Help choosing a Covered CA health plan?

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Topic Author
cheapedy
Posts: 70
Joined: Mon Sep 19, 2011 2:44 am

Help choosing a Covered CA health plan?

Post by cheapedy »

My aunt recently asked me to help her sign up for a Covered CA health
plan now that enrollment has started. I have a basic understanding of
it and would appreciate some advice to help her find the best option.

She is a year away from Medicare, (63, turns 64 late Jan) a little
overweight, but healthy... no chronic conditions, non-smoker, not on
any medications. Household is two people, herself and her husband
(70, on Medicare). Combined income is around $25,000 from Social
Security and CD interest. 2016 AGI was $1,065 (don't understand this).

The bronze plans appear to be the most affordable options, many at $1
per month after deductions. But I don't fully understand how these
deductions work or apply in her case. My aunt does not mind paying
for a plan, as they have significant savings, own their own home, and
would prefer to not use Medi-Cal.
curmudgeon
Posts: 2630
Joined: Thu Jun 20, 2013 11:00 pm

Re: Help choosing a Covered CA health plan?

Post by curmudgeon »

It is important to go through the process to find out what the MAGI would be for their case. Their Social Security is apparently not taxable (common with low incomes), but the untaxed SS would be added to the AGI to make the MAGI for ACA. This is key to understanding the subsidy options. If she chooses a Bronze plan, there would be likely be a substantial deductible that would have to be paid out of pocket for any care before the insurance would start paying, but then there would be a max to the out of pocket and anything beyond that would be fully covered.

She might be eligible for a "cost sharing reduction" Silver plan, which would have higher premium, but low out-of-pocket costs.

If estimated income is too low, that can make Medi-Cal the only option. Drawing some money out of an IRA (or doing a Roth conversion) would bump up the income for ACA purposes. If husband has an IRA/401K, then next year RMD will be required and will increase income.
User avatar
CaliJim
Posts: 3050
Joined: Sun Feb 28, 2010 7:47 pm
Location: California, near the beach

Re: Help choosing a Covered CA health plan?

Post by CaliJim »

Also might be worth while to talk with a health insurance broker, in addition to Covered CA.

IMHO: be careful about EPO plans, especially if you are not in a densely populated area. Docs in the insurance companies EPO network can be hard to find in my neck of the woods. I almost got sucked into one last year... then did some research and heard some horror stories. I called around to ask if various docs I might use were in the EPO network. I got a lot of "I don't know", "Ask your insurance company", "Call the billing department" type run-around. And the online EPO directory was useless for doing this research.

Maybe some of the docs on the board will chime in. But it seems like some medical facilities can get kind of choosy about which insurance plans they will accept.
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Topic Author
cheapedy
Posts: 70
Joined: Mon Sep 19, 2011 2:44 am

Re: Help choosing a Covered CA health plan?

Post by cheapedy »

MAGI is the adjusted gross income plus any amounts excluded from taxation by section 911 (the exclusion from gross income for citizens or residents living abroad), any tax-exempt interest received or accrued during the tax year, and any portion of the taxpayer's social security benefits that are excluded from gross income.

So this means that my aunt does qualify. What she and I are still confused about is the premium tax credit. Does she pay the $586 monthly premium, then get a tax credit at the end of the year? Or is it credited at time of payment , and just pays the discounted premium of $1.
curmudgeon
Posts: 2630
Joined: Thu Jun 20, 2013 11:00 pm

Re: Help choosing a Covered CA health plan?

Post by curmudgeon »

cheapedy wrote: Sat Nov 04, 2017 10:57 pm MAGI is the adjusted gross income plus any amounts excluded from taxation by section 911 (the exclusion from gross income for citizens or residents living abroad), any tax-exempt interest received or accrued during the tax year, and any portion of the taxpayer's social security benefits that are excluded from gross income.

So this means that my aunt does qualify. What she and I are still confused about is the premium tax credit. Does she pay the $586 monthly premium, then get a tax credit at the end of the year? Or is it credited at time of payment , and just pays the discounted premium of $1.
Can be done either way. What is called "APTC" is having the tax credit paid directly, and you just pay the extra. This may require some paperwork to demonstrate the expected income. If your income is higher than projected, though, you will have to pay back some or all of the subsidy at tax filing time. Alternately, you can pay the premiums directly, and claim it as a refund with your tax return. Unlike some tax credits, the ACA ones will refund to you even if you don't owe taxes otherwise. Either way you have to fill out the associated form(s) at tax time. Most people would choose to have the credit applied directly (APTC), especially if there is no chance of having income go above the subsidy cliff ($64K for a couple).

It might be worth working with one of the free Covered CA help services; the actual online application is pretty awkward to use (as opposed to the "compare and shop", which is OK).
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