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

If an SSI beneficiary works and SSI payments stop as a result of work and 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 receives SSI of $771 per month, with no state supplement.  He resides 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 otherwise available.  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 SSI 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
  • Would be unable to pay unexpected medical bills in the next 12 months without Medicaid.

Individuals seeking 1619(b) for the first time or continued eligibility for 1619(b) will be asked if they meet one of these three criteria or tests.  The great majority will meet one or both of the first two tests.  Even if they do not meet the first two tests, 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 threshold 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 the great majority of 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 an SSI payment of $771 per month with automatic Medicaid in his state.  Gene will soon graduate from college and take a job earning $42,000 per year.  This will be too much earned income to qualify for 1619(b) as it 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 (with personal care services costing 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.
  • 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 program 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).
  • 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 $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.