How exactly is Modified Adjusted Gross Income (MAGI) calculated for Healthy Michigan Plan eligibility in 2026?
Executive summary
The Healthy Michigan Plan (HMP) uses the federal Modified Adjusted Gross Income (MAGI) methodology to decide whether adults ages 19–64 meet the program’s income limits, meaning eligibility is based on a tax-rooted income figure rather than asset tests or other state-only calculations [1] [2]. Practically, MAGI is calculated by starting with a household’s federal Adjusted Gross Income (AGI) and adding back specific untaxed items—most notably untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest—while Michigan administers enrollment through MDHHS tools like MI Bridges and counseling systems like MI Options for disputes [3] [4] [5].
1. What MAGI is, in plain terms, and why Michigan uses it
MAGI is the income definition mandated by the Affordable Care Act for Medicaid expansion and Marketplace subsidies: it begins with the AGI on a federal tax return and then adds certain types of untaxed income such as untaxed foreign earned income, non-taxable Social Security benefits, and tax-exempt interest—this combined figure determines income eligibility for programs including HMP under the MAGI methodology [3] [6]. Michigan explicitly states that Healthy Michigan eligibility is determined using MAGI rules, so the state relies on that federal formula rather than older, asset-focused Medicaid counting rules for most adults in the expansion group [1] [2].
2. The step-by-step arithmetic the state will use for 2026 applicants
The operational steps are straightforward on paper: start with the applicant’s Adjusted Gross Income (AGI) from the federal tax return, then add any untaxed foreign income, any non-taxable Social Security benefits, and any tax-exempt interest to arrive at MAGI—this is the income number compared to the program limit [3]. Michigan’s Healthy Michigan Plan identifies eligibility by comparing that MAGI amount to the applicable Federal Poverty Level percentage (MDHHS cites the MAGI methodology in its eligibility rules), and applicants typically provide income evidence through state portals or tax documentation during application and renewal [2] [1].
3. What income is and isn’t counted, and common pitfalls
Federal MAGI rules explicitly exclude some items that older Medicaid rules might consider differently; for example, Supplemental Security Income (SSI) and certain retirement account contributions are not counted as MAGI income in the MAGI framework, which can materially affect eligibility for people receiving mixed benefits [7]. Applicants who don’t file taxes or whose current-year earnings differ from last year must provide projected monthly or annual income for the application period, but unlike Marketplace premium tax credits, Medicaid eligibility is determined at application and is not reconciled later if actual MAGI differs from the projection [4].
4. Thresholds, state variations, and the ambiguity in public reporting
MDHHS states the Healthy Michigan Plan covers adults with income at or below a MAGI-based percentage of the Federal Poverty Level—Michigan’s official pages reference 133% of the federal poverty level for HMP eligibility under MAGI—while other public-facing guides sometimes cite 138% or list specific dollar amounts for past years, reflecting shifting federal/state policy language and the public confusion around expansion thresholds and state adjustments [2] [8]. Sources differ on the exact percentage cited publicly, so applicants should rely on MDHHS’s current published limits and the MI Bridges application for the authoritative threshold rather than third‑party summaries [2] [1].
5. Practical next steps and limits of the reporting
For anyone subject to verification or dispute, Michigan’s MDHHS and MI Options counseling services can explain how the state applied MAGI to a household’s particular mix of income, and MDHHS’s online eligibility pages and benefit plan materials reiterate the MAGI methodology as the basis for HMP decisions [5] [9]. Reporting reviewed here establishes the federal MAGI formula and Michigan’s reliance on it but does not provide exhaustive examples for every unusual income stream or the state’s internal treatment of household composition rules; those finer procedural details are governed by CMS guidance and MDHHS intake policies not fully detailed in the sources available [3] [4].