Does Social Security Count as Income for Medicaid?

Medicaid eligibility comes almost completely down to income, forcing beneficiaries to monitor income closely.

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While Medicaid rules vary from state to state, every program has set income limits to determine eligibility. A common question is whether Social Security benefits count towards this income. In every state, your Social Security check is counted as part of your eligible income.

What type of income does Medicaid count?

To determine your income eligibility, Medicaid uses your modified adjusted gross income (MAGI). Gross income is what you make before any deductions, and adjusted income is the total taxable amount of earnings. Your MAGI is the total taxable and non-taxable amount of earned and unearned income. Income that counts towards your MAGI includes:

Alimony payments
Capital gains and investment income
Dividends from stocks and bonds
Estate income
Interest payments
IRA distributions
Non-taxable foreign income
Pensions
Rental income
Social Security disability income
Social Security retirement benefits
Social Security survivor's benefits
Unemployment payments
Wages, tips, and self-employment earnings

How is income eligibility determined?

In many states, SSI recipients automatically qualify for Medicaid. However, each state can place its own qualifications on income. Some states use the federal poverty level as a metric. In 2023, the federal poverty level is:

$14,580 per year for a single person household, which is $1,215 per month
$19,720 per year for couples, which is $1,643 per month
$24,860 per year for a family of three, which is $2,072 per month

More people qualified for Medicaid after the introduction of the Affordable Care Act (ACA), which encouraged states to raise the income cutoff to 133% of the poverty level for Medicaid programs. As of the beginning of 2023, the following states have still not expanded Medicaid coverage:

Alabama
Florida
Georgia
Kansas
Mississippi
North Carolina
South Carolina
Tennessee
Texas
Wisconsin
Wyoming

The best way to see what your state Medicaid program uses as their cutoff metric and what it covers is to contact the state directly.

What income does Medicaid not count?

Though Medicaid does count many resources towards your eligible income, some sources do not count, including:

Aid to Families with Dependent Children (AFDC) payments
Beneficiary payments
Child support
Federal income tax refunds
Funds from loans (home-equity, private, or student)
Gifts
Injury payments
Insurance proceeds
Relocation pay
Supplemental Social Security income
Temporary Assistance for Needy Families (TANF) payments
Veteran's benefits
Worker's compensation

What is a Medicaid buy-in program?

Some states have what is called a Medicaid "buy-in", allowing low-income people with disabilities to purchase Medicaid for a low monthly premium. To qualify, you must:

Be considered low-income
Be working (requirements may be as low as an hour or two each month)

But remember, if you go back to work to get Medicaid benefits, remember that working can affect your disability benefits.

What is a Medicaid spend-down program?

Also known as "medically needy" programs, some states have Medicaid spend-down programs, which allow those on SSDI with high medical expenses to qualify for Medicaid. You typically qualify if paying for medical expenses reduces your income to Medicaid eligibility levels. This includes your child's or spouse's medical expenses, and it does not usually matter if the costs are current or overdue bills. Check the link above to see whether your state Medicaid has a spend-down program.

Does Medicaid count income differently for married couples?

Figuring out what to count as income for an individual is fairly straightforward, but people often wonder how that works when it comes to married couples. The way income is counted for married couples depends on the state you live in and the Medicaid program you are applying for. In some cases, income is counted separately for each individual. In others, the combined income of the couple is counted and that is the threshold they look at. The easiest way to see how your state Medicaid program counts income for married households is to contact the program directly.