When applying for Health insurance in Texas, different factors play into how much your premium will be. First, how many individuals you will cover under your policy will be one primary consideration. Your current health condition is another. Even your income determines how much you will pay for an Affordable Care Act policy. But what about if you are older and on Social Security? Will Social Security count as income for Obamacare?
What is Social Security?
Social Security is a federal government program that uses taxes paid by working individuals and places them into a trust fund. It can then provide income benefits to those who are eligible. Each year you work, you build credits within your Social Security account by contributing to the program through payroll deductions. On the receiving end, the plan pays monetary benefits to those currently retired, those with disabilities, surviving spouses, and children of workers who have died.
Is Obamacare Different for Those with Social Security?
When you have Social Security and Affordable Care Act benefits, certain income is counted toward determining your eligibility for savings, and other factors are not included when it comes to Social Security. This may sound confusing but let’s explain the differences.
What is counted as income for Obamacare?
When it comes to taxes, it can get confusing as to what to include and what’s not important. You would think that with insurance, you would get a bit of a break, but under the Affordable Care Act, how much you pay, or rather how much you can save, depends on your tax status. Here is a quick explanation of how to estimate your income for health insurance for Austin residents.
Keep in mind that this will be an estimation based on the year you want coverage, not the current or past year. If you are unsure of your amounts, make the best guess possible. It is important to note that they consider all household members’ income. You, your spouse, and everyone within the residence, under the plan or not. If you are claiming them as a tax dependent, you must include them on the application.
With this in mind, Obamacare looks at your:
- Adjusted AGI on your federal income tax
- Excluded foreign income
- Tax-exempt interest
- Nontaxable Social Security benefits
- MAGI does NOT include Supplemental Security Income
The final listed may seem contradictory, but Supplemental Security Income is not funded by Social Security. It is a federal income supplement program funded by general tax revenues.
There are certain exceptions to the rule of including income of those living in the household. If you have a spouse while you choose to live apart, and you are not legally separated or divorced, you must include them on your application. Then on the opposite end, if you are legally separated, a victim of domestic violence, or divorced, you are not required to include their income on your application for Obamacare.
What is not counted as income for Obamacare?
Here are some of the items that are not counted towards your income for Health Insurance in Texas.
- Loans (bank, home equity, or student)
- Child Tax Credit checks
- Veterans Disability payments
- Workers’ Compensation
- Child support
- Supplemental Security Income (remember this is different than SSDI – Social Security Disability Income)
Can Those with Social Security have Obamacare in Texas?
With all of the above situations counted as income, can you have a steady income stream from Social Security and still qualify for an Obamacare policy? And if so, is there a threshold the Affordable Care Act places on policies as they do on those with regular incomes?
The answer is yes. Social Security is regarded as income on your federal tax return therefore it is included in your income estimate for Obamacare. Whatever income you are receiving, you would count it the same as if you were collecting a paycheck from an employer. Social Security will also affect your ability to collect Premium Tax Credits, even if you do not make enough to meet the threshold to pay federal taxes.
It is also important to note that Social Security itself will not prevent you from obtaining health insurance through Obamacare. As long as you meet the income requirements, you can apply for and receive health insurance in Texas. More on this in a moment.
How Do I Apply for Health Insurance in Texas if I Have Social Security?
The process is not all that different than when you apply for an Affordable Care Act Marketplace policy.
STEP ONE: Create a Marketplace account.
- Enter your basic information: name, address, and email.
STEP TWO: Gather all your necessary information together.
- Name and DOB
- Info about those in the household, even if not applying.
- Information about where you live.
- Info about those applying for coverage.
- Your tax status; how you file
- Income information – here is where you will see where you enter your Social Security information.
- The best estimate of income
- Current health coverage info
STEP THREE: Submit your application.
- Once you have submitted your application, just as with a standard Obamacare Health Insurance application, it will be considered for approval. Your status as a Social Security recipient will not weigh on the decision for acceptance, only the income you receive.
STEP FOUR: Receive eligibility results.
- Once you have received your approval, you can find the health insurance policy for Austin that best suits your needs. There will not be any restrictions because you are receiving Social Security.
Can I Always have Social Security and Obamacare?
As we opened, Social Security serves many purposes. One of them is for those who are retired. However, there will eventually come a time when a retiree reaches an age where they can receive Medicare. At this point, they will no longer be allowed to stay on Obamacare. And must enroll in Medicare. The age for this transition is sixty-five. If an employee has worked on a job and paid into FICA for forty quarters, they are eligible for free Part A insurance. Otherwise, they will be required to pay a premium. For 2023, the Part A premium is $506 per month.
A Social Security recipient can elect to continue with Obamacare for a few reasons. For example: A recipient can continue with their Affordable Care Act policy if:
- they did not pay into the program and would be required to pay the Part A premium out of pocket,
- they have End Stage Renal Disease, and they’ve been on a Marketplace plan already,
- they are already collecting Social Security benefits before becoming eligible for Medicare.
As you can see, those who reach the age of sixty-five and collect Social Security will have the option to continue with their Marketplace plan under some conditions, while others will be required to switch to Medicare. When you switch to Medicare, your income will play a role in how much you will pay for your Part B coverage. Your Part A will follow the above stipulations.
If you need further assistance understanding income and Obamacare, contact the professionals at Cover Mile. We can help you determine how your social security benefits will impact your health insurance premium in Texas. Our licensed insurance agents are ready to assist you! Call us today.