SSI and Medicaid

What is Medicaid?

Medicaid is a jointly funded, Federal-State health insurance program for low-income and needy people. It covers children, the elderly, the blind, and/or individuals with disabilities, as well as other people who receive federally assisted income maintenance payments.

Thirty-five states and the District of Columbia provide Medicaid eligibility to individuals who are eligible for Supplemental Security Income (SSI) benefits. In these States, the SSI application is also the Medicaid application. Medicaid eligibility starts the same month as SSI eligibility.

The following jurisdictions use the same rules to decide eligibility for Medicaid as SSA uses for SSI, but require the filing of a separate application: Alaska, Idaho, Kansas, Nebraska, Nevada, Oregon, Utah, and the Northern Mariana Islands.

The following States use their own eligibility rules for Medicaid, which differ from SSA's SSI rules. In the following states, a separate application for Medicaid must be filed: Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North Dakota, Oklahoma, and Virginia.

If I am on SSI and go to work, what happens to my Medicaid?

One of the biggest concerns SSI beneficiaries have about going to work is the possibility of losing Medicaid coverage. Section 1619(b) of the Social Security Act provides some protection for these beneficiaries. To qualify for continuing Medicaid coverage, a person must:

Have been eligible for an SSI cash payment for at least 1 month;

Still meet the disability requirement; and

Still meet all other non-disability SSI requirements; and

Need Medicaid benefits to continue to work; and

Have gross earnings that are insufficient to replace SSI, Medicaid, and publicly funded attendant care services.

This means that SSI beneficiaries who have earnings too high for an SSI cash payment may be eligible for Medicaid if they meet the above requirements. SSA uses a threshold amount to measure whether a person’s earnings are high enough to replace his/her SSI and Medicaid benefits. This threshold is based on the amount of earnings which would cause SSI cash payments to stop in the person’s State and average Medicaid expenses in that State.

If a SSI beneficiary has gross earnings higher than the threshold amount for his/her State, SSA can figure an individual threshold amount if that person has:

• Impairment-related work expenses; or

• Blind work expenses; or

• A plan to achieve self-support; or

• Personal attendant whose fees are publicly funded; or

• Medical expenses above the average State amount.

We often hear the question, “Does Social Security disability count as income for Medicaid?” If you depend on these services, it is essential to understand how your benefits will impact your ability to maintain sufficient support, no matter your disability status.

When you get Social Security Disability Insurance (SSDI), it may impact your eligibility for Medicaid, which provides healthcare for low-income individuals. If you need to know how SSDI affects your Medicaid benefits, we can help.

While SSDI is considered income when determining Medicaid eligibility, the whole picture is more complex, and several factors come into play.

How SSDI Impacts Medicaid Eligibility

Medicaid eligibility is generally based on your income level. Each state sets its income thresholds, often tied to the federal poverty level (FPL). In 2024, the Federal Poverty Level (FPL) income limits are as follows:

$15,060 annually for a single person

$20,440 annually for a couple

$25,820 annually for a family of three

(For people receiving a full monthly SSI payment in 2025, the annual income is $11,604.00)

For Medicaid eligibility, the income limits may differ. For non-elderly adults, the income limit is generally set at 133% of the FPL, translating to approximately:

$20,120 annually for a single individual

$27,691 annually for a couple

If your monthly SSDI payments exceed the Medicaid income limits, you may no longer qualify for Medicaid, especially during the waiting period before you are eligible for Medicare. (Medicare for people who are awarded SSDI is not available until two years after your first SSDI-eligible month.  This is typically 5 months after your established onset date.)  This leaves many SSDI recipients in a difficult position, as they may lose Medicaid benefits before gaining Medicare coverage.

Social Security Disability and Medicaid

The answer to the question, “Does Social Security disability count as income for Medicaid?” is critical. Yes, SSDI is counted as income. Medicaid uses “modified adjusted gross income” (MAGI) to assess eligibility, and SSDI falls into that category. Although SSDI benefits are not always taxable, they are still considered income for Medicaid purposes.

However, certain types of income are not included when calculating Medicaid eligibility, including:

• SSI (Supplemental Security Income)

• Workers’ compensation benefits

• Veterans’ disability benefits

• Child support payments

• In many states, SSDI recipients with a monthly income above $1,670 (or $2,265 for couples) may be disqualified from Medicaid due to these limits.

Medicaid Expansion and the Affordable Care Act (ACA): 

Does Social Security disability count as income for Medicaid

The Affordable Care Act (ACA) widened Medicaid eligibility in many states. For residents in the 40 states that adopted this expansion, the increased limit allows more SSDI recipients to qualify for Medicaid during the Medicare waiting period. 

Unfortunately, ten states did not expand their Medicaid programs, meaning SSDI recipients in these states may face more stringent income restrictions.

Next Steps: Navigating SSDI and Medicaid Eligibility

Determining how Social Security disability and Medicaid work together can be challenging, especially given the variability in state programs. 

If you have been denied Medicaid due to income, you may have the right to appeal. Contact your local Medicaid agency for more information.

Whether you are appealing a denial or seeking guidance on state-specific eligibility criteria, there are ways to secure the healthcare coverage you need during the waiting period for Medicare.

Need guidance? Call us today (833) 438-7734. We’re here to help.

Navigating Social Security Disability can be overwhelming, but you don’t have to do it alone. If you have questions about the expectations, are unsure where to start, have been denied benefits, or just need honest answers, we’re here to help.

📧 Email: attorneyvicki@getssdi.org 

📞 Phone: (833) 438-7734 

🌐 Website: www.getssdi.org