Medicaid & Work
Nuts & Bolts
A person’s Medicaid eligibility can be impacted by their earned income. In most cases, Medicaid can continue thanks to the 1619(b) work incentive. This work incentive is available when the monthly SSI payment is reduced to $0 due to work and earnings.
The Medicaid Program: A Brief Summary
Medicaid, also known as Medical Assistance, is an optional federally supported program. All states have chosen to have a Medicaid program. When a state pays for federally authorized services through Medicaid, the federal government reimburses that state for a percentage of those costs. State Medicaid programs operate on a basic structure of federally mandated and optional service categories, and no two state programs are exactly alike.
Medicaid Eligibility Is Automatic for SSI Beneficiaries in Most States
In 41 states, the District of Columbia, and the Northern Mariana Islands, an SSI beneficiary is automatically eligible for Medicaid. In most of those states, known as “1634 states,” there is no need for a separate Medicaid application. In eight states (Alaska, Idaho, Kansas, Nebraska, Nevada, Oklahoma, Oregon, and Utah) and the Northern Mariana Islands, a separate Medicaid application is required and then SSI payment status is enough to establish Medicaid eligibility.
Even if a recipient gets a reduced SSI payment because of wages or unearned income, the individual will qualify for automatic Medicaid in these 41 states.
Medicaid Eligibility for SSI Beneficiaries in the Section 209(b) States
Medicaid eligibility is not automatic for SSI beneficiaries in the nine Section 209(b) states. In these states, Medicaid eligibility is based on state-specific criteria that are different from the SSI criteria. These states include Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North Dakota, Oklahoma, and Virginia.
Keeping SSI While Working
When the SSI program calculates a monthly SSI amount, it looks at an array of information, including unearned income, earned income, and applicable work incentives (see Tool 3). No matter how little the SSI payment (even if it is $0), so long as the beneficiary continues to be eligible for SSI, their Medicaid will continue in the 41 states in which Medicaid is automatic for SSI beneficiaries.
Example of Keeping SSI While Working: Karina
Karina gets $914 per month in SSI payments and starts a job making $885 gross per month. She has no other income. Karina’s SSI Countable Earned Income will be $400, and her new monthly SSI payment will be $514. Since she lives in a state in which Medicaid is automatic for SSI recipients, she will continue to be eligible for Medicaid. Even if her monthly wages were high enough that her SSI payment was zero, she would still be eligible for Medicaid. (If Karina lived in one of the nine 209(b) states in which Medicaid is not automatic for SSI beneficiaries, her continued eligibility for Medicaid while working would depend on the rules in her state.)
Karina’s Gross Earned Income
Subtract the $20 General Income Exclusion
$885 – $20 = $865
Subtract the $65 Earned Income Exclusion
$865 – $65 = $800
Divide by 2 to compute the Countable Earned Income
$800/2 = $400
Subtract the Countable Earned Income from the SSI Federal Benefit Rate (2023) to compute Karina’s SSI payment
$914 – $400 = $514
Karina’s Total Income
$514 (SSI) + $885 (wages) = $1,399
Keeping Medicaid after Losing SSI Due to Wages: The 1619(b) Work Incentive
The 1619(b) work incentive is available in all states. When an SSI payment is reduced to $0 due to work and countable wages, 1619(b) allows Medicaid eligibility to continue indefinitely in most cases. A recipient should be able to keep Medicaid after losing SSI because of countable wages, if all the following 1619(b) criteria are met:
- The individual continues to meet the SSI disability or blindness criteria.
- The individual’s unearned income is still within SSI limits, and their resources are within SSI limits.
- The individual received SSI payments, or was 1619(b) eligible, at some time during the last year.
- The individual will need Medicaid for foreseen or unforeseen expenses. That is, they meet an “expected to use Medicaid” test. An individual can meet this condition with just one of the following: They used Medicaid in the last 12 months, or they expect to use Medicaid in the next 12 months, or they would be unable to pay unexpected medical bills in the next 12 months without Medicaid. Nearly everyone should meet at least the third test.
- The individual’s annual income is below a state-specific threshold. These thresholds differ greatly from state to state. About half the states have a threshold below $45,000 per year. Every calendar year, SSA publishes an updated 1619(b) eligibility earnings threshold chart for all states, the District of Columbia, and the Northern Mariana Islands. If gross annual earnings are higher than the state’s 1619(b) threshold, eligibility may be established with an “individualized” threshold (see below).
- If the individual resides in one of the nine 209(b) states (Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North Dakota, Oklahoma, and Virginia), they must also have been eligible for Medicaid in the month immediately prior to becoming eligible for 1619(b).
Example of Keeping Medicaid with 1619(b): Raj
Raj receives an SSI payment of $914 per month, with no State Supplement. He resides in one of the 41 states in which Medicaid is automatic for SSI beneficiaries. He takes a job earning $2,085 gross per month and stops receiving SSI payments because his monthly Countable Income after all exclusions—$1,000 ($2,085 – $20 – $65 = $2,000/2 = $1,000)—is more than the maximum SSI Base Rate. His projected $25,020 annual income is below the 1619(b) eligibility threshold for every state. He will be eligible for continued Medicaid so long as he meets all other 1619(b) criteria.
Establishing a Higher, “Individualized” Eligibility Threshold for 1619(b)
If an individual’s gross annual earnings are higher than the state’s 1619(b) threshold, eligibility may be established by adding:
- A base amount taken from SSA’s threshold chart
- The state Medicaid amount from the threshold chart (a state annual average of Medicaid expenditures per recipient), or annual Medicaid-funded expenses if higher
- Impairment-Related Work Expenses and/or Blind Work Expenses (see Tool 4)
- Money set aside in an approved Plan to Achieve Self Support; this is relevant only in the nine 209(b) states, since PASS results in SSI and Medicaid eligibility in the other 41 states
- The cost of publicly funded attendant care that would be lost due to the individual’s earnings
In the great majority of cases, eligibility is established by virtue of very high Medicaid costs. If you plan to earn more than your state’s 1619(b) threshold, ask SSA for an individualized threshold determination. SSA will contact your state Medicaid agency for information about your actual Medicaid expenses. SSA should already have information about your IRWEs, BWEs, and PASS account.
Moving between 1619(b) Status and SSI Payment Status
The 1619(b) work incentive allows for free movement from SSI payment status, to Medicaid-only status, then back to SSI payment status without a need for a new application each time SSI payments resume.
This is an important safety net work incentive that should encourage recipients to take jobs even if the long-term stability of the job or the amount of work hours is uncertain. (For an example, see the case study in this tool Christina’s Work Hours Change.)
The Optional Medicaid Buy-In (MBI) for Working Individuals Program
Although most SSI beneficiaries who work keep Medicaid through the 1619(b) program, some do go over the income or resource limits. For these people, Medicaid Buy-in (MBI), which is available in more than 40 states, can continue to provide Medicaid eligibility. Sometimes the words Medicaid Buy-In are in the state program’s name; sometimes they are not. The program’s federal design assumes that states will charge monthly premiums for Medicaid coverage. These premiums have a sliding scale.
MBI programs have eligibility requirements for age, income, resources, and disability:
- Age: Generally, MBI enrollees must be at least age 18 and less than age 65. (There are no age limits if the program was authorized by 1997 legislation. Although a few states created MBI programs authorized though 1997 legislation, the majority of MBI programs were enacted under the authority of Section 201 of the 1999 Ticket to Work and Work Incentives Improvement Act.)
- Income and resources: States can establish their own income and resource limits for the program. The majority of states have established monthly Countable Income limits at 250 percent of the Federal Poverty Level ($2,037 per month in 2023). Individuals must have earned income. Several programs have established much higher income limits, and some programs have no income limits. States use the SSI rules for determining Countable Income and Countable Resources.
- Disability: Individuals must meet the medical criteria to establish disability in the SSI program, but earnings above a substantial gainful activity level are not relevant to eligibility.
Example of Medicaid Buy-In: JP
JP receives monthly Social Security disability payments of $950 and no SSI. Prior to starting work, he received Medicaid with a spend-down of $200 per month. JP starts a job earning $1,500 per month ($18,000) per year.
JP is now eligible for his state’s MBI program because:
- JP’s total monthly SSI Countable Income is $930 from Social Security ($950 unearned income – $20 General Income Exclusion) and $717.50 from earnings ($1,500 – $65 = $1,435/2 = $717.50). This comes out to $1,6,47.50. This amount is less than the monthly limit for his state’s MBI program, which is $3,037.
- JP’s resources are less than the limit set by his state’s MBI program.
If You Are a Counselor
If you are a counselor, you should check your state Medicaid agency’s website for basic information about how that program operates and its eligibility criteria. You can share this information with people who may be eligible.
As a counselor, you should understand how SSI and Medicaid interact in your state or region. For example, you should know whether a separate Medicaid application is needed for SSI recipients. If an application is required, you should know how to file it. You can contact a state or regional Work Incentive Planning and Assistance (WIPA) project to learn that information (see the More Info page on this site).