Only low-income disabled people can qualify for Medicaid, a federal program that is administered by the states. Eligibility rules vary from state to state, but many states use the federal poverty level (FPL) as the cutoff amount for Medicaid eligibility. In 2013, the FPL is $11,490 for a household with one person.
Many recipients of Social Security disability insurance (SSDI) have incomes that are too high to qualify for Medicaid under current law. And with only a few limited exceptions, people who qualify for SSDI benefits do not become eligible for Medicare until two years after the date they become entitled to receive benefits. (For help understanding how long it will take to get Medicare, see our article on how long it takes to get Medicare with a disability.) In too many cases, that means that individuals who get a high SSDI check will go without health insurance during their waiting period for Medicare coverage.
Fortunately, there are a few programs that can offer a way for some disabled adults who are "over-income" for Medicaid to qualify while they wait for Medicare coverage.
Several states have programs known as “Medicaid buy-ins,” which allow low-income disabled individuals to obtain Medicaid coverage for an affordable premium. These programs are generally limited to low-income disabled individuals who are working, although the work requirement can be very limited, like an hour or two each month. Before you go back to work to qualify for a Medicaid buy-in, give careful thought to how your work will affect your SSDI benefits.
If you receive SSDI and have high medical expenses that reduce your monthly income to the Medicaid eligibility level, you might be able to qualify for Medicaid if your state has a Medicaid spend-down program. These programs (usually called "medically needy" programs) allow disabled individuals to qualify for Medicaid when they (or their spouse or child) have high medical expenses (either ongoing or past due bills). Contact your state’s Medicaid agency to find out whether you qualify for a spend-down program.
Beginning in January 2014, many more people will be eligible for Medicaid because the federal Affordable Care Act (ACA, commonly known as "healthcare reform," or "Obamacare") will make states raise the income cutoff for Medicaid to 133% of FPL. (This is $15,282 in annual income for an individual in 2013). In addition, the ACA will overhaul the way states count income and assets for Medicaid eligibility in ways that will allow many more low-income SSDI recipients to qualify for SSI during the 24-month waiting period. However, in June 2012, the U.S. Supreme Court ruled that the federal government cannot force the states to participate in this Medicaid expansion. Some states will opt out of the expansion. On the other hand, several states have already expanded Medicaid services or will do so before the federal deadline.
The bottom line is that there is variation among the states in the kinds of insurance programs that may be available to SSDI recipients during the 24-month waiting period. Check with your state’s Medicaid agency to see if you qualify for any medical assistance programs. You can find the website for your state’s agency by selecting your state from the map on the Medicaid website. If you are denied Medicaid because of financial ineligibility, you have the right to appeal the Medicaid denial.