Will I Still Be Eligible for Medicaid if I Start Getting Social Security Disability?

SSDI payments may give you too much income to be eligible for Medicaid, but most states have buy-in and spend-down programs to help you qualify.

How old are you?

People can qualify for Medicaid, a federal program that is administered by the states, only if they are low-income.

What Are the Qualifications for Medicaid?

Eligibility rules vary from state to state, but some states use the federal poverty level (FPL) as the cutoff amount for Medicaid eligibility. In 2022, the FPL is $13,590 per year for a household with one person or $18,310 per year for a couple. In monthly income, that works out to about $1,113 for one person and $1,526 for a couple.

Many recipients of Social Security disability insurance (SSDI) have incomes that are too high to qualify for Medicaid under these traditional rules. And with only a few limited exceptions, people who qualify for SSDI benefits don't become eligible for Medicare until two years after the date they become entitled to receive benefits. In too many cases, Medicaid's income limits mean that individuals who get high SSDI checks will go without health insurance during their waiting period for Medicare coverage. (For help understanding when Medicare kicks in for disabled people, see our article on how long it takes to get Medicare with a disability.)

Did the Affordable Care Act Affect Eligibility for SSDI Recipients?

Many more people became eligible for Medicaid because the federal Affordable Care Act (ACA) encouraged states to raise the income cutoff for Medicaid to 133% of the federal poverty level. (In 2022, the FPL is $18,084 in annual income for an individual). In addition, the ACA overhauled the way states count income and assets for Medicaid eligibility in ways that allowed more low-income SSDI recipients to qualify for SSI during the 24-month waiting period for Medicare. But some states declined to participate in this "Medicaid expansion," so these changes only apply to residents of some states.

What Are the SSDI Income Limits for Medicaid?

When it comes to counting income, Medicaid uses the same standards as the Affordable Care Act for what counts as income: "modified adjusted gross income" (MAGI). MAGI includes all Social Security disability benefits, even though not all Social Security disability benefits are taxed by the IRS. (Note that MAGI doesn't include SSI benefits, veterans disability benefits, or workers' compensation benefits.)

Many states limit SSDI income (and any income) for Medicaid applicants to about $1,500 per month (or $2,000 for a couple). (This represents 133% of the federal poverty level.) Applicants should be aware, however, that states can have special rules that impact how Medicaid determines eligibility.

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. (Note that in most states, recipients of Supplemental Security Income, or SSI, automatically qualify for Medicaid.)

What Are Medicaid Buy-In Programs?

Several states have programs known as "Medicaid buy-ins," which allow low-income individuals with disabilities to obtain Medicaid coverage for an affordable monthly 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 could affect your disability benefits.

How Do Medicaid Spend-Down Programs Work?

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.

Check With Your State Medicaid Agency

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.

Updated April 11, 2022

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