Income Rules

Income Rules A. The Affordable Care Act (ACA) requires that state Medicaid programs use modified adjusted gross income or MAGI-based methodology for determining the income of an individual and the individual’s household. MAGI methodology and rules are required in determining eligibility for Medicaid or Children’s Health Insurance Program (CHIP) or an 1115 demonstration that involve MAGI covered populations of children, pregnant women and parents and needy caretaker relatives. The Aged, Blind and Disabled population is exempt from MAGI rules. B. The MAGI methodology is aligned with the process used to determine eligibility for the premium tax credits and cost sharing reductions available to certain individuals purchasing coverage through the federal health insurance marketplace. The requirement that both Medicaid and the marketplace use MAGI-based income methodologies is designed to promote coordination and avoid gaps in coverage, to the extent possible, for individuals that transfer between different types of insurance affordability programs. C. The use of liberalized income rules under 1902(r)(2) of the Social Security Act is prohibited under MAGI based methodology. This provision is only available to certain ABD covered categories of eligibility.