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In 2016, my daughter now 9 and I are on Medi-cal health

insurance. At that time...
In 2016, my daughter now 9 and I are on Medi-cal health insurance. At that time, I wasn't working and we lived in our house. In 2017, I profited about $150,000 from my house sale and we continued to have Medical-cal coverage not knowing anything if I need to report that change or not. In my situation, does our Medi-cal eligibility changes with the $150,000 in my bank account. I read that I can't have anything over $3,000 in assets, including checking or savings account?
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Customer reply replied 1 month ago
Currently, i am not working.
Answered in 1 day by:
3/10/2018
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 944
Experience: Former IRS Revenue Agent
Verified

I'm Fiona, former IRS revenue agent. I am looking at your question and will get back to you soon. Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP,IMTA

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Dear Customer,

Under Obama care, medicaid type of health insurance, such as Medi-Cal became a way to provide insurance plan and not only a low income health insurance plan. The Obama care is based on taxable income reported on personal tax return Form 1040. That is taxable income. Non taxable income is not counted. See website link on California income level criteria below. It is on "earnings", earned income.

Technically speaking, if a millionaire without any income, the person will qualify for medicaid under the "required" insurance law. The federal health insurance exchange market which referring taxpayers to medicaid types of program never asks how much savings the taxpayer has in the bank or any non-taxable income the person will have because the final consolidation is done by the income tax return which only has taxable income. And that was the law.

Therefore, a person with earning and/or taxable income above the state poverty line may not qualify for Obama care but that millionaire without any income will.

Seldom anyone discusses about this aspect of the Obama care.

In your situation, you qualified for 2016 Obamacare. The house sale if there is no Form 1099 issued to you, you don't have to report it on your Form 1040 because you qualify for homeowner exclusion exemption provided that you lived there two years out of the final five years before the house was sold. You have no taxable income.

This is the law. Whoever designed the Obama care never thought about it? or it is just no one wants us to think about or discuss about it.

As to your question, you were on Medi-Cal legally fine in 2016. Don't advertise it. Don't just go around to mention it to others.

http://www.dhcs.ca.gov/services/medi-cal/Pages/DoYouQualifyForMedi-Cal.aspx

Please feel free to follow up.

Regards,

Fiona

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Customer reply replied 1 month ago
Hi Fiona,If I understand you correctly, Medi-cal eligibility only looks at the taxable income Form 1040 and not at how much assets I currently have. For yearly renewal, do they check my tax return yearly?What you mentioned here and the other places that I went to contradict a bit. To qualify for Medi-cal, several criteria need to be met: income of about $1,188/month for an individual which I am since I am divorced and second criteria is individuals may own assets not worth more than $2,000. I have been told that with my daughter and I, the maximum we can have in our checking out is about $6,000. If that's the case then we don't qualify for Medi-cal the moment we sold the house, in 2016.

Dear Customer,

Your procedure stated is applying for Medi-Cal as low income family. If you go through federal exchange market, no assets level is asked.

Please review the website I provided the link in the last posting.

The website says clearly one can qualify by the earning criterion or one can also qualify by the low income criterion.

It is California State's official website.

If you look at your 2016 tax return, on the premium tax credit section, did you have to return any money to the government? That is how the tax reporting is done. That tax form has no question on wealth at all. So, the federal exchange market does not have to check the past tax returns. The reconciliation procedure is done on the tax return.

The California State's website is official source. You can choose to disagree with it, as well. If you insist to pay back government all the Medi-Cal cost, interest, and penalty, you can feel free to go ahead. From a low income criterion, yes, you did not qualify. From the mandated insurance policy and tax law's viewpoint, you qualified.

I don't know how to explain more than I have explained. If you don't trust the California official website, I also don't know how to elaborate more.

Regards,

Fiona

Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 944
Experience: Former IRS Revenue Agent
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Dr. Fiona Chen
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Category: Tax
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