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Determining Income for Adults Applying for Medicaid and Exchange Coverage Subsidies: How Income Measured With a Prior Tax Return Compares to Current Income at Enrollment

A major goal of the Patient Protection and Affordable Care Act (ACA) is to significantly expand coverage and reduce the number of uninsured. Beginning in 2014, the ACA will establish a new continuum of coverage that will provide assistance to individuals with incomes up to 400% of poverty through a broad expansion in Medicaid and by making premium tax credits available to eligible individuals to purchase coverage through new Health Insurance Exchanges. The law standardizes the definition of income used to determine eligibility for Medicaid and the premium tax credits to Modified Adjusted Gross Income. Yet, there remain important distinctions related to the timing of the income used to assess eligibility. This analysis suggests that the timing of the income used to determine eligibility has important implications and that establishing simple procedures to collect current income will be important for assuring individuals receive the appropriate coverage and levels of assistance when they apply for Medicaid and Exchange coverage.

Issue Brief (.pdf)

SlidesGraphicMini25.gifSupplemental Slides Updated as of January 2012