What Happens at ACA Renewal if My Income Might Qualify Me for Medicaid in North Carolina?

Learn what happens if your income at ACA renewal might qualify you for Medicaid in North Carolina. Billy Jordan of The Jordan Insurance Agency explains how the Marketplace handles your application and what to do if your income changes.

In this episode

• How your estimated income affects ACA and Medicaid eligibility in North Carolina
• What to do if your income changes after renewing your Marketplace plan
• Which types of income and deductions count for Medicaid and ACA savings

Source: Count income & household size (healthcare.gov)

Billy Jordan is a licensed insurance agent (NPN 8699876) with The Jordan Insurance Agency, based in Charlotte, North Carolina. Voices in this episode are AI-generated, including Billy's, from a script reviewed and approved by Billy Jordan, a licensed insurance agent. General education only, not advice for your specific situation.

Tanya (AI host): What happens at ACA renewal if my income might qualify me for Medicaid in North Carolina? If you’re worried about where you’ll land this year, stick with us.

Tanya (AI host): Welcome to Smart Coverage. Real Advice., the insurance podcast from The Jordan Insurance Agency. I'm Tanya, your host, and I'm here with Billy Jordan, a licensed insurance agent and the president of The Jordan Insurance Agency.

Billy Jordan: Glad to be here, Tanya. This is a super common question, especially right now with incomes changing for a lot of folks. Let’s dig in.

Tanya (AI host): So, Billy, let’s start right at the top: what does the ACA actually look at when it decides if you qualify for Medicaid or savings on a Marketplace plan in North Carolina?

Billy Jordan: According to healthcare.gov, the ACA looks at something called your “modified adjusted gross income,” or MAGI. That’s your adjusted gross income from your tax return, plus a few things like nontaxable Social Security, tax-exempt interest, and untaxed foreign income. This is the number used to see if you qualify for savings on the Marketplace or for Medicaid.

Tanya (AI host): So it’s not just your paycheck or what you made last year?

Billy Jordan: Exactly. It’s your best estimate of your household income for the year you want coverage, not last year’s numbers. And it includes income for everyone in your household—like your spouse, and any dependents who are required to file a tax return.

Tanya (AI host): Okay, so at renewal time, if your income might be low enough for Medicaid, what does the Marketplace actually do with that information?

Billy Jordan: When you renew your Marketplace application and put in your estimated income, the Marketplace uses that estimate to determine if you may be eligible for Medicaid in North Carolina. If your estimate is at or below the Medicaid cutoff, your information may be sent to Medicaid. If you’re above that line, you’ll see what savings you qualify for on a Marketplace plan instead.

Tanya (AI host): So you could go from a Marketplace plan to Medicaid—or the other way—just based on your estimate?

Billy Jordan: That’s right. It’s all about what you put in for your projected income. For example, let’s say you had a steady job last year, but this year you’re working fewer hours and your income drops. If your new estimate is low enough, the Marketplace might tell you that you’re likely eligible for Medicaid.

Tanya (AI host): What if your income is kind of unpredictable? Like, you work seasonally or your hours change a lot.

Billy Jordan: Healthcare.gov says to use your current income and make your best estimate for the year. If things change mid-year, you can—and should—update your application. If you don’t, you could miss out on savings or owe money back when you file your federal tax return.

Tanya (AI host): Can you give an example of how that might play out for a real person?

Billy Jordan: Sure. Let’s say someone works in landscaping, and their hours go way down in the winter. When they renew their ACA application in December, they estimate their income will be under the Medicaid limit for the coming year. The Marketplace will send their info to Medicaid. If their income goes back up later, they should update their application right away.

Tanya (AI host): So what’s the risk if someone doesn’t update their income when things change?

Billy Jordan: The biggest risk is getting the wrong kind of help. If you don’t report an increase in income and you stay on Medicaid when you shouldn’t, or if you stay on a Marketplace plan with a subsidy you weren’t supposed to get, you might have to pay money back when you file your federal tax return.

Tanya (AI host): What counts as income when you’re trying to figure out if you qualify for Medicaid or Marketplace savings?

Billy Jordan: The Marketplace wants you to count most types of income—wages, self-employment, Social Security, unemployment, some types of retirement income, and so on. They use your “MAGI,” so you’ll start with your adjusted gross income from your tax return, then add in things like nontaxable Social Security and tax-exempt interest. Don’t count things like child support, SSI, veterans disability payments, or gifts—those aren’t part of MAGI.

Tanya (AI host): What about kids or dependents who have a little income, like from a summer job? Does that count?

Billy Jordan: Good question. According to healthcare.gov, you only count a dependent’s income if they’re required to file a tax return. If a child works just a few hours a week and doesn’t have to file, that income usually doesn’t count. But if they do have to file, you include it.

Tanya (AI host): Are there deductions you can take that might help someone qualify for Medicaid if they’re close to the cutoff?

Billy Jordan: There are some deductions the Marketplace allows, like certain student loan interest, alimony paid, or self-employment expenses. Only deductions recognized by the IRS and allowed by the Marketplace count.

Tanya (AI host): What’s a mistake you see people make when estimating their income for renewal?

Billy Jordan: The most common one is using last year’s income instead of estimating for the coming year. People just grab their tax return and use that number, but if your situation’s changed, that could throw things off. Another mistake is forgetting to include all household members’ income.

Tanya (AI host): So, if your income’s all over the place, you should just do your best and update if things change?

Billy Jordan: Exactly. The Marketplace expects your best estimate, not perfection. And if you realize later that your income is higher or lower than you thought, log in and update your info.

Tanya (AI host): Three things to remember. One, the ACA and Medicaid both use your estimated household income for the coming year—so update it if things change. Two, only count income and deductions the Marketplace asks for, and include everyone in your household who’s required to file taxes. Three, if your income drops low enough, the Marketplace may send your application to Medicaid in North Carolina, but you need to keep them updated if things change.

Tanya (AI host): For a personalized look at your situation, book a free thirty-minute chat with Billy and his team at thejordaninsuranceagency.com/podcast.

Billy Jordan: I'm Billy Jordan with The Jordan Insurance Agency. Until next time, take care.

Tanya (AI host): Thanks for listening to Smart Coverage. Real Advice. from The Jordan Insurance Agency.