Covered California Health Insurance Subsidies

You can find the formula on the IRS web site:

A = second lowest annual cost of available silver plans B = MAGI (modified Adjusted Gross Income) C = Federal poverty line.

Calculate B/C, and round to the nearest percentage point. Use the table on page 8 of the form 8962 instructions to find in income inclusion ratio (T). I think it's a piecewise linear function which is 2% of B/C < 133, and 9.56% if 300

inclusion ratio (T). I think it's a piecewise linear function which is 2% of B/C < 133, and 9.56% if 300

subsidy, and must sign up for Medi-Cal. There is some protection if your actual ratio is less than 133%, or is greater than your expected ratio, but the subsidy must be returned if your actual ratio exceeds 400%.

I think you meant 138% but I get the point and this was very helpful thank you!

Since A is a constant for a given tax year, where can we find the value assigned to A for a given tax year?

If I understand the basic idea here, they are actually penalizing the person who has less than 138% of Federal Poverty Line by the requirement to use Medical. Because Medical has additional tests based on assets, it would be possible for a person who makes less than 138% of Federal Poverty Line to end up not qualifying for any subsidy at all. I guess that is just government being government.

It's 133% in the instructions for the reconciliation form. We all know that IRS publications are not law, but it seems the sort of thing a proofreader would catch.

-- Arthur L. Rubin, AFSP, CRTP, Brea, CA

You are incorrect. There is no asset test for Medicaid until you become eligible for Medicare. Additionally, anyone who is eligible for government funded health care (e.g., Medicaid) is not eligible for the premium tax credit (aka the subsidy). And finally, the criteria for CHIP (Children's Health Insurance Program) is much higher than 138%. In CA, depending on the age of the dependent child, children can be covered at up to 317% of FPL.

You find A by entering the taxpayer's information (county, number of people in household, and ages) and sort the insurance listings for Silver plants by cost. It's not constant for a given tax year, as insurance premiums may depend on age.

In states which accepted expanded Medicaid, including California, there are no additional requirements for Medicaid/Medical. However, in other states, you may be correct.

-- Arthur L. Rubin, AFSP, CRTP, Brea, CA

The table actually goes from less than 133% to 400%. That's in order to handle those states that are using medicaid eligibility levels below

133%. For CA, eligibility starts at $1 less than 138%. The $ income level in the OP, were the 2017 FPLs times 138% for CA. At that level, you would not be eligible for Medi-CAl and would be eligible for the PTC.

people in household, and ages) and sort the insurance listings for Silver plants by cost. It's not constant for a given tax year, as insurance premiums may depend on age.

You enter this information where?

Covered California (or your Marketplace website). There is no other definitive source for the information. In fact, even if the Marketplace is wrong, it still provides the numbers you use on your return.

-- Arthur L. Rubin, AFSP, CRTP, Brea, CA