Qualify for Subsidy, then Make Too Little in Non-Medicaid State?

[Ann H]

I don't agree with that, but I'm open to being shown where I'm wrong.

The issue isn't that your income decreased or increased. The issue is that you are ineligible for subsidies.

So, using Pancur's example, your income was 140%, then went to 130%. For this example I must use a state that expanded Mediciad, or else drop that 130% to 90% for a state that didn't expand Medicaid. That is because DGoldenz's original example was about a couple who qualified for a subsidy, then at the end of the year found out their MAGI income was Medicaid level. I'll drop it to 90% and use a non-expansion state to match DGoldenz's example.

So, the people got advances of the subsidy, then at tax time found they didn't fall into the 100% - 400% category for which subsidies are available, and also found out that being eligible for Medicaid made them ineligible for subsidies. Clawback. I haven't read anything that says there is no clawback if your income decreases. Nor have I read there is no clawback if you were eligible for a government sponsored program such as Medicaid.

They might be able to use month-to-month accounting and show that they had higher income for the months of January - November, and took a lot of deductions in December. Then, they may only be clawed back 1 month. But other than that work-around, I don't see how they get around a clawback of subsidies for which they were not eligible.

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EDIT

I need to correct my last paragraph. In thinking it through further, I don't see how month-to-month accounting would make any difference in this scenario where their income dropped to $1,000 for calendar year $2014.

There are month-to-month situations, like figuring the subsidy for the months you were married versus the months you were divorced. Or figuring the subsidy for the months you were NOT eligible for adequate/affordable employer-sponsored insurance vs the months that you were eligible. But there is no month-to-month accounting for the eligibility clause that deals with MAGI income level between 100% and 400% of FPL. It's all calendar year accounting.

 

[dgoldenz]

I don't agree with that, but I'm open to being shown where I'm wrong.

The issue isn't that your income decreased or increased. The issue is that you are ineligible for subsidies.

So, using Pancur's example, your income was 140%, then went to 130%. For this example I must use a state that expanded Mediciad, or else drop that 130% to 90% for a state that didn't expand Medicaid. That is because DGoldenz's original example was about a couple who qualified for a subsidy, then at the end of the year found out their MAGI income was Medicaid level. I'll drop it to 90% and use a non-expansion state to match DGoldenz's example.

So, the people got advances of the subsidy, then at tax time found they didn't fall into the 100% - 400% category for which subsidies are available, and also found out that being eligible for Medicaid made them ineligible for subsidies. Clawback. I haven't read anything that says there is no clawback if your income decreases. Nor have I read there is no clawback if you were eligible for a government sponsored program such as Medicaid.

They might be able to use month-to-month accounting and show that they had higher income for the months of January - November, and took a lot of deductions in December. Then, they may only be clawed back 1 month. But other than that work-around, I don't see how they get around a clawback of subsidies for which they were not eligible.

Yeah, this is what I'm trying to figure out. If their income drops to $1,000, they are not eligible for Medicaid and not eligible for subsidies, so what happens? Nobody seems to have anything in writing which clearly states what will happen to the subsidy money. They were never eligible for it in the first place if their income falls below 100% of FPL.

 

[ameneses54]

My understanding is what Ray quoted:

Worse case scenario, if I'm wrong, subsidy clawback for <200% FPL is capped at $600/family or $300/individual, a small part of the "huge" subsidy they received.

The "clawback" quote is very interesting---where did you get the info?

 

[TxOnline]

Here's a Kaiser Chart of Repayment Caps:

http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8154.pdf

....

 

[sman]

So here's a question, what will prevent someone who is below 100% FPL from overstating their income so they can get a subsidy knowing that they'd only have to pay back $300?

 

[Ann H]

Here's a Kaiser Chart of Repayment Caps:

http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8154.pdf
....

Be careful of that Kaiser chart. It is outdated. It was printed 2/2011, and the amendment to PPACA was signed by the President 4/2011.

The "clawback" quote is very interesting---where did you get the info?

See below

Yeah, this is what I'm trying to figure out. If their income drops to $1,000, they are not eligible for Medicaid and not eligible for subsidies, so what happens? Nobody seems to have anything in writing which clearly states what will happen to the subsidy money. They were never eligible for it in the first place if their income falls below 100% of FPL.

Here is your document in writing dgoldenz

It is H.R. 4, which President Obama signed into law 4/14/2011. It was the repeal of the 1099 provision of PPACA. As a part of that act was a change to the clawback provisions. The actual H.R. 4 is found here: http://www.gpo.gov/fdsys/pkg/BILLS-112hr4enr/pdf/BILLS-112hr4enr.pdf.

It's a 2 page document, and the clawback limits are at the end, under Section 4. It limits the clawback to:

$600 if under 200% of FPL
$1500 if at least 200% but less than 300% of FPL
$2500 if at least 300% but less than 400% of FPL
unlimited above 400%

Note that the dollar amount of clawback is for families. It is 1/2 that amount for singles.

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Please note that I edited my post #11 that I did at 9:19 AM, in order to correct a statement that I made, which I later realized was inaccurate.

 

[Yagents]

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