How Obamacare Affects Social Security and People With Disabilities

Before the Affordable Care Act (ACA) was passed, people with disabilities had a hard time getting health insurance. A big reason for this was that insurance plans could deny people benefits due to preexisting conditions—something that the ACA (also known as Obamacare) changed. One way to get health insurance before Obamacare was to apply for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), because Medicare coverage comes with SSDI benefits and Medicaid comes with SSI.

But since Obamacare fully went into effect in 2014, the number of disabled people without health insurance has dropped by half. And at the same time, annual applications for SSDI have dropped by about one-third. Whether you're thinking about applying for coverage under a plan on the ACA health care exchange or you're curious about how the ACA interacts with your Social Security disability benefits, it's useful to understand the basic provisions of the law so that you can get the medical treatment you need.

Expanded Access to Health Insurance and Lower Premiums Under the Affordable Care Act

Two major healthcare policy changes instituted by the ACA included getting rid of insurance exclusions for preexisting conditions and allowing people without employer-provided insurance to purchase their own plan through the Health Insurance Marketplace. Both of these key provisions had a major impact on people with disabilities, many of whom couldn't get the regular medical treatment they needed (and whose quality of life suffered as a result).

Elimination of Preexisting Condition Exclusions

Before the ACA, private insurance companies could (and often did) refuse to cover treatment for what they referred to as "preexisting conditions," meaning any medical impairment that a policyholder had before their current health plan started. One way that President Obama's health care reform helped make health insurance accessible to more people is by eliminating exclusions for preexisting conditions. (42 U.S.C. § 300gg-3 (2026).) Due to the ACA, insurance companies can no longer refuse, limit, or charge more money for coverage of a preexisting condition. This was a big benefit to people with disabilities, who are now able to purchase private health insurance.

Cheaper Health Insurance for People With Limited Income

For people with medical impairments that keep them from working full-time, getting health insurance through an employer isn't typically an option. Following the passage of the ACA, however, individuals without group health insurance are now allowed to purchase a plan through the Health Insurance Marketplace. (42 U.S.C. § 18031 (2026).) People with low income (less than 400% of the federal poverty level) are eligible for cheaper premiums (through premium tax credits), and those with even lower income (250% of the federal poverty level) can further qualify for reduced out-of-pocket costs like deductibles and copays. (See Nolo's federal poverty guidelines for exact figures.)

How the ACA Helps Keep People Off Social Security Benefits

These two provisions of the Affordable Care Act—getting rid of exclusions for preexisting conditions and expanding insurance coverage for low-income individuals—had the effect of reducing the number of people on Social Security disability benefits. Here's why:

• Before the ACA, many people with preexisting conditions who lost their prior work-based health coverage would apply for disability just so they could get health care benefits, since they knew that being approved for SSDI meant you were eligible for Medicare, and getting SSI meant that you could enroll in Medicaid. When the ACA came along, some people who would have otherwise filed for Social Security benefits to get health insurance were able to buy a plan through the marketplace instead.
• With improved access to health care and reasonably priced medications, more people with chronic medical conditions may be able to work full-time despite their physical or mental impairments, leading to a drop in applications for disability benefits.
• Because you need to be unable to work full-time for at least 12 months to qualify for Social Security disability, people with temporary disabilities are less likely to apply for benefits, as they may be able to recover sooner thanks to better access to doctors and increased medical attention.

How the ACA Can Help People With Disabilities Get SSDI or SSI Benefits

While the ACA has helped lessen the need for people with disabilities to apply for SSDI or SSI, it's also helped people whose applications would have previously been denied to qualify for benefits. That's because the Social Security Administration (SSA) relies heavily on medical records to determine whether or not an applicant meets the agency's definition of disability, and one of the most common reasons why applicants are denied is because they haven’t been seeing a doctor for treatment. (Without evidence of ongoing care, Social Security doesn't have the information it needs to find the applicant disabled.)

Now that health care is more accessible, more people who apply for disability will have been seeing doctors regularly and have the proper diagnoses, lab results, and X-rays in their records. This preparation helps eliminate the need for Social Security to send applicants to consultative examinations and potentially reduces the number of disability appeals. More cases with comprehensive medical records means that fewer claimants are incorrectly denied in the first place, speeding up the process and making sure that needed benefits are granted more quickly.

Can I Get SSDI If I Have Medicaid or Obamacare?

First, it's important to distinguish SSDI and SSI. Both offer monthly cash payments to disabled adults, but SSI is a needs-based benefit available to people with limited income and assets, while SSDI eligibility is based on your employment history and how much you've earned in work credits.

Qualifying for SSDI has nothing to do with your health insurance provider, so you can get SSDI if you have Medicaid or Obamacare as long as you have enough work credits.

That said, if you're approved for SSDI benefits, you'll be enrolled in Medicare once you've received two years of SSDI payments, at which point you won't need a marketplace plan. If you don't have enough in work credits to qualify for SSDI but you have income and resources below the eligibility threshold for SSI, most states will automatically enroll you in Medicaid if your application for SSI benefits is approved.

Does Social Security Count as Income for Obamacare?

Although nothing prevents you from getting health insurance through the marketplace if you're receiving Social Security disability benefits, any income from Social Security does have to fit under the income limits for Obamacare. SSDI benefits do count as income when determining whether you qualify for Obamacare, but SSI does not.

When determining whether you qualify for Obamacare and the premium tax credits, you're asked to calculate your "modified adjusted gross income" (MAGI), which includes even the non-taxable portion of your SSDI benefits. (The same goes for retirement, dependents, or survivors benefits.) But SSI doesn't count towards your MAGI, so if you're receiving SSI, don't include that in your estimate. You also don't have to count child support, veterans disability payments, or workers' compensation in your MAGI.

Having Insurance Is Important for Your Disability Claim

Social Security is aware that, even after Obamacare, health care can be prohibitively expensive. But because the ACA significantly expanded access to insurance, if you don't currently have health insurance, the SSA will want to know what options you've tried. It's a smart idea to explore the health care marketplace to see what's out there. In the best case scenario, you'll find a plan that fits your needs and budget, but even if you can't afford the reduced-rate coverage, you'll at least be able to explain to Social Security that you researched the plans and made an informed judgment call. That's much better than not doing anything or pleading ignorance of the (heavily publicized) Affordable Care Act when the SSA asks why you're not seeing a doctor.

For further information on financial assistance, check out our set of articles on programs that offer financial support for people with disabilities.