Please provide your zip code to see plans in your area.
A TRUSTED INDEPENDENT HEALTH INSURANCE GUIDE SINCE 1994.
A trusted independent health insurance guide since 1994.
Under the Affordable Care Act, eligibility for Medicaid, premium subsidies, and cost-sharing reductions is based on modified adjusted gross income (MAGI). But the calculation for that is specific to the ACA – it’s not the same as the MAGI that’s used for other tax purposes.
The details of the MAGI calculation are outlined here. For most enrollees, it’s the same as their adjusted gross income (AGI) from Form 1040. But there are three things that have to be added to AGI to get MAGI under the ACA. If you have them, you must add in these amounts:
- Non-taxable Social Security benefits (this includes Social Security Disability Insurance benefits (SSDI), but Supplemental Security Income (SSI) does not get counted when the ACA-specific MAGI is determined)
- Tax-exempt interest (typically earned on municipal bonds)
- Foreign earned income and housing expenses for Americans living abroad
Obamacare subsidy calculator *
Estimated annual subsidy
$0
Income received as a lump sum is only counted as income in the month it’s received when determining eligibility for Medicaid (whereas it would be counted as part of an enrollee’s annual income for determining eligibility for premium subsidies), although there’s an exception for lottery and gambling winnings of $80,000 or more — those amounts can be counted as income spread out across up to 120 months.
If your MAGI is a little too high to qualify for health insurance premium subsidies, know that contributions to a pre-tax retirement account and/or a health savings account (HSA) will reduce your MAGI.
If you receive premium subsidies throughout the year (paid to your insurer on your behalf) based on your projected MAGI, the amount has to be reconciled on your tax return based on your actual MAGI for the year. But there’s no after-the-fact reconciliation process for Medicaid or cost-sharing reductions.
Related articles
Understanding how small differences in projected income can have a large impact on your health plan costs can be key to obtaining affordable coverage.
For low-income Americans seeking coverage in states refusing to expand Medicaid, awareness of a minimum income requirement can make the difference between coverage and no coverage.
Legislation signed today provides substantial premium tax credits and cost-sharing reductions to Americans receiving unemployment benefits.
How the Affordable Care Act's subsidies are calculated, and who is eligible to receive them under the American Rescue Plan.
Sweeping health reform legislation delivered a long list of provisions focused on health insurance affordability, consumer protections.
In general, deductions that reduce your AGI on your tax return will also reduce your MAGI for subsidy eligibility determination.