Ways and Means Committee moves to redefine MAGI

Posted on October 13, 2011 | No Comments
Filed under 112th Congress, Congressional Action, Health Insurance, Medicaid and CHIP, Workforce and Access

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Implementation Briefs

Today, the House Committee on Ways and Means approved, 23-12, largely along party lines, legislation that would affect eligibility under federal health care reform law. The proposed legislation, H.R. 2576, revises the computation of modified adjusted gross income (MAGI) for the purpose of determining eligibility for premium assistance tax credits and Exchange subsidies, Medicaid, and CHIP. Under the current definition, MAGI equals adjusted gross income (AGI) plus any tax-exempt interest and foreign earned income otherwise excluded from AGI. Because a portion of Social Security benefits is currently excluded from gross income (and therefore from AGI) for income tax purposes, the current MAGI definition allows only the taxable portion of Social Security benefits to count toward eligibility requirements. Representative Diane Black (R-TN) introduced H.R. 2576 to expand the definition of MAGI to include the entire amount of Social Security benefits received. The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) estimate that the legislation would reduce deficits by almost $3 billion over the 2012-2016 period and by about $13 billion over the 2012-2021 period. CBO and JCT have found that adding nontaxable Social Security income to the MAGI definition would reduce Medicaid enrollment, beginning in 2014, by between 500,000 and on million people, depending on the year. The number of people purchasing insurance through the Exchanges could increase as a result.

Click here for H.R. 2576 background and proposal explanation.

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RWJF and Urban paper examines coverage trends among different groups targeted by the ACA

March 15, 2012

In a report entitled, "A Decade of Coverage Losses: Implications for the Affordable Care Act," the Robert Wood Johnson Foundation (RWJF) and the Urban Institute analyze coverage trends among children, parents, and adults without dependent children as a guide to coverage changes that could be expected in coming years without the Affordable Care Act. The report uses the 2000 to 2010 Annual Social and Economic (ASEC) Supplement to the Current Population Surveys (CPS) to project such trends. The study provides overall trends and trends by income, using the ACA's modified-adjusted gross income (MAGI) to categorize individuals. The paper also explores the extent to which changes in income distribution contributed to the last decade's coverage patterns.

The Center on Budget and Policy Priorities reports on Social Security "glitch" in ACA

July 18, 2011

A report released by the Center on Budget and Policy Priorities, "A Tempest in a Teapot: New Accounts, Policymakers' Statements Mischaracterize Supposed 'Glitch' in Health Reform Law," discusses a measure under the Affordable Care Act (ACA) regarding Medicaid eligibility for those who receive Social Security benefits. The ACA provision dictates that, in determining eligibility, Medicaid would no longer fully count Social Security benefits of applicants under the age of 65. House Majority Leader Eric Cantor (R-VA) claimed that this measure would cost taxpayers $450 billion over the next decade. However, according to the Center on Budget and Policy Priorities, the provision is neither unintended, nor is it very costly.

New NBER paper highlights importance of being covered by insurance

July 11, 2011

A new study released by the National Bureau of Economic Research (NBER) compares care seeking behavior and health outcomes of individuals covered by insurance with those who are uniunsured, and found better self-reported physical and mental health among those with insurance. The study, "The Oregon Health Insurance Experiment: Evidence from the First Year," offered Oregon Medicaid on a randomly-assigned, lottery basis to an experimental group of uninsured individuals, while the control group received no coverage. Lower out of pocket medical costs were also noted among the group receiving coverage.

CHIP open to children of low-income State employees

November 7, 2011

Prior to passage of the Affordable Care Act (ACA), section 2110(b) of the Social Security Act excluded children who were eligible for health benefits coverage under a State health benefits program from CHIP. Over time, however, it became clear that in some States, children of State employees do not have access to affordable, comprehensive coverage options. Many of these children were within the income eligibility level of their State's CHIP program. Section 10203(b)(2)(D) of the ACA amends the definition of a targeted low-income child by permitting States to extend CHIP eligibility to children of State employees who are otherwise eligible under the State child health plan. At least six states have taken advantage of the new provision.

HHS and IRS release NPRMs on exchange eligibility, tax credits, medicaid expansion

August 12, 2011

The U.S. Department of Health and Human Services (HHS) and the Internal Revenue Service (IRS) have released Notices of Proposed Rulemaking (NPRM) on Exchange eligibility and insurance premium tax credits, respectively. Additionally, the Centers for Medicare and Medicaid Services (CMS) has released an NPRM related to the Medicaid eligibility expansion authorized by the Affordable Care Act (ACA). All three NPRMs are designed to simplify Exchange eligibility and enrollment by coordinating with state Medicaid agencies and the IRS to determine eligibility for premium tax credits and Medicaid under the new expanded eligibility rules laid out in the ACA. Also addressed in the proposed rules is the eligibility and calculation of tax credits for small businesses. For more information on the Medicaid eligibility expansion, click here. For more information on tax credits, click here. For more information on Exchange eligibility, click here. Finally, for more information on tax credits for small businesses, click here.

Update: Health Insurance Premium Tax Credits

September 2, 2011

This Update is the third in a series on a group of three regulations, all of which are summarized at HealthReformGPS.org. Together the rules are designed to implement both the Medicaid eligibility expansions, the process of determining eligibility for premium tax credits and cost sharing assistance in the Exchange individual market, and standards for employers purchasing coverage in Exchanges. Collectively, the rules are designed to allow individuals and families to acquire and keep coverage and move more seamlessly among publicly-supported sources of health insurance as family income and circumstances change.

Update to Health Insurance Exchanges--Exchange Functions in the Individual Market: Eligibility Determinations and Exchange Standards for Employers

September 1, 2011

This Update to the health insurance Exchange Implementation Brief examines a proposed regulation issued on August 17, 2011 as part of three proposed rules to implement provisions of the Affordable Care Act related to health insurance affordability. Companion Updates explain the proposed Medicaid eligibility rule and the proposed rule related to health insurance premium tax credits; this Update focuses on Exchange functions related to determinations of eligibility for “Exchange participation and insurance affordability programs,” as well as standards for employer participation.

Update: Medicaid Program Eligibility Changes under the Affordable Care Act

August 31, 2011

This update to the Medicaid Implementation and health insurance Exchange Briefs reviews a Notice of Proposed Rulemaking (NPRM) implementing the Medicaid and CHIP eligibility, enrollment simplification, and coordination provisions of the Affordable Care Act. Issued by the United States Department of Health and Human Services on August 17, 2011, the rule is comprehensive in scope; its public comment period ends October 31, 2011. The Medicaid NPRM is part of a group of three regulations, all of which are summarized at HealthReformGPS.org. Together the rules are designed to implement both the Medicaid eligibility expansions, the process of determining eligibility for premium tax credits and cost sharing assistance in the Exchange individual market, and standards for employers purchasing coverage in Exchanges. Collectively, the rules are designed to allow individuals and families to acquire and keep coverage and move more seamlessly among publicly-supported sources of health insurance as family income and circumstances change.

Tax Subsidies for Individuals and Families Who Purchase Coverage Through State Health Insurance Exchanges

December 9, 2010

This Implementation Brief Includes Tax Subsidy Amendments Passed by the Senate as of December 9, 2010.

The Affordable Care Act (ACA) establishes a refundable tax credit for individuals without affordable employer coverage and ineligible for Medicaid: