The community center coordinator who referred Deborah Lombardi to me described her as “someone who has all the tools and still can’t find the door.” I didn’t fully understand that until I sat down with her at a coffee shop near her Spokane home on a Tuesday afternoon in February 2026, and she spread a manila folder of medical bills across the table like a hand of cards she’d been holding for two years.
Deborah is 33, works as a senior accountant for a regional firm, and runs a small bookkeeping side business she started in 2021. She is married, has a teenager who will start college in the fall of 2027, and by most visible measures, she is doing fine. The folder said otherwise.
How a Routine Emergency Became a $34,000 Problem
In September 2023, Deborah’s husband Marcus underwent an emergency appendectomy at a hospital outside their insurance network. They had been between employer-sponsored plan cycles — Deborah had recently left a salaried position to grow her bookkeeping business — and their marketplace coverage had a $6,800 individual deductible. The hospital bill arrived six weeks later: $28,400 after a partial insurance payment. By the time collections, anesthesiology, and radiology invoices followed, the total reached $34,100.
“I remember sitting at my desk doing someone else’s quarterly taxes and just staring at the number,” Deborah told me. “I’m an accountant. I should know what to do with this. And I had nothing.”
Deborah put $12,000 of the debt onto two credit cards to stop the largest account from going to collections. The remaining $22,000 was placed on a hospital payment plan at zero interest. She did not tell Marcus the full scope of what she had done. “He knew we had bills. He didn’t know I’d maxed the cards,” she said, not making eye contact when she told me this.
The Business She Built Was Quietly Shrinking
The bookkeeping side business that Deborah launched with genuine optimism in 2021 had generated roughly $41,000 in its first full year. By 2024, that number had fallen to $19,200 — a drop she attributed to losing two anchor clients who moved to automated accounting software. Her salaried income remained around $72,000, but the combined household picture was more complicated than it appeared on a W-2.
After deducting legitimate business expenses — software subscriptions, a home office allocation, mileage, professional dues — her net self-employment income for 2024 was closer to $9,800. Combined with Marcus’s part-time freelance design work of approximately $18,000, the household’s MAGI for Medicaid purposes was calculated at just under $100,000. That still put them over the threshold for Washington State’s Apple Health adult coverage.
“I had already done the math in my head and decided I didn’t qualify,” Deborah said. “So I never actually applied. I just assumed.”
What Actually Happens When You Finally Run the Numbers
Deborah first came to the community center in November 2025, initially to ask about financial counseling for small business owners. A navigator there — a federally funded assistance specialist — suggested she look at her Medicaid eligibility more carefully, specifically in the context of her self-employment losses and deductions.
According to Healthcare.gov’s Medicaid enrollment guidance, MAGI for Medicaid purposes excludes certain deductions that aren’t counted under standard tax rules, but it does account for self-employment net income — meaning business losses can legitimately reduce the household figure used for eligibility calculations.
It was not the sweeping Medicaid approval Deborah had half-hoped for. She herself remained over the income threshold for full Medicaid coverage. But the navigator’s review uncovered something she had overlooked entirely: her 16-year-old had been CHIP-eligible for at least two years, and the family had been paying out of pocket to cover him on their private marketplace plan.
The Turning Point — and the Conversation She Had Been Avoiding
Enrolling her son in Washington Apple Health for Children through the state’s online portal took Deborah approximately 40 minutes, according to her account. The coverage was retroactive to the first of the application month. Going forward, she would save $214 per month on premiums — roughly $2,568 per year — that could be redirected toward the credit card balances carrying her medical debt.
The harder part, Deborah told me, was what happened the week after she enrolled her son. She finally told Marcus the full picture — the maxed credit cards, the $22,000 on the hospital payment plan, the months she had been quietly managing a financial fire she had told no one about.
“He wasn’t angry. He was just quiet for a really long time,” she said. “That was almost worse. He said, ‘Why didn’t you just tell me?’ And I didn’t have a good answer for that.”
Where Things Stand — and What Is Still Unresolved
When I spoke with Deborah in late February 2026, the family was three months into a restructured repayment approach. The $12,000 in credit card debt was being paid down at $800 per month, partly funded by the $214 premium savings. The hospital payment plan remained in place. The total debt had not shrunk dramatically — but it had a visible shape for the first time.
Her bookkeeping business was still declining. She had picked up one new client in January 2026 but lost another in February. She told me she was considering winding the business down entirely by the end of the year, which would simplify her tax picture but eliminate a secondary income source as her son’s college costs approached.
The navigator also flagged that if Deborah’s combined household MAGI dropped below approximately $83,000 in 2026 — possible if her side business continues to contract — she and Marcus could become eligible for significant advance premium tax credits on a marketplace plan, potentially reducing their own premiums by several hundred dollars monthly. That threshold, per CMS guidance on ACA provisions, is recalculated annually and applied to prospective coverage periods.
“It’s strange,” Deborah told me as we were wrapping up. “My business getting smaller actually opened doors I didn’t know existed. I’m not happy it’s shrinking. But I spent two years assuming I was on my own with this, and I wasn’t.”
What Deborah’s Story Surfaces for Other Middle-Income Families
Deborah’s case illustrates something the navigator stressed to me in a follow-up conversation: the assumption that Medicaid and CHIP are exclusively for low-income households causes a significant number of working families to skip the application entirely. The income calculation is more nuanced than a gross salary figure suggests, particularly for the self-employed.
- Self-employment net income — after deductions — is what counts toward MAGI, not gross revenue
- Children’s CHIP eligibility extends well above adult Medicaid thresholds in most states
- Marketplace premium tax credits are available at incomes significantly higher than full Medicaid, and many families qualify without knowing it
- Free enrollment navigators are available in all 50 states and can review eligibility at no cost
Deborah is not out of debt. The $31,700 combined balance will take years to clear, and her income picture remains unstable. She told me she plans to sit down with Marcus in April to map out what their finances will look like once their son starts college — a conversation she admits she should have initiated long before I ever sat down across from her with a recorder on the table.
The manila folder of bills was still in her bag when she left. But she had started writing numbers on the front of it. That, she said, was new.
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