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Potential for Medicaid Eligibility after SSDI Payments Begin

  • Retaining a Small SSI Payment Ensures Continued Medicaid in Most States

The amount of SSDI the youth now receives may be low enough to allow for a smaller SSI payment to continue.  In 41 states, the District of Columbia, and the Northern Mariana Islands an SSI recipient is automatically eligible for Medicaid.  In most of those states, there is no need for a separate Medicaid application.  In eight states (Alaska, Idaho, Kansas, Nebraska, Nevada, Oklahoma, Oregon, and Utah) and the Northern Mariana Islands a separate Medicaid application is required and then SSI payment status is enough to establish Medicaid eligibility.

Medicaid in the Section 209(b) States:  Medicaid is not automatic for SSI recipients in these nine states.  It is determined using state-specific eligibility criteria.  These states include:  Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North Dakota, Oklahoma, and Virginia.  VR counselors should become familiar with state specific eligibility criteria for youth if they are in one of these states.

  • Other Potential Medicaid Options

If the youth does not retain SSI after SSDI payments begin, retains SSI but lives in a 209(b) state, or initially retains SSI but then loses it due to work and budgeted wages, the youth may qualify for Medicaid through another pathway to eligibility.

The optional “medically needy” spend-down or share-of-cost program exists in two thirds of the states.  It is for individuals with high medical costs and too much income to qualify for Medicaid through SSI status or through another pathway available in their state.  In 209(b) states, this program is mandatory and individuals who are blind or disabled must be given the opportunity to spend down to the medically needy level.  States set their own income and resource eligibility thresholds.  At state option, the state can use a period of one to six months for determining an individual’s spend-down.

Example:  KP gets monthly SSDI of $920 which is too much to qualify for SSI.  After excluding $20 of KP’s income under state rules, she is still $100 above her state’s medically needy eligibility threshold and she will face a $100 per month spend down.  KP can establish Medicaid eligibility after paying for or incurring at least $100 in qualified medical bills.  Some states may also allow her to pay $100 each month to the Medicaid agency to meet her spend down.

The 1619(b) work incentive is available in every state and allows former SSI recipients to retain Medicaid if: they lost SSI through countable earned income; they have annual earnings below their state’s unique eligibility threshold; and other eligibility criteria are met. See our Print and Go Tip Sheet, The Section 1619(b) Work Incentive:  Keeping Medicaid after SSI Payments End through Work and Wages.

The optional Medicaid Buy-In for working individuals.  More than 40 states have established a Medicaid Buy-In program.  It will be known by different names in different states.  See our Print and Go Tip Sheet, The Optional Medicaid Buy-In (MBI) for Working Individuals Program.

Social Security Childhood Disability Benefit (CDB) recipient, who lose SSI upon eligibility for CDB or when their CDB payment increases, may be eligible for continued Medicaid if he or she would still be eligible for SSI if the CDB payment or the recent increase is excluded from countable income.  This provision, section 1634(c) of the Social Security Act, always applies to exclude the CDB or the CDB increase in the 41 states where Medicaid is automatic for SSI recipients.  In the nine 209(b) states (see above), the state may or may not follow SSI rules, including this rule, to determine countable income.  VR counselors who reside in a 209(b) state should check with their Medicaid agency to determine if this special rule applies in their state.

Medicaid Waivers:  Every state has one or more of the optional Home and Community Based Services (HCBS) waivers which have been approved by the federal Centers for Medicare and Medicaid Services.  HCBS waivers often target a particular disability group, such as individuals with traumatic brain injuries or those with intellectual disabilities.  Often an HCBS waiver program will waive financial eligibility rules, e.g., establishing is higher income eligibility threshold than that used in the regular Medicaid program; or ignoring parental income and resources for a minor child even though regular Medicaid rules would count that income and resources.  When eligible for a waiver, a youth may get a range of services not available through the regular State Medicaid program, potentially including things like job coaching services, home modifications, or vehicle modifications.  VR counselors can check with their State Medicaid Program to see what HCBS waivers (or other waivers) the state offers.

The Section 1619(b) Work Incentive: Keeping Medicaid after SSI Payments End through Work and Wages

If a beneficiary works and SSI payments stop as a result of countable wages, 1619(b) eligibility can be established to continue Medicaid indefinitely if the individual has annual earnings below a unique state eligibility threshold and other criteria are established.

A simple example:  Raj gets SSI of $771 per month, with no State Supplement.  He lives in one of 41 states in which Medicaid is automatic for SSI recipients.  He takes a job earning $1,685 gross per month and will no longer be eligible for SSI payments because his monthly countable income after all exclusions, $800 ($1,685 – 20 – 65 = $1,600/2 = $800), is more than the maximum SSI rate.  His projected $20,020 annual income will be below the 1619(b) eligibility thresholds for every state and he will be eligible for continued Medicaid so long as he meets all other 1619(b) criteria.

Meeting all the 1619(b) Eligibility Criteria (in the 41 states in which Medicaid is automatic for SSI recipients) 

If the beneficiary lost their monthly SSI payment, through work and countable wages, he or she can keep Medicaid if the beneficiary: 

  • Still meets SSI’s criteria for disability or blindness;  

  • Was eligible for an SSI payment (or 1619(b) Medicaid) at least one month out of the last 12 months; 

  • Has unearned income and resources within SSI limits (i.e., would be eligible for an SSI payment if wages are ignored); 

  • Meets an “expected to use Medicaid” test; and 

  • Has projected annual income from wages below the unique 1619(b) eligibility threshold for the state (or below an individualized threshold). 

Meeting 1619(b)’s Expected to Use Medicaid Test 

An individual meets this test if he or she: 

  • Used Medicaid in the last 12 month; or 

  • Expects to use Medicaid in the next 12 months; or  

  • Could not pay unexpected medical bills in the next 12 months without Medicaid. 

Those who seek 1619(b) or continued eligibility for 1619(b) will be asked if they meet one of these three tests.  The great majority will meet one or both of the first two tests.  Even if they do not, nearly everyone should be able to say “yes” to the third test.

Eligibility for 1619(b) in the Nine 209(b) States 

In these states (Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North Dakota, Oklahoma, and Virginia) Medicaid is not automatic for SSI recipients.  Rather, it is determined under state-specific eligibility criteria.  To be 1619(b) eligible in one of these states the individual must: 

  • Have been eligible for Medicaid in the month immediately prior to becoming eligible for 1619(b); and  

  • Meet all other 1619(b) eligibility criteria as listed above. 

Establishing a Higher, “Individualized” Eligibility Threshold for 1619(b) 

If gross annual earnings are higher than the state’s 1619(b) threshold, eligibility may be established by adding up: 

  • A base amount taken from Social Security’s threshold chart; 

  • The state Medicaid amount from the chart (a state annual average of Medicaid expenditures per recipient), or annual Medicaid-funded expenses if higher; 

  • Impairment related work expenses and/or blind work expenses; 

  • Money set aside in an approved Plan to Achieve Self Support (only relevant in the nine 209(b) states, since PASS results in SSI and Medicaid eligibility in other 41 states); and 

  • Publicly funded attendant care that would be lost due to the individual’s earnings. 

In most cases, eligibility is established by virtue of very high Medicaid payment costs.

Individualized Threshold Example:  Gene has cerebral palsy, is a full-time wheelchair user, and gets SSI of $771 per month with automatic Medicaid in his state.  He will soon graduate from college and take a job earning $42,000 per year.  This earned income exceeds his state’s $37,020 section 1619(b) threshold (made up of $19,020 base amount and $18,000 Medicaid amount).  Gene verifies that Medicaid paid for $32,000 in medical expenses during the past year (personal care services cost more than $25,000) and expects a similar or higher amount of medical expenses in the upcoming year.

Gene has established a $51,020 individualized 1619(b) threshold: 

  • By adding the $32,000 of actual Medicaid expenses to the $19,020 base amount. 

  • Since his annual earnings, expected to be $42,000, will be below that figure he will be eligible for 1619(b) Medicaid. 

The Optional Medicaid Buy-In (MBI) for Working Individuals Program

This federally authorized program exists in more than 40 states.   

  • It can provide Medicaid to working people with disabilities who are not eligible for 1619(b) Medicaid. 

  • A few states created MBI programs authorized though 1997 legislation.  The majority of MBI programs have been enacted under the authority of Section 201 of the 1999 Ticket to Work and Work Incentives Improvement Act.   

  • Since most SSI recipients who work for substantial wages and lose an SSI payment are protected by 1619(b), the MBI programs often provide a work incentive to individuals who receive Social Security Disability benefits (or another form of income), with no SSI. 

This program is known by different names in different states.   

  • Sometimes the words Medicaid Buy-In are in the state program’s name; sometimes the name does not reference it being a Buy-In program.  

  • The federal design of the program assumes that states will charge monthly premiums to obtain Medicaid coverage

We will focus on key components of MBI programs created through the 1999 Ticket to Work legislation:  

  • States can establish their own income and resource limits for the program. 

  • Individuals must have earned income. 

  • Individuals must meet the medical criteria to establish disability in the SSI program, but earnings above a substantial gainful activity level are not relevant to eligibility. 

VR counselors should check with their state Medicaid agency to see if there is an MBI program operating in their state.  If so, the Medicaid agency should be able to direct them to a website for information about how that program operates and eligibility criteria. 

  • States use the SSI rules for determining countable income and resources. 

  • States can charge premiums to participate in the program, with premium amounts established on a sliding scale. 

  • MBI enrollees must be at least 18 and less than age 65 (no age limits if prog

    • ram authorized by 1997 legislation) 

    Countable income and resource limits for MBI program vary from state to state. 

    • The majority of states have established monthly countable income limits at 250 percent of the federal poverty level ($2,530 per month in 2018). 

    • Several programs have established much higher income limits. 

    • Some programs have no income limits.  

    Medicaid Buy-In Example:  JP receives monthly Social Security disability payments of $950 and no SSI.  Prior to starting work he received Medicaid with a spend-down of $200 per month.  JP starts a job earning $1,500 per month ($18,000) per year.

    JP will be eligible for his state’s Medicaid Buy-In program: 

    • His total countable income will be$1,647.50, i.e., $930 from Social Security ($950 – 20) and $717.50 from earnings ($1,500 – 65 = 1,435/2 = $717.50). 

    • With his total monthly countable income of $1,647.50 less than the $2,530 monthly limit for the MBI program in his state, he will be eligible for the program if his resources are within the program limits. 

    VR counselors should check with their state Medicaid agency to see if there is an  MBI program operating in their state.  If so, the Medicaid agency should be able to direct them to a website for information about how that program operates and eligibility criteria.