What is the method used to determine financial eligibility for Medicaid, CHIP, and Marketplace cost sharing?

The method used to determine financial eligibility for Medicaid, CHIP, and Marketplace cost sharing is known as Modified Adjusted Gross Income, or MAGI. This approach is significant because it provides a standardized metric for assessing income, which takes into consideration certain tax-exempt income and deductions beyond just the standard Adjusted Gross Income (AGI).

MAGI is specifically designed to facilitate the evaluation process for various assistance programs, thereby ensuring that individuals and families receive appropriate support based on their financial situation. This method simplifies the eligibility determination process by creating clear criteria that are uniformly applied across different programs.

For example, while AGI assesses income from various sources, MAGI includes adjustments for non-taxable Social Security benefits, some types of interest income, and foreign earned income, making it a more comprehensive and informed measure of an individual’s financial capability. This distinction is crucial for accurate eligibility assessment in programs aimed at assisting low-income individuals and families with healthcare coverage.