ACA when one spouse goes on Medicare

Financial Planning Tax Strategies
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OK. So, clearly there is a lot of uncertainty right now. But, as it stands, if things don’t change too much, we’re going to hit a “situation”.

In about 2.5 years I will have to go on Medicare. I believe I have to apply the year I turn 65, so let’s just say January of 2028. 1poorlady is 4 years from Medicare, and will have to apply in the year she turns 65, so January of 2029.

Two things are going to happen, as far as I can see. I will need ACA for the first several months of 2028, and after that no more. 1poorlady will need if for the entirety of 2028, and most -but not all- of 2029. Is it safe to assume that our application for 2028 will be similar to the application for 2027 (neither of us on Medicare), and that coverage will simply be dropped after I turn 65? Or will we need to do a special circumstance application for 1poorlady to continue on the ACA (with our COMBINED income falling on her)? We are MFJ on our tax returns.

The next year, is there any way to not have the entirety of our income fall onto her for a single ACA application? Maybe change our filing status to “married filing separately”? Otherwise, even with the present system, she will get little to no tax credit for her health insurance.

While it would simplify this particular situation, I have no intention of divorcing her so my investment income would be separated from hers. I know back in the days of the marriage penalty that some people did that (or just never got married).

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MFS is a disqualifier for ACA subsidies. Divorce/separation is the only way around this issue.

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Yeah, well…I’m not letting her get away. She might figure out she could get someone better.

Thanks for the info.

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You need to check with your state to see how they want you to handle it. It is possible to continue on ACA after you are 65. You just don’t get any subsidies. Because of that, Medicare is likely a whole lot cheaper, so you will need to cancel your ACA when you change to Medicare. How your state wants that cancellation to happen is up to them.

Not unless you get a divorce, so she’s no longer legally married to you by Dec 31 for that tax year. When you file MFJ, the entire joint income counts for anyone on ACA.

MFS status is not eligible for ACA subsidies at any income - probably precisely to avoid the ‘work-around’ that you are suggesting.

Yeah, that’s probably the case.

Then she will probably end up paying the full premium amount for the time she is on ACA and you are on Medicare.

AJ

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