Between retirement and Medicare at 65, health coverage is often the largest tax-adjacent lever in the plan, so the projection models it explicitly.
Marketplace plans
You enter the full premium and your subsidy (advance premium tax credit). Each simulated year the engine checks your income (MAGI, which includes Roth conversions and taxable yield):
- Income at or under the limit → you pay the net premium (full − subsidy).
- Income over the limit → the subsidy is lost for that whole year and you pay the full premium.
That cliff is why the conversion planner treats the ACA limit as a ceiling: one extra converted dollar can cost thousands in lost subsidy. The advanced Roth top-up exploits the flip side. In a year the subsidy is already lost, it can convert extra (demand-sized, to cover the years ahead), so later years stay under the limit.
Employer / COBRA
A flat premium has no subsidy or cliff. It is simply an expense line until 65.
At 65
Coverage switches to Medicare, and premiums follow the IRMAA tiers from MAGI with the real two-year lookback. Income at 63 already sets your first Medicare premium. Premiums are charged per person, so a spouse who is also 65+ pays their own; whose 65th birthday counts comes from the birth dates in your Profile, the same clock the marketplace transition below uses. A spouse has to be on file there before their Medicare can be modelled at all.
Each person switches on their own birth month. A couple's stated premium is split evenly between them, and each half stops when that person turns 65. During the years when only one of you is still on a marketplace plan, the plan carries a half share rather than all of it or none of it. The even split is a simplification: a real family premium is the age-rated sum of its members'. The income cliff below is not split. Eligibility is tested on the whole household's MAGI, which is how the ACA actually works.
The two income counts are not the same number. The ACA cliff counts your whole Social Security benefit; IRMAA counts only the taxable part of it. So a benefit-heavy year can clear an IRMAA tier it would have breached under the ACA measure. See the tax model.
The year-by-year detail marks each year's ACA outcome: subsidy kept (you paid net) or lost (full premium, the difference added to spending).