<p>calmon. I am not sure of all the rules (who is?). But this is from the marketplace website:</p>
<p>"What if my income turns out to be different from what I estimate? </p>
<p>When you apply for coverage in the Marketplace, it’s important to double-check the information you put on your application. If the amount of expected income you report turns out to be inaccurate, you may not get the right amount of premium tax credit.</p>
<p>◦If you wind up making more money than you estimated on your application, you could have to pay back some or all of the premium tax credit you’ve received. You would make this payment with your next tax return.</p>
<p>◦If you wind up making less money than you estimated on your application, you could qualify for a higher tax credit. You would get this money refunded on your next tax return.</p>
<p>During the year, it’s very important to report changes in your income or household size to the Marketplace as soon as possible. You can adjust your tax credit so you don’t wind up owing money or getting a big refund on your next tax return."</p>
<p>If someone truly has limited funds then Medicaid is a great option for them. But if someone is sheltering their money for the sole purpose of manipulating the system and again getting something for nothing, then they deserve what they get.</p>
<p>Yes, I’m glad my son qualifies for Medicaid. His hospital bill last year was over $32,000 and our part of the bill was over $9,000. We applied for Medicaid, and they paid his bill retroactively! His meds are also hundreds of dollars a month, and Medicaid covers all of them. The program is a lifesaver for a lot of people. I don’t know what we would do without it.</p>
<p>“If someone truly has limited funds then Medicaid is a great option for them. But if someone is sheltering their money for the sole purpose of manipulating the system and again getting something for nothing, then they deserve what they get.”</p>
<p>Well, this is hard one. I mean manipulating the system really should be prevented by the law because expecting people not to use the system to their advantage is not reality. It should be, but that’s a little naïve. So, if people can do this the law is terribly flawed.</p>
<p>Well…assets are not counted at all. So a person could have millions in real estate, and untapped retirement accounts, and presumably qualify for subsidies, or Medicaid. Or all of their “income” could be via a Roth which isn’t counted either.</p>
<p>It boggles my mind that we are supposed to be able to guess at what our income will be for the upcoming year. I’m guessing that a salaried individual came up with that idea. The self-employed can really only guess - unless there’s some really good crystal ball out there that I can borrow…</p>
<p>DH and I have a few degrees between us and we still find this very confusing and difficult to navigate. I can only assume that many just take a guess at the best option for theand move</p>
<p>If you get your income guess wrong, it’s reconciled at tax time. If you guess you’re eligible for a subsidy and your income comes in lower than your guess, you’ll get a tax refund. If you guess you’re eligible for a subsidy and your income comes in higher than your guess, you’ll owe taxes. That doesn’t seem terrible to me. </p>
<p>A big problem, though, would be if you guessed that you’d be at under 400% of FPL, and you ended up over 400% of FPL-- then you could owe a lot of tax. That’s something to watch out for. It’s also something to prevent, by putting some income in tax-advantaged accounts to move your income under 400% of FPL.</p>
<p>Our income has fluctuated pretty wildly over the years since my DH had been self-employed. We just looked at last year’s income and used that to determine our income for this year, but we are reasonably certain that our income will be different this year - just don’t know if it will go up or down. We do get a subsidy but we are not near 400% of FPL so no worries there. We just dislike the uncertainly - will we owe taxes here. </p>
<p>Marie, most people are ethical, moral beings. Those who purposely hide millions to manipulate the system are something I would typically want to scrape off the bottom of my shoe. Just because something is legal doesn’t make it right moral or just</p>
<p>That behavior is encouraged by our current tax system, and everyone does it so I really see this as the next level and since the IRS is the enforcer maybe it’s just become part of the same thing. So far, we are paying full freight, though. And, that doesn’t mean I disagree with you. I don’t. Although, I may be more cynical. or maybe realistic. Bottom line, it really shouldn’t be possible and not counting assets is a really dumb policy.</p>
<p>Calmom, whose income is also uncertain, recommends people in your situation estimating high, so that at the end ifof the year if your income is lower, you get a refund. It all depends on your psychology, though: do you want to have the money during the year and then maybe pay it back at tax time, or do you feel better with the security of not having the money during the year and then maybe getting a refund?</p>
<p>Oh please, everyone uses the tax system to their advantage and there are people you can hire to do it for you. The ethical line is fuzzy and getting fuzzier. But that could easily be fixed by a better law.</p>
That theoretical person would be far better off to use their assets to generate income than to try to reduce income in order to qualify for a few thousand dollars of reduced insurance costs over the year. </p>
<p>The only time it makes sense to manipulate income is for people who are near the 400% cutoff, and who truly would face financial hardship without the subsidies. So in that case, the “manipulating” would tend to involve an amount of money smaller than whatever the subsidy is worth. That is, it makes no sense logically to forego $10K of income in order to qualify for a $5K subsidy – the “savings” in that case is actually a loss of $5K. But if it is a $2K of income fora $5K subsidy, that’s a different matter. </p>
<p>Okay, I didn’t say everyone hides millions and most people don’t have millions and most people with millions don’t want to be on Medicaid. But, some manipulating will go on and is going on as we can see by this thread and the law allows it. That is my only point and it’s not controversial at all since it’s a plain fact. The level where it bothers people seems to vary, though. </p>
<p>I am a student. I get the income fluctuation. </p>
<p>I could’ve, realistically, made anywhere from 3k to 25k this year. I ended up somewhere in the middle. This year alone, I have been on the Marketplace (BCBS) insurance, Medicaid, and then university-paid insurance. Now I’m going back on Medicaid as of Jan 1st. </p>
<p>My situation is not unique and it is to be expected, especially with young people. Whenever there was a change, I just reported it. The only pain has been trying to get the state of Michigan to cooperate as they’re very slow with Medicaid… </p>
<p>Come tax time, I’m not sure what will happen but to be honest, I’m not all that worried. Whatever happens, happens. I’m just happy to have had insurance for a full year for the first time since I was about 18. </p>
<p>Bookreader, you can give the income/MAGI the best, reasonable estimate. Then, during the year, if it appears you’ve been too high or low, you call them and modify. I’ve got the same issue. </p>
<p>Marie, if you have questions, feel free to ask them. But whether or not you think some manipulate isn’t really the focus here.</p>
<p>Yes, I know that we can update our income, but realistically, you never really know if all your invoices will get paid until the end of the year. Until then, it’s all a guess. I don’t care for all this guessing. Especially when there is a negative consequence for incorrectly guessing. </p>