Will Savings or Inheritance Disqualify Me From Medicaid or Cost Assistance?
SI was told by the system that I qualify for Medicaid because my husband is filing for disability (63) and I have been a homemaker for several years (57).
That was a great relief but my worry is what if you have some money in savings?
I inherited a bit when a parent passed. Will it disqualify me from getting medicaid?
Savings aren't counted when determining Medicaid or Cost Assistance. Inheritance tax is typically paid by the estate. In cases where you owe state inheritance taxes those are specifically excluded and cannot be claimed as a deduction. Therefore that amount does affect eligibility for cost assistance and Medicaid.
Learn more about Modified Adjusted Gross income and how income is counted for the purposes of ObamaCare.
I inherited $82,000 in December 2015 will I still be eligible for Obama care and do they consider that income ? And ,or will they raise my premiums?
It depends on the exact tax implications, generally yes and this will throw off your credits and cause you to have to repay them. Not a fun answer to give, but here are the details: https://obamacarefacts.com/advanced-tax-credit-repayment-limits/
Regarding inheritance: We hope to sell my deceased mother’s house next year and most likely there will be a capital loss on the cost basis. (I understand that capital gains are reported as income.)
Here is my question:
Presently, I receive Premium Tax Credits based on a modest income. My concern is that when IRS sees the “sale itself,” regardless of capital loss, then it will assume I received extra income that year from the sale, causing the IRS to see I will exceed 400% of the Federal Poverty Line limit – then I will need to pay back 100% of the Premium Tax Credits I might receive in that year which would be very costly.
This is not a loss I can afford to take, since the $ amount we will receive is not significant. I can find no information on any site regarding this. If I exceed 400% of the threshold then perhaps I am better off finding private insurance in that year.
Does the IRS LOOK ONLY at Adjusted Gross Income on page 1 of 1040 when determining PT Credits? Or will filing the required Schedules that outline the cost basis of the real estate and the sale of the estate trigger an event that will send me over the 400% poverty limit?
Any advice is welcome.
All taxable income (the falls under household income, so roughly MAGI of filer, and AGI of dependents) is counted to see if you qualify for premium tax credits. So a net loss will get you more tax credits (or disqualify you completely, but won’t result in the need to repay the full amount due to repayment limits if this is realized at the end of the year). A net gain could also disqualify you and result in you having to repay tax credits.
So the only thing is to be aware of what your net gain/loss will be and act accordingly.
When you say a “net loss could disqualify you completely” from PTCredit, would you clarify? Sounds like a significant capital loss would disqualify a taxpayer from PTC and cause him to migrate to Medicaid?
I expect the loss will be someplace in amount of 5-8K.
However, my understanding is that there is a yearly dollar amount limit on the write off such a capital loss on selling an inherited house – $3k a year. http://www.nolo.com/legal-encyclopedia/if-you-inherit-home-do-you-qualify-the-home-sale-tax-exclusion.html
My understanding of you answer also is that the IRS looks at the MAGI in terms of the premium tax credit, regardless of the capital loss amount. Correct? Thanks very much.
Realized that the yearly limit of 3k write off applies to those who “do not live in the home,” yet I do live at this residence. http://www.nolo.com/legal-encyclopedia/if-you-inherit-home-do-you-qualify-the-home-sale-tax-exclusion.html
So I suppose this does not apply to me.
I inherited a home from my father’s passing. I originally planned to use it for a rental & put a fair amount of money into it to sell. My income, I was told to use for Obama Care, was my SS which is $1102 a mo. & some earnings from part time work. NOW that I sold my home, how will that affect it? I also have an annuity & some in Credit union. ( these I never thought about bcuz haven’t touched them)
Lump sum payments wont always affect cost assistance, especially in terms of Medicaid and SS. However, the details are complex. I would contact your state medicaid department and have them offer guidance.
How can you be penalized for an inheritance you get thru the year? How do you know you are going to get that inheritance? My daughter was penalized for an inheritance she received from her grandparents. That just doesn’t seem fair as it was not income that she worked for. So she lost alot of money for this inheritance. She would of been so much better not getting the insurance and just paying the penalty at the end of the year. She spent so much on insurance thru the year and still got penalized. Not fair to people who try to do what is right. She had no idea her grandparents were going to pass and leave her some money. That was mostly taken by Obama Care. So unfair. You can’t make an honest living and try to get ahead without the goverment coming to take from you.
I signed up for Obama care last year with a projected income from my ira. At the end of the year , my non working wife inherited some money. I am now having my taxes done, and am being told that because of the inheritance I exceeded my income and need to pay $thousands back to obamacare. Is this true
This actually can be true. The credits are tax credits based on household income. If you inherited money and that affect your household income, then for better or worse you could owe back advanced credits up to the repayment limit.
My mom received an inheritance over $10,000 (but it’s below $20,000) a year or two ago, and will be collecting an additional $7,460 from a GoFundMe account set up in her name.
Will the inheritance and the GoFundMe gifts disqualify her from receiving Medicaid? Does she have to give the GoFundMe gifts she’s collected back?
I thought I’d add the amount came from an inherited Roth IRA.
P.S. My mom has no other income.
Most of the IRA 401k stuff can be figured out by asking “am I paying taxes on this now?” ObamaCare generally counts “taxable income”.
Income from GoFundMe would most certainly count as income in most cases. But Medicaid doesn’t just use annual income, so there could be some wiggle room. It depends on total amounts claimed versus deductions.
My husband has no income and he has been on Obama care Medicaid for about 2years he dad just passed away now will the state take his Medicaid card away or will they take his inheritance
I am currently on medicaid and disability, as I have 4th stage metastatic breast cancer (I am 40). I was able to sell my term life insurance policy though a viatical settlement, and am receiving $300,000. I will not have to pay capital gains tax on this, as I qualify for the two things that will keep me from having to pay capital gains- my prognosis is less than 2 years, and my condition is considered terminal. I presume as soon as I have the money, I will have to notify medicaid and they will cancel my health insurance, and I will have to go to the market place to find new health insurance?
Or would I get to keep my Medicaid insurance since the insurance money is not “income” and I don’t have to pay tax on it? What about my monthly disability check? Thank you!
I want to leave some money in my will to my daughter who is on SSDI. I know this would not disqualify her from SSDI income.
Does an inheritance interfere with Medicaid for her? She is married and her husband is also on SSDI. My daughter gets about $700 a month and I believe her husband gets a larger amount of at least $900 a month. He is also on SSDI. Thank you.
Yes. Inheritance does affect Medicaid eligibility and the results can be even more dramatic if she is covered by Medicare because of her disability. The best advice is to talk with an accountant and get advice on how to best to accomplish this. There are certain amounts that are excluded, certain types of trusts and/or savings accounts which you may be able to set up for her. Also call your state’s Medicaid office and ask for guidance, rules vary slightly by state.
Hello I am on medicaid insurance And i just received a inhertiance of 10,000 That i really need to start my life over. I am unemployed Will i lose my insurance.If i do Since I unemployed Willl i have to pay the Obama Fee Thank you Carolyn
Iam about to inherit 12,000 at the end of this month, my son and i have OHP, and i fully qualify for it. I have past debts that all of that money will be going to.. will i loose my ohp, and will this affect my son having insurance? hes almost 2… its crucial that he has medical insurance.
Getting a lump sum of that amount shouldn’t result in your child loosing healthcare, although I would 100% contact your local state medicaid department and marketplace or insurer (if you have marketplace coverage).
Essentially if you have Medicaid, the lump sum could mean you lose coverage for a month (but the child would likely be able to retain CHIP). If you have a marketplace plan, then it could affect cost assistance for the year (but wouldn’t boot you off of coverage).
Now, I assume you have Medicaid, so you should call your state Medicaid department, go over the situation, and ask.
Even in a worse case, lump sums will result in the loss of coverage only for a short period of time and then you can get back on it.
So this isn’t simple, but your call should be to the state medicaid office so you can better understand your options and how CHIP will be affected for you.
Based on my annual income I qualify for assistance from CoverCa. However, that annual income is based on an inheritance that I have invested in the stock market. I’m wondering if annual income is the only concern? Does my actual net worth factor in, also?
Thank you for any assistance.
Annual income is all that counts. That includes dividends and capital gains from selling stocks. With that said, really depends on your taxes. You either qualify for assistance based on distributions or Medicaid based on income. May seem strange to qualify for Medicaid and Marketplace assistance despite having wealth… but generally it counts income and not assets (although some states have unique rules).
I’ve received Oregon health plan for myself and children for over 10 years . As of March 2018 I will receive 1/2 of my mothers trust approximately $400,000 Which is about 1/2 of trust . And then in 10 years I’ll receive the remaining portion of her trust. My question is whether or not I will be responsible for re payment of all or just a portion of the medical care received by myself and my children..?
States are given a lot of leeway when it comes to state administered health plans. You should definitely call Oregon Health Plan help desk and ask them how this inheritance will effect your coverage. It shouldn’t effect treatments received while covered under Oregon Health Plan, but it could effect your eligibility for this coverage during 2018. Here are links for reporting changes: http://healthcare.oregon.gov/Pages/report-changes.aspx
My average income for Medi-Cal has been 5,000 annually. Now that I have received a death benefit lump sum check from a deceased parent, will I lose eligibility for Medi-Cal in 2018? Thanks for any feedback.
Survivors benefits for children have special rules, but it depends on your age. You should call the Medicaid office and inquire the details.
my sister is on medicaid. She is also on medicare and that is her only income. My father recently died. If she inherits $20,000 with that make her ineligible for medicaid?
A lump-sum payment that is taxable can impact assistance programs, lumps-um payments that are not taxable don’t.
Not all inheritance is taxable, so I don’t know the exact answer here 🙂
I will however explain the logic.
Taxable lump-sum income is counted for the month for Medicaid and Medicare and the year for ACA tax credits.
The result is that taxable lump-sum benefits can impact short term assistance through Medicaid and Medicare. If you think it will impact her, a good start is to contact the state Medicaid department and to have them help clarify the situation.
filing out for prescription drug plan for 2021, I receive SS only but have a Trust Fund with money I inherited from my Mom. Do I have to include this money as savings, bonds etc on the form? Was getting help 2020.
Inheriting a trust fund counts as income generally speaking. With that said, this isn’t a simple issue and especially if the amount is going to drastically shift your tax liability it would be worth taking the details to a tax professional. Trust fund inheritance is complicated enough depending on how the trust is structured and the amounts that there is no simple blanket answer for you.
I’m 43 and on SSA with one dependant. If I choose start building up a savings account, is there a limit of funds that can be in the account?
There is no wealth requirement with Medicaid or the ACA, nor is there for some forms of social security, but there is for some forms of Social Security Income and there can be costs for long-term care dependent on wealth if you use Medicaid state dollars to pay for that care. Since it isn’t a simple issue, you might ask a tax professional about your specific case to get the best possible advice for you.
My son and my family received medical due to my son medical condition. My wife is his caretaker Ihss in California. I earn about 56k.
We have been able to squirrel away $12,000 away in a savings account. Would this disqualify us from medical or would putting it in a CD account make a difference?
Your savings won’t disqualify you from almost any type of assistance aside from some types of end-of-life care.
I am applying to reduce my co-pays at the VA, One of the questions they as is whether I qualify for Medicaid here in Missouri. My income is within the guidelines. But I have checking ($20,000) savings ($17,000), IRAs ($25,000) and a mortgage free home (about $70,000). Do these assets affect my eligibility for Medicaid in Missouri? If so, in which ways?
You qualify fully for Medicaid.
In Missouri, Medicaid eligibility is based on income only. Therefore your savings do not impact your ability to qualify for Medicaid in Missouri.