Does Social Security Income Count Towards Medicaid Eligibility Limits?

• by Christian Worstell
• November 17, 2023

Medicaid eligibility rules vary from state to state but always include a limit on income and financial assets or resources. And there are certain things that Medicaid will count or not count toward those limits. 

So what about Social Security benefits? Does that count as income for Medicaid?

In most cases, yes, Medicaid will count your Social Security check as part of your income toward those eligibility limits. That includes Social Security retirement payments, Social Security disability income (SSDI) and Social Security survivor’s benefits. Supplemental Social Security income (SSI) is not counted by Medicaid however. 

What type of income does Medicaid count? 

Medicaid uses your modified adjusted gross income (MAGI) as the measure of your income for eligibility standards. Modified adjusted gross income that Medicaid will generally count towards your income limit includes:

• Social Security retirement benefits
• Social Security disability income
• Social Security survivor’s benefits
• Wages, tips and self-employment income
• Unemployment compensation
• Retirement and pension income
• Alimony payments
• Capital gains and investment income
• Rental and royalty income
• Nontaxable foreign income
• Pensions 
• Dividends from stocks and bonds
• Interest payments 
• IRA distributions
• Estate income 

What type of income does Medicaid not count?

There are several types of income that are not counted by Medicaid toward your eligibility limit. These include:

• Supplemental Social Security income
• Child support
• Gifts
• Veteran’s benefits
• Insurance proceeds
• Beneficiary payments
• Injury payments
• Relocation pay
• Worker’s compensation
• Federal income tax refunds
• Temporary Assistance for Needy Families (TANF) payments
• Aid to Families with Dependent Children (AFDC) payments

How does Medicaid count income for married couples?

For individual applicants, the income count is very straightforward. All of the individual’s countable income is added up, and if the total is below the Medicaid limit, the person is eligible. 

The way Medicaid counts income for married couples is not as straightforward. Depending on the state in which you live and the specific type of Medicaid or Medicaid program you are applying for, your income may be counted on an individual basis, or Medicaid may count the combined income of both you and your partner. 

What is the highest income to qualify for Medicaid?

Each state sets its own eligibility requirements for Medicaid, including income limits.

Medicaid uses the Federal Poverty Level (FPL) as a benchmark to determine one’s eligibility. In most states that grant Medicaid to low-income adults, individuals are eligible for Medicaid if they have an income that is at or below 150% of the FPL. The state in which you live and the type of Medicaid you are applying for may dictate a different income amount. 

Does Medicaid come out of Social Security?

Your Medicaid benefits are not deducted from your Social Security check. Some things that may be deducted from your Social Security benefits include:

• Medicare Part B Premiums
• Court-order victim restitution
• Collection of unpaid taxes
• Enforcement of a child, spousal or family support obligations
• Overpayment of benefits 

Certain individuals may be required to pay a small premium for Medicaid, but it will not be deducted from your Social Security check directly.  

Can you have Medicare and Medicaid?

Depending on your age, financial status and whether or not you have a qualifying disability, you may be eligible for both Medicare and Medicaid. If that's the case, you'd be considered a “dual eligible” beneficiary.

Dual eligible beneficiaries can receive coverage from both Medicare and Medicaid. Depending on where you live, may also be able to enroll in a special type of Medicare Advantage plan called a Dual Eligible Special Needs Plan (D-SNP) if any are available in your area.

About the author

Christian Worstell is a senior Medicare and health insurance writer with MedicareAdvantage.com. He is also a licensed health insurance agent. Christian is well-known in the insurance industry for the thousands of educational articles he’s written, helping Americans better understand their health insurance and Medicare coverage.

Christian’s work as a Medicare expert has appeared in several top-tier and trade news outlets including Forbes, MarketWatch, WebMD and Yahoo! Finance.

Christian has written hundreds of articles for MedicareAvantage.com that teach Medicare beneficiaries the best practices for navigating Medicare. His articles are read by thousands of older Americans each month. By better understanding their health care coverage, readers may hopefully learn how to limit their out-of-pocket Medicare spending and access quality medical care.

Christian’s passion for his role stems from his desire to make a difference in the senior community. He strongly believes that the more beneficiaries know about their Medicare coverage, the better their overall health and wellness is as a result.

A current resident of Raleigh, Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism.

If you’re a member of the media looking to connect with Christian, please don’t hesitate to email our public relations team at Mike@tzhealthmedia.com.

 

 

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