SSDI and Medicaid
If you are collecting Social Security Disability Insurance or plan to apply for benefits, you may wonder if SSDI automatically qualifies you for Medicaid. The answer is no. Qualifying for SSDI does not automatically qualify you for Medicaid, but that doesn’t mean you can’t collect SSDI and Medicaid simultaneously. The programs have different eligibility requirements. In addition, receiving Medicaid might impact your SSDI benefits.
- SSDI does not automatically qualify you for Medicaid, but you may still be eligible depending on your state’s income requirements.
- While SSI recipients automatically qualify for Medicaid, SSDI recipients may need to apply based on state-specific rules.
- SSDI recipients must wait 24 months for Medicare, with Medicaid potentially filling the gap during this period.
- Medicaid spend-down programs allow SSDI recipients to reduce their income for Medicaid eligibility by paying medical expenses.
- Medicaid buy-in programs enable some SSDI recipients to pay premiums and receive Medicaid benefits even if their income exceeds the state’s threshold.
Medicaid and SSDI Eligibility
Medicaid is a federal-state health insurance program for low-income people or others in need, including the aged and disabled. It provides coverage to people who can’t afford traditional health insurance.
There is no waiting period for Medicaid. However, there are eligibility requirements. Some states use the federal poverty level, or FPL, as the income cutoff for Medicaid eligibility. Many states have enacted a Medicaid expansion, allowing those who earn up to 138 percent over the FPL to qualify for coverage. In 2024, that figure is $1,732 monthly for a single person or $2,352 for a couple.
In contrast, SSDI is a federal program that pays monthly benefits to people who cannot work due to a qualifying disability. Eligibility for SSDI benefits is not based on income but rather on your work history and ability to work.
To be eligible for SSDI, you must have paid into the Social Security system to accumulate the required work credits, which vary by age. For example, those over 30 must have worked at least five years during the 10 years immediately preceding their disability.
You also must have a condition that meets the Social Security Administration’s definition of a disability, with the following eligibility criteria:
- The medical condition causes a severe disability that prevents you from working in your previous job or any other substantial gainful activity.
- The condition is expected to last at least one year or result in your death.
- The condition is recognized in the SSA’s list of impairments as a disabling condition or is determined to be as severe as the conditions listed.
Does SSDI Count as Income for Medicaid?
SSDI counts as income for Medicaid eligibility. Because each state sets its own limits, the amount of disability benefits you can collect and still qualify for Medicaid benefits will depend on where you live.
Check with your state’s Medicaid agency for more information about receiving medical assistance while on SSDI. If you have applied for benefits and received a denial because you are earning too much or for some other reason, you have the right to appeal the decision if you believe it is incorrect.
State Requirements
Because each state runs its own Medicaid program, qualifications vary by state. The good news is that if your income is near or under the FPL and you are disabled, elderly, pregnant, a parent, or a child, you may qualify for these health care benefits.
States that have adopted Medicaid expansion, such as California, Oregon, North Carolina, New York, Pennsylvania, and 35 others, have higher income limits for eligibility. According to Medicaid.gov, all states must provide coverage for mandatory benefits such as physician and hospital services, diagnostic services, and family planning services. Some states also provide additional benefits, such as coverage for prescription medications, dental services, and hospice care.
Receiving SSDI and Medicaid at the Same Time
Suppose you receive SSDI payments that put your income over the eligibility threshold. In some cases, you may be eligible to still receive both thanks to Medicaid “spend-down” and “buy-in” programs offered by some states.
Spend-Down Programs
If your SSDI benefits cause your income to exceed your state’s Medicaid income limits, you may qualify to participate in a “spend-down” program, sometimes called a “medically needy” program.
These programs allow you to spend down your income to meet the state’s Medicaid income limit. To get Medicaid benefits, you must submit unpaid or paid medical bills equal to or greater than the monthly spend-down amount. Once your bills reach this amount, you will get Medicaid coverage for the rest of the calendar month.
For example, if your state’s income limit for Medicaid eligibility is $1,732 per month and you are collecting the maximum SSDI payment of $3,822 per month, you would need to pay the first $2,090 in medical expenses each month. Once you pay and document those expenses, Medicaid will cover the rest.
Not all states offer this option. Alabama, Alaska, Arizona, Colorado, Delaware, Idaho, Indiana, Mississippi, Missouri, Nevada, New Mexico, Ohio, South Carolina, South Dakota, Texas, and Wyoming do not have spend-down programs.
Medicaid Buy-In Programs
The Medicaid “buy-in” program might be another option for SSDI recipients. It allows workers with disabilities who otherwise wouldn’t qualify for benefits due to income or SSDI benefits levels to still receive Medicaid coverage.
The program requires that participants “buy into” the Medicaid program by paying premiums based on their income. So, the less a person’s income exceeds the FPL, the less they will need to pay for this coverage. This coverage can also apply if you decide to work while on SSDI.
If you are collecting SSDI and already receiving Medicaid coverage with a monthly spend-down, you might wish to investigate the Medicaid buy-in program. Depending on your monthly spend-down requirement amount, it might make more sense to participate in this program instead.
SSI and Medicaid
Supplemental Security Income, or SSI, is a different program from SSDI. It is a need-based federal benefit administered by the SSA that assists certain eligible, low-income individuals who are 65 or older, blind, or disabled. Instead of work credits, SSI uses income and asset levels as eligibility requirements.
To qualify for SSI, you cannot have income that exceeds a set threshold, which changes with each year’s cost-of-living adjustment. The SSA excludes many items from your income figures, such as any work expenses related to your impairment, state or local assistance received, and a portion of your monthly wages.
Unlike SSDI, people who qualify for SSI benefits can qualify for Medicaid automatically. However, HealthCare.gov states that some recipients may need to apply. Whether you need to apply depends on your state. If you need to apply for Medicaid, the contact information for each state is listed online.
Transitioning From Medicaid to Medicare After Qualifying for SSDI
Once you qualify for SSDI, there is a 24-month waiting period for Medicare coverage. There are two exceptions to this waiting period. People with end-stage renal disease can receive expedited coverage in the month they receive a kidney transplant or three months following the start of dialysis. People with amyotrophic lateral sclerosis, or ALS, can receive Medicare as soon as they begin receiving SSDI. If you don’t fall into one of these groups, Medicaid may provide valuable access to care in the interim.
Need Assistance With SSDI?
If you have a disability that makes it impossible to work and you aren’t currently receiving SSDI benefits, we’re here to help. Our team’s goal is to make Social Security benefits simple. We will connect you with a disability advocate who can explain your eligibility and guide you through the benefits application process. Contact DisabilityAdvice.org today to get started.
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