Several roads lead to Medicaid eligibility
Updated: Jul 30, 2021
When they bike, my kids conflate “shortcut” with “alternate route”. I have given up explaining that if you start at the same place, end up at the same place, and then it takes roughly the same time to get there, then neither route can really be considered a shortcut. Really, they just prefer riding their bikes through the alleys and finding new paths that they consider “more fun” and that I cannot as easily see from wherever I’m watching to make sure they are wearing their helmets and looking for traffic. Most of us would be very grateful if we could find a “shortcut” to Medicaid eligibility. While there really isn’t one, there are several alternative routes that may prove more effective and more efficient, depending on the applicant’s specific circumstances, particularly around employment.
Probably the easiest way to qualify for Medicaid is to qualify for Supplemental Security Income (SSI), based on disability. This route to Medicaid eligibility is called “Aid to the Aged, Blind and Disabled” or AABD Medicaid. To qualify for SSI, the applicant must have a medically determinable physical, mental, or behavioral condition that is expected to last more than twelve months or end in death; AND this condition must be significant enough to prevent the applicant from performing Substantial Gainful Activity (SGA). SGA is delineated by monthly earned income of $1,310 or more (gross, for 2021). If you can earn more than that, you can perform SGA and you do NOT have a disability, no matter what your diagnosis; and you will not qualify for SSI. Note that there are some ways to legitimately reduce the amount of earned income that the Social Security Administration counts. I have talked about these in other blogs and will do so again (photo courtesy of Patrick Federi, via Unsplash).
The District of Columbia and the following thirty-three states let Social Security determine Medicaid eligibility, using SSI criteria, and they allow Social Security to enroll SSI recipients in Medicaid: Alabama, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming. A few states make their own separate determination of Medicaid eligibility, but the criteria are the same as those for SSI. These are: Alaska, Idaho, Kansas, Nebraska, Nevada, Oregon, and Utah. Finally, there are the so-called 209(b) states, named after the part of the Social Security regulations that allows states to create their own criteria for Medicaid. These include Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, and Virginia. For example, my home state of Illinois only offers AABD Medicaid to those who have less than $1,073 (100% of the Federal Poverty Level) in total monthly income.
In short, the SSI-linked or AABD route to Medicaid has very limiting income restrictions. In addition, to qualify for SSI and to qualify for AABD Medicaid, the single applicant cannot have more than $2,000 in what are called “countable resources”. All cash and cash equivalents, for example, mutual funds and other investments, are countable resources.
The good news is, there are other routes that have more generous income and asset limitations. The first is expanded Medicaid under the Affordable Care Act or “ACA”. Thirty-eight states and the District of Columbia, as depicted here, have expanded Medicaid. ACA Medicaid eligibility does not require a person to demonstrate disability at all, but only requires that her/his income is less than 138% of the Federal Poverty Level, which would be $1,481/month for 2021. Moreover, ACA Medicaid eligibility does not impose restrictions on countable resources.
People with disabilities, who work or who want to work, may be concerned that in order to support themselves, they will need to earn more than the limits for AABD and ACA Medicaid will allow. Both the Social Security Administration and all the state agencies that administer Medicaid would prefer that recipients work rather than simply stay home and collect benefits. As a result, there are routes to Medicaid eligibility, specifically designed for people with disabilities who work. One is known as “1619(b)”, according to the section of the Social Security regulations that allow it. Section 1619(b) basically says that someone, who qualifies for Medicaid due to qualifying for SSI but then begins to work and earn too much money to be paid any SSI, still retains her/his eligibility for Medicaid. A related regulation, 1634, says that a person, who is eligible for Medicaid based on her/his eligibility for SSI, remains eligible for Medicaid if they lose their SSI due to receiving a higher Social Security benefit on a parent’s work record. This only applies to people, whose disability started before the age of 22 and who continue to meet the Social Security definition of having a disability by the time their parents file for retirement benefits.
Some people with disabilities, who work and earn more than the ACA or AABD thresholds, may be concerned that they never applied for or qualified for SSI and so do not fall in the category that confers ongoing Medicaid eligibility on “Special groups of former SSI recipients”. These people have access to Medicaid through the Medicaid Buy-in programs for workers with disabilities that are available in most states as listed here. The income limits are, for the most part, more generous, generally ranging from $2,000/month to $5,000. A few states have no income limit. While a few states’ Buy-in programs have the same countable resource (asset) limits as AABD Medicaid, most have limits that are more generous and range from $4,000 to $28,000. A few states have no resource/asset limit. In addition, in most states, retirement accounts, such as 401(k)s and IRAs do not count towards the resource/asset limit.
Medicaid eligibility is crucial for many people with disabilities not only because it can provide a form of health insurance coverage, but also because it is the source of funding for most residential, employment, personal care and other support services. There are alternate ways to establish and maintain your Medicaid eligibility. Although there is no actual shortcut to eligibility, we can help you find the way most suited to your specific situation and help you prepare so that the process is as efficient and time effective as possible.