What exactly is “MAGI”?
|November 9, 2011||Posted by Ashley Cohen under Blog||
We’ve been throwing around the term “MAGI” quite a bit lately when talking about eligibility determinations in 2014. My shorthand explanation has been, “MAGI is a simplified way of calculating income.” Thanks to a recently released report from Families USA, I can offer a more elaborate explanation of MAGI.
In 2014, all individuals below 133% of the Federal Poverty Level (FPL) will be eligible for Medi-Cal. Those between 133% and 400% FPL will be eligible for tax credits through the Exchange. Individuals who earn under 200% FPL and are ineligible for Medi-Cal could be eligible for a Basic Health Program (SB 703, which would create a BHP, will be voted on next year). California is one of 27 states that has Medi-Cal eligibility asset tests for parents. Parents must earn less than 100% FPL ($22,356/year for a family of four) and not have more than $3,150 in assets in order to be eligible. In 2014, eligibility for expanded Medi-Cal, Exchange premium credits and BHP will be determined based on a person’s MAGI.
MAGI, or Modified Adjusted Gross Income, is the household income a reported on federal tax forms. When determining eligibility, states will need to eliminate asset tests so that a person is not disqualified for having a savings account, owning a car, etc. To eliminate complicated disregards that vary from state-to-state, all states must also implement a 5% income disregard so that eligibility for Medi-Cal is actually expanded to 138% of income.
According to Families USA, MAGI will help prevent gaps in coverage, reduce paperwork burden on applicants, and ease transitions between programs.