I am on Medicare (66 years old), and married a woman of 58 this past summer. When she was looking into the cost of her insurance, she was told that my income ($1600 per month in Social Security), counted toward her income, so that there was no benefit to her in terms of receiving a credit on the cost of her insurance. Basically, she’d end up paying full price. Is this correct?


Answer

Non-taxable Social Security benefits are counted as income for ObamaCare and affect tax credits. This includes disability payments (SSDI), but does not include Supplemental Security Income (SSI). (Line 20a minus 20b on a Form 1040). ObamaCare counts Modified Adjusted Gross Income and that includes all non-excluded taxable income of all household members (even those on Medicare) after some adjustments.

One exception to the above is Social Security Survivor benefits of tax dependents who don't have to file taxes. If say, survivor benefits are the only income, a tax dependent can elect not to file and thus their AGI won't be counted toward household income.

In simple terms, SSI is not included in taxable income, but SSDI is. However, this only counts for those who are required to file taxes (like in our Survivors benefits example above where income was excluded for a dependent because they were not required to file).

SEE: Getting MAGI Right: When Does Social Security Income Count? from Georgetown.Edu.

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Lucious Parks on


Answer Rating:

Not quite. I elected to receive my social security early (64). I also receive a pension check. I don’t work anywhere else so this is the only income. The ACA helps subsidize my health insurance. My question is will my social security count as adjusted gross income and affect my ACA subsidy? I was originally told that my social security is not income.

ObamaCareFacts.com on

Social Security Income includes disability payments (SSD and SSDI), pension, retirement benefits, and survivor benefits, but does not include supplemental security income (SSI). (Line 20a minus 20b on a Form 1040). In general, everything except for SSI counts toward MAGI for ObamaCare and Medicaid.

So your pension would count. If you think about it you must make at least 100% FPL to get cost assistance under the ACA (not including Medicaid). That means that for someone with SSD or SSDI only counting the income is the only way to ensure access to tax credits.

https://obamacarefacts.com/modified-adjusted-gross-income-magi/

terry grant on

so if i have ssi and not sdi then the amount of credits i would recieve towards my monthly ppi would not be as much, as say i was to not get a ssi dispersment while believing in all this bssss.

ObamaCareFacts.com on

Right, SSI doesn’t count toward your income for cost assistance, but SSDI does. How this affects you depends on your other income and the state you live in (as for example, Medicaid is offered in some states based purely on income, but not in others).

Roxanne on

What Obamacare was first started it said only taxable income was included now all of a sudden social security is included with taxable income Obamacare is a joke

ObamaCareFacts.com on

The goal is one of good intentions. This allows those in states that rejected Medicaid to get assistance. Those with higher incomes get the short end of the stick though.

M.S. on

Ive been dealing with chronic illness for the last 2 years that i have survived and recovered from but i have huge debt now and trying to recover from that. I worked my whole life and have paid goverment and now am trying to get back on my feet and am regretting voting for the Obama hillary team!!!!! Such stupid law. I had insurance too thru my company and still walked away with over welming debt. My choice every month now is between rent or a medical premium. Or give the goverment another revenue stream w/ this stupid tax penalty. Ridiculous and just one of many examples how the middle class are struggling. It’s like the goverment wants you to be in the “poor-class” OR the “wealthy-class”.

Conrad Wareham on

Yes social security is income as far as the affordable healthcare act goes. Now you know the rest of the story. Something the politicians did not tell us. We have been bamboozled. This is a scam against people by our elected representatives. Think what would happen if this situation existed in the auto insurance industry. We would be paying high premiums and because the deductible would be so high we would be paying for our repairs while the insurance industry would be laughing all the way to the bank. This is exactly what is happening with the affordable care act.

terry grant on

this abomination is the closest thing i have seen to communistic rule, in my 61 years on this earth.

ObamaCareFacts.com on

Tens of millions of working poor got access to affordable coverage under the ACA (they were the main group of uninsured before the law). It isn’t all pretty, but with so much private market, costs, and uninsured it is hard to see this as “communistic rule.”

RICHARD FICK on

THANKS MR. PRESIDENT BUT THE NEXT TIME YOU WANT TO SCREW ME BUY ME DINNER FIRST,AND I AM SURE IF THE B%#CH GETS IN IT WILL BE MORE OF THE SAME

Paisley Woodstock on

I completely agree. One would think that if everyone covered paid their fair share that our health care payments will be evenly distributed in spite of SSA benefits thrown in. My husband and I are both retired (2016 first year for me)– we are both on SSA benefits and small annuities– so depended on Obamacare for 8 months. Looks like we will owe $15,248.00 of subsidy money vs. a $4,000 refund if Social Security income is excluded. I cant even count on my extreme solution of paying back all my SSA benefits this year as I cannot apply the payback to 2016 tax return. I love president Obama, but Obamacare is putting average individuals in dire straits.

Julie on

This is not a scam at all. I am 63 with a very low-paying seasonal job and I collect social security benefits. This combination of income adds up to allow me to qualify for the ACA. If my social security benefits were not counted I would have no health insurance at all, because I live in a state that did not expand Medicaid and I would fall into the non-coverage gap. Praise be for Obamacare!

Gloria on

Exactly! I am in this category as well. My only income is RSDI. If that income did not count, I too, would not be able to afford health insurance.

Jeff Johnston on

Thank God for Obamacare! My 557 a month is reduced to 64 dollars with subsidy Excellent Blue Cross insurance. Based on 21000 anual income for 1 person.

debra johnson on

I am basically in the your income bracket but have not had the same success of find that $64 price. Can you steer me to your findings?

TAXPAYER on

Nice you get a Free ride on Taxpayer Shoulders.

Tom on

Tax payer shoulders,ha, ha. You’re most likely a Green Bay Packer fan as well.
Those damn cheese heads. I’m in the same tax bracket as PE Trump. I pay no taxes!!!!

Joe on

a free ride? what an idiot

CHERYL BRISENO on

I asked if Obama care took money from social security?

nancy kern on

I am presently have subsidized health insurance (Obama Care) . this is my second year on (2016). I am also going to apply for it in 2017. I am 62 years old with limited income.
I am considering starting to collect my social security. I would like to keep the Obama care until I qualify for medicare. How will this affect my premiums and so forth

Cheryl on

Medicare sucks…it pays for nothing so I’m told

Ray on

I did a little research on medicare and found out that if you purchase the supplement B and go with a health program thru blue shield, they will cover you hospital, doctor visits, and drugs with no additional premium . It does not make any sense to go wih just medicare by itself .

Kay on

If your in good health you don’t need C or D coverage because the premium(s) could/ would cost more per year and you probably would never use it. Parts C and D are excellent for people who are sick or need medicine weekly, monthly etc. Be careful buying more is not always a good thing because those extras can cost $200. per month or more. If your really sick purchase, it if not wait until open season again next yr. and reevaluate your medical needs.

Apex on

This is not good advice. If you are on Medicare you’re of the age where you may be healthy at the moment but your risks of illness are significantly higher. If you opt out of Part D coverage and then suddenly find yourself requiring expensive medications you will pay through the nose 100% out of your own pocket until the next open enrollment. To each their own but I think it’s a bad gamble.

ObamaCareFacts.com on

Fully agree. Generally it makes sense to have Part C with drug coverage or Parts A, B, and D.

Keith J Pruett on

Can I use my Social Securiy Reitirement income to get Obamacare

S HENKINS on

DO THE INCREASED MAGI COUNT ONLY AFTER FEDERAL INCOME TAXES ARE TAKEN?
IF SO, AM I STILL LIVING IN AMERICA?

Erin on

MAGI is simply your Adjusted Gross Income (AGI) with some non-taxable income added back in. Here’s more information about how to calculate MAGI.

Richard on

I am 55 recently came disabled and my work insurance will be running out, I am collecting state disability and filed for socal security disability, i make to much on disability to quality of medical and to young for medicare, I went online and trying to get Abama care and it’s expensive I tried calling covered California to enroll to see if I could get subsidies I told them I was on state disability and she said they couldn’t do anything because I wasnt going to have taxable income..?? Why can’t I get help I do have income guarantee for a year while waiting for ssdi.

Erin on

There may have been a misunderstanding. As you know, even on disability you can have taxable income if you are employed or have other forms of income (like capital gains). You must make 100% of the federal poverty level in order to qualify for Marketplace insurance, but you should qualify for Medicaid in California if your income is too low for the Marketplace. If you are expecting your taxable income to exceed 100% of the federal poverty level, then call the Marketplace again and tell them that or simply use that income estimate when you apply online. Here is information about how to calculate your MAGI, which is the income used for Marketplace cost assistance.

Paisley Woodstock on

I started collecting SSA benefits in June 2016, and was enjoying subsidized ACA healthcare for 8 months after I retired from a 36-yr job. My husband retired 3 yrs ago at age 61 but i had both of us on my company healthcare, and last year was the first time in 36 yrs to not have this. I realized soon enough early this month Jan 2017 that our income crossed the threshold (slightly) that will allow the subsidies to stand, so my first instinct was to repay all my benefits immediately and ‘wipe slate clean’ until I am eligible for medicare 2 yrs from now. If I can apply repaid amount to 2016 tax return I will avoid paying subsidized amount of around $15000. Sounds like one cannot do that until the year after repayment occurred which means i am still stuck with $15000 tax bill.

George a cordero on

I am social security retired what is my cost

David on

I am 64 now and retired at 62 with a social security check of about $1734 per month. I have no other income and have been trying my darnedest to figure out if I owe any obamacare penalties and interest as I’ve never bought the insurance.. When I try to use the online calculators the talk about AGI that is taxable. I’m confused because I don’t pay taxes on my small amount. Does that mean I have no penalties or interest due then? Thank you so very much for your help in this matter 😉

Michael katz on

F this. The government makes it very difficult for seniors to live and is basically asking them to commit suicide.

Tom Latta on

I am an early retiree age 63. My only source of income is $1600/month social security and about $500/month drawn from an IRA account. Does this income level make me a candidate for ACA benefits? I’ve been told conflicting things about this from not only my broker, but also people who work for the exchange. By the way, the s.s.income is straight retirement income

ObamaCareFacts.com on

Generally it is confusing because some SS income and some retirement income is exempt. As a rule of thumb, if you pay taxes on it, it isn’t exempt and counts toward the limit. If you don’t, like with an 401k, then it doesn’t count.

Likely your income counts, which means if that is all your income then you qualify for cost assistance (as it is less than 400% and greater than 100%).

https://obamacarefacts.com/modified-adjusted-gross-income-magi/

Lillie Dyke on

How do you get the tax credit for health insurance on the Marketplace when your only income is Social Security? Social Security is not taxed so how does this work?

ObamaCareFacts.com on

Social Security is counted as taxable income for the marketplace (the marketplace tax credits use MAGI, a type of tally of taxable income).

This was done so those on Social Security can still access tax credits. Tax credits aren’t offered to those making under 100% of the poverty level, and in some states Medicaid was not expanded, so without this some on SS wouldn’t have access to healthcare.

Hope that makes sense!

Karen Shivel on

My son receives a monthly social security payment from the death of his father. I was told at one time that I didn’t need to include this money when enrolling for Obamacare. Now I’ve been told I do. Which statement is true? He is a minor and I claim him as a dependent.

ObamaCareFacts.com on

You do not include Survivor benefit income for dependents. If he was filing on his own he would include it, but he does not include it as a dependent.

https://obamacarefacts.com/questions/income-from-survivors-benefits-can-i-use-the-marketplace/

Diana Quintero on

I had to retire early at the age of 62. Covered California told me to take taxes out which I would get paid back and that way there it’s considered taxable income and I could get my insurance cheaper. I do not understand this. Otherwise I have to pay $700 a month for medical and I only make a little under $1,600 a month for social security. Does anybody know how to answer this?

ObamaCareFacts.com on

If you don’t make enough money to qualify for the marketplace then you can’t got marketplace coverage with tax credits and have to get Medicaid. So maybe it was about making sure your income was high enough to qualify for marketplace coverage with tax credits?

Woodrow Clegg on

How do I declare lump sum social security disability benefits

ObamaCareFacts.com on

If you you need to declare a change in income that would impact your tax credits, you can either update your profile on healthcare.gov or your state marketplace, or you can simply call the marketplace and let them know.

If you don’t, then you’ll have to account for the changes at tax time, and this could mean having to repay excess tax credits.