What does MAGI stand for and how is it used in marketplace determinations?

• A. Modified Adjusted Gross Income; used to determine eligibility for premium subsidies, CSR, and Medicaid/CHIP
• B. Maximum Adjusted Gross Income; used to determine eligibility for Medicaid only
• C. Medical Adjusted Gross Income; used to determine eligibility for all insurance plans
• D. Median Adjusted Gross Income; used to set premium rates

Answer: (A)

MAGI stands for Modified Adjusted Gross Income. In the Marketplace, MAGI is the income measure used to determine eligibility for financial help and certain health programs. It starts with your tax return’s Adjusted Gross Income and adds back specific tax-exempt amounts (such as non-taxable Social Security benefits and tax-exempt interest) to compute MAGI. The Marketplace then uses MAGI relative to the federal poverty level to decide what you may qualify for: premium subsidies (premium tax credits) to lower monthly premiums, cost-sharing reductions to reduce out-of-pocket costs, and Medicaid/CHIP eligibility in states that use MAGI-based rules. MAGI affects eligibility, not thepremium rates themselves, which are set by insurers; subsidies tied to MAGI influence what you pay overall.