In this short series of posts, I am talking about Medicaid eligibility for people with disabilities. Most states, including my home state of Illinois, have multiple eligibility categories into which a person with a disability might fit and each has its own rules, even though Medicaid is Medicaid, and you get the same coverage and access to Medicaid Waivers regardless of how you meet your eligibility criteria. But getting coverage and keeping coverage are two different things. Last post, I gave an overview of the eligibility category that arose in Illinois and in a number of other states from the expansion of Medicaid under the Affordable Care Act (ACA). That legislation opened Medicaid eligibility to a new category: low-income adult. Full stop. No disability required. Unlike many other categories of Medicaid eligibility, the ACA category does not require limited assets—or what government programs refer to as “countable resources.” The thinking there was that people with limited income probably spent most of it on daily expenses and were unlikely to have many assets. The only requirement to meet ACA eligibility was to have income (earned and unearned) below 138% of the Federal Poverty Level indicated for the size of one’s tax household.
(photo by Sigmund on Unsplash)

Since the sole criteria for having Medicaid under the ACA is low income and disability does not factor in, if the income of the person with a disability goes up for any reason, s/he may lose ACA Medicaid eligibility. In general, there are two reasons why a person with a disability may see an increase in income.
The person may begin to work or see an increase in employment. The ACA income threshold for a single individual is $1,732. Illinois’ minimum wage is $14/hour, so working 30 hours a week could push a person over that limit. It would only take 25 hours within Chicago city limits, with its higher $16.20/hour minimum wage. So if you are a person with a disability who wants to work full time and/or expects to earn more than minimum wage, you will be priced out of the ACA. Exceeding the ACA income threshold is even more complicated if, like many people with disabilities, you also receive a cash Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) payment. Since you only loose about 50 cents of SSI per dollar earned (from the maximum of $943/month—exact calculation in later another blog), you could earn $1,500/month (less than 22 hours of work/week in Chicago) and you would still receive $235 of SSI, putting you over the limit. If you earned that same $1,500/month but had accumulated enough work credits to receive SSDI on your own work record (more about that in another blog), you might have $500, $700 or more of SSDI and end up well over the ACA limit.
A person whose disability started before the age of 22 might also see an increase in income when her/his parents start drawing a Social Security Retirement Benefit and s/he becomes eligible for a so-called “Childhood Disability Benefit” (“CDB” because the disability started in childhood). This benefit, also referred to as a “Disabled Adult Child” or “DAC” benefit, is up to 50% of the higher-wage-earning parent’s Primary Insurance Amount (PIA) which, in turn, is generally equivalent to the full retirement age benefit. So, if the parent has an FRA benefit of $3,000, their adult child could receive a $1,500 CDB and if s/he had any other income, go over the ACA limit easily. The likelihood is even higher when a parent dies, and the adult child becomes eligible for a survivor’s benefit which is up to 75% of the parent’s PIA.
As a result, it is often more appropriate and beneficial for a person with a disability to have Medicaid eligibility through the “Aid to the Aged, Blind and Disabled” category or “AABD.” This is the eligibility category that is automatically awarded in many states when a person with a disability qualifies for SSI (a Federal program). Even in Illinois, where a separate Medicaid application is required, people with a disability who receive SSI are generally eligible for Medicaid under the AABD category. Assuming they apply for both benefits as soon as they are able, people with disabilities almost always, no matter their state, are eligible for and may be receiving concurrently both SSI and Medicaid.
This is important because the Social Security regulations provide for Medicaid continuation for “Special Groups of Former SSI Recipients.” A person with a disability who formerly received both SSI and Medicaid, but then had her/his SSI cash payment reduced to $0 because of earned income, remains categorically eligible for Medicaid under Section 1619(b) up to annual “countable earned income” as listed in this table. “Countable earned income” uses the SSI calculation in which approximately one-half of the earned income is excluded. A person who received SSI and Medicaid concurrently and then had her/his SSI payment reduced to $0 due to becoming eligible for a CDB/DAC parental-record-based benefit remains eligible for Medicaid under section 1634 regardless of the size of that new benefit.
For both 1619(b) and 1634 Medicaid continuation, recipients must continue to meet the non-earnings components of “having a disability.” That is, they must not have had the kind of medical improvement that is possible with certain kinds of disabling conditions. They must also have countable resources (financial assets) of under $2,000. This latter can be managed by an ABLE account (discussed in blogs past and blogs to come) and may be a worthwhile limitation to accept in exchange for the higher income limits that come with AABD when compared to ACA Medicaid eligibility.
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