The federal American Rescue Plan Act (ARP) includes financial assistance to stimulate the economy and assist those struggling during the economic downturn resulting from the COVID-19 emergency. The two main types of financial assistance for individuals and families are stimulus payments and child tax credits. Below is a summary of whether and how each impacts eligibility for Medicaid, CHIP, and subsidized Marketplace insurance. Remember, payments must be reported even if the County Assistance Office (CAO) or Marketplace will ultimately disregard them when calculating income and resources.
Economic Stimulus Payments
What are they?
Economic stimulus payments are one-time payments of $1,400 for people whose income is no higher than a certain threshold. This threshold is $75,000 for a single person, $112,500 for a head of household, or $150,000 for a married couple filing jointly. People with children can also get an additional payment per dependent child. You must have a Social Security number to be eligible.
Do economic stimulus payments count as income for Medicaid, CHIP or Marketplace insurance?
No. Economic stimulus payments are not counted in determining income eligibility for Medicaid, CHIP, or subsidized Marketplace insurance.
Do economic stimulus payments count as a resource for Medicaid?
Economic stimulus payments do not count as a resource in determining Medicaid eligibility for the first 12 months after the payments are received. However, if a person still has their stimulus money after 12 months, it will count as a resource for those Medicaid categories that have resource limits.
Child Tax Credit
What is the child tax credit?
For those with children, the American Rescue Plan increased the Child Tax Credit from $2,000 per child to $3,000 per child for children over the age of six and $3,600 for children under the age of six – and raised the age limit from 16 to 17. The law provides that these tax refunds should start to be paid out by the Internal Revenue Service beginning in July. Because they are processed though the IRS, people who do not usually file taxes, such as parents with little or no earned income will have to file a tax return to receive this credit and should do so before the filing deadline of May 17, 2021.
Does the tax credit count as a resource for Medicaid?
No. The child tax credit is not taxable and does not count toward Medicaid eligibility.
The American Rescue Plan will make it cheaper to buy insurance through COBRA. Under
ARP, the government pays the entire COBRA premium from April 1, 2021 through September 30, 2021. A person who qualified for new, employer-based health insurance someplace else before September 30 would lose eligibility for the no-cost coverage. A person who left a job voluntarily would not be eligible.
The IRS has information on the latest round of economic stimulus, as well as a “Get My Payment” link here.
Individuals who need help to file a tax return can find a local Volunteer Income Tax Assistance (VITA) site through the United Way 211 portal here.