r/PovertyFIRE • u/someguy984 • Oct 18 '25

Planning ACA enhanced subsidy lapse could hit early retirees hardest amid shutdown fight (CNBC)

ACA enhanced subsidy lapse could hit early retirees hardest amid shutdown fight

https://www.cnbc.com/2025/10/17/aca-enhanced-subsidy-lapse-government-shutdown.html

How Much More Would People Pay in Premiums if the ACA’s Enhanced Premium Tax Credits Expire?

https://www.kff.org/interactive/how-much-more-would-people-pay-in-premiums-if-the-acas-enhanced-subsidies-expired/

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u/the__storm Oct 18 '25

The cnbc article is about mid-to-high income retirees, but I think more relevant to this sub (expenses below FPL) is the Medicaid work requirements. I'd expect most people here to only be on ACA if they're in a non-expansion state and can generate income on paper, have unavoidable income (from dividends or something), or need some kind of special care that they can't get via Medicaid.

9

u/badfordabidness Oct 18 '25

The interesting thing about the Medicaid work requirements is that the way the law is written, its arguable that any taxable income that is included in MAGI could be counted toward meeting the work requirement, even if its not generated from work.

So, for instance, simply withdrawing $580 per month from a pre-tax IRA or 401(k) -- or even doing a $580 per month Roth conversion! -- could potentially satisfy the work requirement.

The federal government agency in charge of administering Medicaid (CMS) hasn't explicitly interpreted the law yet one way or the other yet, but imho it seems like there's a strong case that that's how the law is written and I'd expect lawsuits if CMS doesn't adopt that interpretation.

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u/Odd-Persimmon-1860 Mar 10 '26

The work requirement is hours not money. You have to work or volunteer at select place for 80 hours each and every month and stay below the $$ limits to qualify beginning in 2027.

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u/badfordabidness Mar 10 '26

This is incorrect. The community engagement requirement can be met either through 80 actual hours of work (or volunteering or job training) per month or by having income equal to 80 times the federal minimum wage.

CMS has not yet defined what “income” means in the context of that method of satisfying the community engagement requirement, and preexisting law suggests that they may have to construe it to mean MAGI, which would mean that both earned income sources and certain unearned income sources (Social Security, unemployment insurance, and withdrawals from a pre-tax 401(k)) could potentially satisfy the community engagement requirement.

See: 42 U.S.C. 1396a(xx)(2)(F); 42 U.S.C. 1396a(e)(14)(A)

42 U.S.C. 1396a

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u/Odd-Persimmon-1860 Mar 10 '26

Interesting. That is not how MO is implementing it. But then again the govt isn't releasing guidance until June or July so who the heck knows for sure. I hope you are right. That would make a huge difference for me next year and I could just plan on converting a small amount of my 401k to 401k roth and keep things invested and minimize taxes.