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Why you might want to be part of a "special group of former SSI recipients".

“Former” can signify respect—“Former president”, or “Former Olympic athlete”. Or nostalgia—“Former member of the rock band Journey” or “Former cast member of “Chicago P.D.” Or relief—“Former practitioner of Scientology”. Or simply, confusion—those of us of a certain age remember “The artist formerly known as Prince”. Rarely is the word “former” used to connote something desirable or useful because the word often implies something of the past that’s now gone. The exception to this might be a peculiar Social Security/Medicaid designation: “Special groups of former SSI recipients”. You can read the whole story about these categories here. In this blog, I am going to explain a little bit about the value of this designation as a follow on from my last post.

About 95% of my clients are people with disabilities and their families. When I talk to clients about “benefits”, they do not think 401(k) and employer group health. Instead, they think Social Security, Medicare, and Medicaid. Practically speaking, most clients think of Social Security first. In some ways, this makes sense, because Supplemental Security Income (or “SSI”) is the first benefit that most youth with disabilities obtain. Some can be found eligible while they are still children under the age of 18, but many more become eligible once they turn 18 and are considered low-income adults with barriers with limits on their employability due to their disability. In my last blog, I talked about how many teens and young adults with intellectual, developmental, and even physical disabilities often meet the Social Security definition of having a disability, which requires that one be unable to perform Substantial Gainful Activity” because of one’s long-lasting, medically determinable physical or mental impairment. The benefit of SSI is also readily apparent. The young person can receive up to $841/month, which can be used to pay for activities, therapies, and respite for the family and other expenses. (Photo courtesy of Hadija Saidi via Unsplash.)

The benefit of being eligible for Medicaid is not always as apparent. Most of my client families have other forms of health insurance coverage, and we discuss how their adult child with a disability can remain on the parents’ employer group health plan beyond the age of 26 if s/he is “permanently and totally disabled”. As health insurance, Medicaid is not that desirable. It is not widely accepted due to its low reimbursement rates and may not cover all medication and treatments. However, as their child exits either high school or the subsequent transition program, the parents become aware that support for adults with disabilities in the areas of employment, daily living, and community access are ultimately funded with Medicaid dollars and that their child therefore needs Medicaid to access and receive those services. These services could cost anywhere from a few thousand dollars year for a child, who just needs a little job coaching, to $80,000 to $100,000 year or more for a child, who needs to live in a home with 24-hour support. As a result, maintaining eligibility for Medicaid over the remainder of the child’s lifetime can be tremendously valuable.

And this is where the importance of membership in one of the “special groups of former SSI recipients” becomes so powerful. In order to have this, the adult with a disability must have received Medicaid concurrently with SSI for at least one month prior to circumstances that increased her or his income, so that s/he would otherwise be financially ineligible for either. The basic Medicaid income threshold (or thresholds for states that have multiple Medicaid eligibility categories) is quite low. In my home state of Illinois, it ranges from $1,133 for Medicaid to the Aged, Blind and [sic] Disabled, to $1,563 for Medicaid through the Affordable Care Act expansion. Of course, there is also a program with higher income for workers but for only workers are eligible, and they also need to pay a premium. Many young adults might find themselves exceeding those limits if they work even part-time, particularly in Cook County, where the minimum wage is $13/hour (as of early-2022) and rising. Moreover, many young adults with disabilities become eligible for an auxiliary Social Security benefit, based on their parents’ work record and payable to them once the parents file for Social Security disability or retirement. This benefit, called a Childhood Disability Benefit (CDB) or sometimes a Disabled [sic] Adult Child (DAC) benefit, extends and is increased as a survivor’s benefit when the parent dies. As a result, it would be easy for many adults with disabilities to exceed the Medicaid income limits if they either worked “too much” or became eligible for a parental-based Social Security benefit.

Section 1619(b) of the Social Security regulations addresses the “problem” of too much earned income. Simply put, if an adult with a disability is eligible for both SSI and Medicaid in one month and then becomes ineligible for SSI in the next month due to having too much earned income, s/he remains eligible for Medicaid as a “former SSI recipient”. This is true for income up to $36,327/year in Illinois. The 1619(b) threshold varies for other states with the highest limit being $82,847/year for Alaska and the lowest being $33,353/year for Georgia. Since the limits are based on the average annual Medicaid expenses for each state plus a standard, federal cost of living, it is even possible to negotiate a higher, individualized threshold if one has either very high medical costs or very high support-service needs.

People who have SSI and Medicaid concurrently for one month and then become eligible for a CDB/DAC monthly payment that puts them over the Medicaid income threshold, remain eligible for Medicaid under Section 1634 of the code. Finally, the so-called “Pickle Amendment” protects people with disabilities who formerly received SSI as well as a Social Security Disability Insurance (SSDI) or a CDB/DAC benefit on their own work record or that of a parent and then lost their SSI due to a Cost-of-Living Adjustment (COLA) to the non-SSI benefit.

In all these cases, the former SSI recipient is considered to remain technically eligible for SSI but in “$0-pay” status due to income from these other sources. As a result, the person with a disability must continue to meet the medical or clinical definition of “disabled” and may not have countable resources (Social Security speak for assets) above the SSI/Medicaid threshold, which is $2,000 for an individual and $3,000 for a couple. In 1619(b) cases, they must also demonstrate that they have used their Medicaid in the past 12 months or will use it in the next 12 months, that they would be unable to pay unexpected medical expenses without their Medicaid, and that their higher earned income is insufficient to compensate for the lost Medicaid benefits.

Most of us would probably rather not be identified as a “former” anything. Indeed, it sounds as if the best has already passed. For special groups of former SSI recipients, however, the best is still ahead as their income increases without affecting their Medicaid benefits.

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