Does Social Security Count as Income for Medicaid?

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.

Do Medicaid payments come out of my Social Security?

No, Medicaid benefits are not taken out of your Social Security check. However, the following items may be taken out of your Social Security payment:

  • Court-order victim restitution
  • Enforcement of child, spousal, or family support
  • Medicare Part B premiums
  • Overpayment of benefits
  • Unpaid taxes

Though some individuals have to pay a small Medicaid premium, it will never come out of your Social Security benefit.

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