Is Social Security Counted as Income for Medicaid?

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In most cases Social Security benefits will be counted as income toward Medicaid eligibility, however, there are some exceptions. Rules, restrictions, and income thresholds vary from state-to-state. It’s confusing. Let’s sort it out.

Assets & Medicaid

Medicaid is a health insurance program funded by both the federal government and the state an applicant resides in. The purpose of Medicaid is to provide assistance for medical costs for disabled or low-income individuals. Each state has its own set of differing requirements concerning what assets you can own and still qualify for Medicaid.

Many different types of assets are considered in order to determine your eligibility including cash, motor vehicles, and real property. Another “asset” that is considered as part of your Medicaid application is Social Security benefits. A common question is “because you collect Social Security benefits will you now not be eligible for Medicaid?”

Social Security Benefits

It is essential to know that Social Security benefits are not exempt from Medicaid. Payments you receive from Social Security are counted as income. Nevertheless, you are not automatically barred from obtaining Medicaid coverage just because you receive Social Security benefits.

When looking at your assets, your state’s Medicaid program will combine your Social Security benefits with your other assets.

If you are receiving Social Security income from a deceased spouse or parent, those payments will be counted as income for Medicaid purposes. Additionally, general Social Security payments, which include taxable and nontaxable Social Security income, will be counted as an asset along with some Social Security Disability Income (SSDI).

Supplemental Security Income

However, if you receive Supplemental Security Income (SSI), that income will not be counted. SSI pays monthly benefits to people with limited income and resources or disabled, blind, or those 65 years or older. SSI differs from Social Security benefits and can provide for automatic Medicaid approval in some states.

Some of the confusion stems from the fact that SSI is administered by the Social Security Administration. To confuse things even further, if you are entitled to SSI, you may also qualify for Social Security benefits.

Medicaid Eligibility

Eligibility requirements for Medicaid can be extremely confusing especially when Social Security benefits are involved. To make matters worse, each state has its own set of rules and regulations concerning Medicaid.

The general rule of thumb is if you are receiving Social Security benefits alone, they will likely be counted towards your income when you apply for Medicaid. In order to qualify for Medicaid, your income must fall below your state’s threshold. On the other hand, if you are receiving SSI, you might automatically be eligible for Medicaid.

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This article is for informational purposes only and should not be considered legal advice. Consult with a qualified attorney or estate planning professional for personalized guidance.



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