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Understanding MAGI-Based Income and Resources Changes under ACA

This session provides an overview of how Modified Adjusted Gross Income (MAGI) methodology affects income types and resources for Medicaid and CHIP eligibility under the Affordable Care Act. Learn the myths and realities surrounding MAGI and its impact on financial eligibility rules.

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Understanding MAGI-Based Income and Resources Changes under ACA

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Presentation Transcript

  1. Affordable Care ActIncome/Resources Session 3 Presented by Tokie Moriel & John Tvedt DHS/DFO/IMTA/2013-07-15

  2. Objective • Present a high level overview of changes affecting types of income and resources under ACA DHS/DFO/IMTA/2013-07-15

  3. MAGI in Medicaid and CHIPMyth or Reality • Myth • MAGI is a number on a tax return which DHS can get and know what someone’s income is for purposes of Medicaid or CHIP • Reality • MAGI is a methodology which identifies whose income is counted in determining somebody else’s eligibility and what kind of income is counted DHS/DFO/IMTA/2013-07-15

  4. Myth or Reality • Myth • Financial eligibility rules are affected for EVERYONE • Reality • MAGI will be used to determine the financial eligibility for: • Iowa Health and Wellness Plan • Children • Pregnant women • Parents and caretaker relatives DHS/DFO/IMTA/2013-07-15

  5. Myth or Reality • Myth • Coverage through the Marketplace • Reality • Coverage through the Marketplace DHS/DFO/IMTA/2013-07-15

  6. MAGI-Based MethodologiesTypes of Income • Today • All income/money received, unless excluded, minus any deductions, disregards or diversions • MAGI-based income • Tax rules apply with exceptions • No income disregards, except 5% DHS/DFO/IMTA/2013-07-15

  7. MAGI-Based MethodologiesWhose Income Is Counted • Today • Consider all income of the members in the eligible group unless the income is exempted, disregarded, deducted or diverted • MAGI-based income • Income of adults, parents and spouses always counted (stepparents will be treated like parents) • Income of children in parents’ household counted if required to file a tax return DHS/DFO/IMTA/2013-07-15

  8. MAGI-Based MethodologiesHousehold Composition & Size • Today • Based on legal responsibility; parents and children living together, but prohibited deeming rules apply • MAGI-based households • Medicaid and tax households the same for most families • Certain exceptions apply • Rules for non-filers mirror rules for filers DHS/DFO/IMTA/2013-07-15

  9. MAGI-Based Methodologies • Household Composition and Size • Key changes for Medicaid: • Stepparents and stepchildren • Children/siblings with income • Children ages 21+ claimed as tax dependent DHS/DFO/IMTA/2013-07-15

  10. MAGI-Based Methodologies • Exceptions to adoption of tax household • Individuals other than biological, adopted or step children claimed as tax dependent • Children claimed by non-custodial parent • Married couples and children of parents not filing jointly • Pregnant women DHS/DFO/IMTA/2013-07-15

  11. Budget Periods (Point-In-Time) • Today • Current monthly income • Budget period under MAGI • New applicants/enrollees –current monthly income • State flexibility to account for predictable fluctuations in income DHS/DFO/IMTA/2013-07-15

  12. Income Standard Conversion • Today • Net income standard after deductions, diversions and disregards • Under MAGI • States to convert current net income standards to new equivalent “gross income” standards such that individuals do not lose coverage DHS/DFO/IMTA/2013-07-15

  13. MAGI Screen • First step: Eligibility based on MAGI • Everyone is first evaluated for eligibility based on MAGI-based income • Determination based on other factors for those not eligible based on MAGI • Same process regardless of application door DHS/DFO/IMTA/2013-07-15

  14. Income Exempted under ACA • Child support income • Depreciation of business expenses, including capital losses • Scholarships, fellowship grants and awards used for education purposes • Worker’s compensation • Veteran’s benefits • American Indian and Alaska Native (AI/AN) income derived from distributions, payments, ownership interests, and real property usage rights • Non-recurring lump sum DHS/DFO/IMTA/2013-07-15

  15. Asset Test for MAGI Households • There is no asset test for MAGI households • There are no changes to the asset limits for non-MAGI households DHS/DFO/IMTA/2013-07-15

  16. Conclusion • Additional ACA webinars • Session review – Income Maintenance Workers ONLY DHS/DFO/IMTA/2013-07-15

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