Why Were My ObamaCare Tax Credits Taken Away?
So this is for my girlfriend whom has had her tax credits every month of this year so far, and they just completely get denied for May. She has been paying Maine community health care options around 20 dollars a month. She is currently making around 800 dollars a month so I know she needs financial aid for her health coverage, and we are also trying to save up for college so the fact that her tax credits are not counted anymore freaks me out. Can someone explain to me how the tax credit system has completely failed her since she is making only 800 dollars a month, with a 200 dollar rent, and other expenses on top.
Answer
If projected dips below 100% of the Federal Poverty Level and that is reported to the Marketplace then you can lose your tax credits. The same thing happens if you have over 400% FPL, you can lose tax credits. To prevent this from happening you should consult the Federal Poverty Guidelines before updating your income on Marketplace. This will ensure you understand potential cost assistance changes.
Since cost assistance is based on projections there is nothing wrong with being confident that you will make (or not make if income is high enough) that extra 10% of the FPL or will that you will avoid taking a deduction to ensure you get access to tax credits.
Tax credits may also be lost for providing inaccurate information, for having coverage from another source, or through a mistake. If you lose tax credits your first step should be consulting the Marketplace to find out what happened. If your state expanded Medicaid there may be free or low-cost Medicaid options too!
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Sounds like based on your salary numbers she’s well within the fpl. The last reason given is probably what is causing the issue however, the answer is incomplete and therefore misleading. Rarely especially in the case of Obama care do people provide inaccurate information and the only thing that is really considered and affects costs and subsidies etc is income. If coverage has been in place and income had not changed then someone changed something. Have a friend who enrolled after selling home and moved. It took 7 months to get the address change between the insurance company and obamacare exchange. After 7 months and 128 phone calls, success. But that last phone call confirming address change turned into nightmare part deux. Somehow when the obamacare specialist pulled up the account, there was an extra zero added in the income portion therefore showing much higher income and not only invalidating subsidies she had received, but the policy as well.
Good luck. You are gonna need it.