MAGI, modified adjusted gross income, is the income figure most health programs measure: your tax return’s adjusted gross income, with a few untaxed items added back. Those are tax-exempt interest, untaxed foreign income and the non-taxable part of Social Security benefits. It is not take-home pay and not gross wages. Medicaid for working-age adults, the Essential Plan and the marketplace measure eligibility with it; Medicare uses it to adjust some premiums.

Because it starts from adjusted gross income, anything that lowers that line lowers MAGI. Pre-tax retirement contributions, health savings account contributions and deductible self-employment expenses all do, and that is the legitimate way a household lands under a threshold it appeared to be over. What counts: wages, self-employment income, unemployment benefits, taxable retirement income, rental and investment income, and the untaxed Social Security portion. What does not: SNAP, most child support, Supplemental Security Income, workers’ compensation, veterans’ disability benefits, gifts and inheritances. Whose income: your tax household, meaning you, a spouse you file with and the dependents you claim. Never a roommate.

The part people get wrong is the year, because programs read different ones. The marketplace credit uses MAGI projected for the coverage year, not last year’s return if this year looks different. It is paid on that estimate and settled on your tax return, with no cap on repayment since the 2026 tax year. Medicare looks backward. It does not use MAGI to decide who is covered, since eligibility runs on age and disability. But Social Security sets the income-related monthly adjustment amount, IRMAA, on Part B and Part D premiums from the MAGI on your federal return from two years earlier: premiums for 2027 look at the 2025 tax year. If your income dropped because of a life-changing event such as retirement or a spouse’s death, you can ask Social Security to use more recent income.

You meet MAGI as questions more often than as a word: the income section of the NY State of Health application, which asks what you expect to earn this year, and the eligibility letter that places you in a program. After a year of advance credits, your federal return recalculates the credit on actual income. On Medicare, it appears as an income-related adjustment on the Part B or Part D premium. Wherever you see it, check which year’s income was used.

In New York: MAGI decides Medicaid for working-age adults (about 138% of the poverty level), the Essential Plan (200%), Child Health Plus premium tiers (free to 222%, premiums to 400%) and the marketplace credit (generally to 400% for 2027 plans). People 65 and over and people applying on the basis of a disability are the exception: their Medicaid is budgeted under separate non-MAGI rules. Those rules compare countable monthly income with the Medicaid income level for the household size, apply an asset test the working-age categories do not have, draw the household differently, and generally take the application at the local department of social services, which in New York City is the Human Resources Administration, rather than at NY State of Health. Income over that level does not automatically mean no Medicaid: the difference becomes a monthly spend-down. On the MAGI side there is no asset test and no spend-down, and above the line the answer is the Essential Plan or a marketplace plan. The hospital financial assistance law uses neither method: it counts gross household income, without the MAGI adjustments.

  • Estimate from income before taxes, minus pre-tax retirement and HSA contributions, not from take-home pay, and project the whole year. If income is unpredictable, estimate high: overestimating only delays money you get back. How the credit is reconciled.
  • Report a change within 30 days once you are enrolled through NY State of Health, so the credit is recalculated forward instead of at filing.
  • If you are 65 or over or applying on disability, expect asset questions and a different door. If a notice sets a spend-down, ask in writing how it was calculated. How spend-down works.
  • On Medicare, after retirement or a spouse’s death, ask Social Security to use your more recent income.

Also called: modified adjusted gross income. Full guide: 2026 income limits and what counts as income. Reference: MAGI (modified adjusted gross income) on Wikipedia — general definition, not New York specifics.

More in Glossary of health coverage and billing terms

  • Out-of-pocket maximum — The out-of-pocket maximum caps your cost sharing for covered in-network care each plan year. What counts toward it, what never does, and the New York rules.
  • Network (in-network and out-of-network) — The set of doctors and hospitals your plan has contracted with. Outside it, you pay much more.
  • Formulary — A formulary is a plan's list of covered drugs, sorted into tiers that set your cost. What on-formulary means, how exceptions work, and New York's NYRx list.
  • Premium — What you pay monthly to have coverage, separate from what you pay when you use it.
  • Navigator — A certified, free helper who walks you through enrollment and earns no commission on your choice.
  • Tax household — The group whose income is counted together for coverage eligibility, decided by who files a tax return with whom rather than by who lives in the apartment.
  • Medicare in New York: What the Fall Season Actually Decides — Medicare's annual enrollment runs October 15 to December 7, 2026. What you can change in that window, what it does not touch, and how dual eligibility works.

This page explains how the system works. It is not medical advice. More.