costs from your estate after you die. (Health insurance and expenses, not long term care. The LTC recoupment is nationwide, and is (I think) limited to over-55 yo, but as far as I know there is no age floor on the health care expense recoupment, for the states that do it.)

It is only age 55 and older for costs incurred while 55 or over.  I think it can only go back 10 years max.

States with ACA Estate Recovery are Massachusetts, New Jersey, Iowa, Nevada, New Hampshire, North Dakota, Ohio, Rhode Island, Indiana, Utah, Maryland, and the District of Columbia.  The other states only do nursing home care costs.

@jim555 that’s not accurate.  Medicaid estate recovery (for health insurance, not LTC) is NOT limited to costs spent on people over 55.  You’re confusing it with the LTC recovery rules. 

My brother is FIREd and on Iowa Medicaid.  He’s under 55 and was notified by the state that he was subject to estate recovery.

It might be true for his state.  Every state is different.


In California,  the asset test for all versions of Medicaid is gone ,though there probably still is some asset recovery.

https://insuremekevin.com/medi-cal-asset-test-eliminated-beginning-january-2024/

I agree, every state could be different.  I was just objecting to the blanket statement that it was only for 55 plus. 

[jim555]

Age 55 is a Federal law.

Add:  Omnibus Budget Reconciliation Act of 1993 changed the age from 65 to 55.  All states are 55.

[Trifle]

Yep, totally depends on the state.  Another reason to want to stay off Medicaid is if you happen to be in one of the ~10 states that recoup the Medicaid health insurance costs from your estate after you die. (Health insurance and expenses, not long term care. The LTC recoupment is nationwide, and is (I think) limited to over-55 yo, but as far as I know there is no age floor on the health care expense recoupment, for the states that do it.)

It is only age 55 and older for costs incurred while 55 or over.  I think it can only go back 10 years max.

States with ACA Estate Recovery are Massachusetts, New Jersey, Iowa, Nevada, New Hampshire, North Dakota, Ohio, Rhode Island, Indiana, Utah, Maryland, and the District of Columbia.  The other states only do nursing home care costs.

@jim555 that’s not accurate.  Medicaid estate recovery (for health insurance, not LTC) is NOT limited to costs spent on people over 55.  You’re confusing it with the LTC recovery rules. 

My brother is FIREd and on Iowa Medicaid.  He’s under 55 and was notified by the state that he was subject to estate recovery. 

The Iowa government website says that estate recovery is only applied to people over 55 at the time of service or in long-term care at any age.

Wow that’s interesting.  Looks like the recovery folks there are trying to go rogue, not even following their own state law.  Thanks!  I’ll tell my brother. 

[FIREin2018]

I am a bit confused as ACA should be close to free after subsidies if you are just above the lower end of qualification.
Whether it is better or not depends on where you live and if you travel a lot. Some states' ACA plans cover non emergency care out of state, whereas most Medicaid does not. OTOH with Medicaid you'll likely have no co-pays or deductibles for routine care and won't get balance billed if you accidentally go to the wrong hospital in your local area.

I said it in my OP.

My state has expanded medicaid so to get on ACA, you have to have 140% poverty level, which is $20k as a single person.
20k - 12k standard deduction = $8k tax level

If i went with Medicaid, my tax bill will be $0 because the $12k deduction will offset any income from bank interest and dividends.

[jim555]

Iowa probably has some boilerplate notice they send to everyone.  The law is 55.

[jim555]

I said it in my OP.

My state has expanded medicaid so to get on ACA, you have to have 140% poverty level, which is $20k as a single person.
20k - 12k standard deduction = $8k tax level

If i went with Medicaid, my tax bill will be $0 because the $12k deduction will offset any income from bank interest and dividends.

Your taxes have nothing to do with anything.  The number is 138%, technically 133% with a 5% disregard.

[FIREin2018]

I said it in my OP.

My state has expanded medicaid so to get on ACA, you have to have 140% poverty level, which is $20k as a single person.
20k - 12k standard deduction = $8k tax level

If i went with Medicaid, my tax bill will be $0 because the $12k deduction will offset any income from bank interest and dividends.

Your taxes have nothing to do with anything.  The number is 138%, technically 133% with a 5% disregard.

Never heard of that before. What's a 5% disregard?

[jim555]

Never heard of that before. What's a 5% disregard?

That is how the law is written, 5% of income is disregarded.