MAGI vs. Non-MAGI Medicaid

Medicaid operates under two distinct methodologies for determining eligibility: Modified Adjusted Gross Income (MAGI) and Non-MAGI. These methodologies determine the income criteria and guidelines used to assess an individual's or family's eligibility for Medicaid. 

In this article, we will explore the differences between MAGI and Non-MAGI Medicaid, shedding light on their respective eligibility rules and implications.

Modified Adjusted Gross Income (MAGI) Medicaid

MAGI Medicaid utilizes a simplified income methodology based on the Modified Adjusted Gross Income calculation used for determining eligibility for certain federal subsidies, such as those under the Affordable Care Act (ACA). MAGI methodology focuses on taxable income and specific deductions.

Income Factors:

Under MAGI Medicaid, income factors considered for eligibility determination typically include:

• Taxable income from sources such as wages, self-employment, and investment income.
• Social Security benefits (taxable portion).
• Retirement income.
• Unemployment compensation.
• Certain non-taxable income, such as child support and some forms of veterans' benefits.

Deductions and Adjustments:

MAGI methodology allows for specific deductions and adjustments, including:

• Self-employment tax deductions.
• Certain retirement contributions, such as contributions to Individual Retirement Accounts (IRAs) or 401(k) plans.
• Student loan interest deductions.
• Alimony payments.

Non-MAGI Medicaid

Non-MAGI Medicaid takes into account a broader range of factors beyond adjusted gross income. It typically considers factors such as assets, resources, and medical expenses. 

In many states, Non-MAGI eligibility is granted based on old age, blindness, and disability. 

Non-MAGI Income Factors:

Under Non-MAGI Medicaid, income factors considered for eligibility may include:

• Earned income (wages, salaries, self-employment income).
• Unearned income (interest, dividends, rental income).
• Social Security benefits (including non-taxable portion).
• Pension and retirement income.
• Supplemental Security Income (SSI)

Asset and Resource Tests:

Non-MAGI Medicaid may impose asset and resource tests to assess eligibility. These tests consider the value of assets such as property, vehicles, investments, and bank accounts. Certain assets, such as a primary residence and personal belongings, may be exempt.

Implications and Eligibility

Coverage Options: Both MAGI and Non-MAGI Medicaid provide access to comprehensive healthcare coverage, including doctor visits, hospital care, prescriptions, and other essential services. The specific coverage benefits may vary by state.

Expansion States

Under the ACA, some states expanded Medicaid eligibility to include individuals with incomes up to a certain percentage of the federal poverty level (FPL) based on the MAGI methodology. This expansion has extended coverage to more individuals who may not have qualified under Non-MAGI criteria.

State Variations

It's important to note that eligibility criteria, income thresholds, and coverage options can vary between states, as each state has the flexibility to set its own Medicaid guidelines within federal parameters.

Understanding the differences between MAGI and Non-MAGI Medicaid is crucial for individuals seeking healthcare coverage. While MAGI Medicaid relies on adjusted gross income calculations and specific deductions, Non-MAGI Medicaid considers a broader range of factors such as assets, resources, and medical expenses. 

For help navigating the differences and your eligibility, please contact help@hifortuna.com. 

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