ABLE Account Decision Guide Series

ABLE Accounts and Working People with Disabilities

Medicaid and ABLE Accounts for the Working Person

This section looks at three common pathways to Medicaid eligibility for people with disabilities, with a focus on working people.

Does the SSI recipient live in one of 41 states or Washington, D.C. where receipt of SSI makes a person automatically eligible for Medicaid? See SSA Program Operations Manual Systems (POMS) SI 01715.010, https://secure.ssa.gov/apps10/poms.nsf/lnx/0501715010, explaining that 34 states and Washington, D.C. provide automatic Medicaid eligibility for SSI recipients; seven states and the Northern Mariana Islands use SSI eligibility criteria for Medicaid, but require a separate Medicaid application; and the remaining nine “209(b) states” use their own criteria to determine Medicaid eligibility.

→Yes, Medicaid eligibility continues so long as the person qualifies for any amount of SSI payment. In fact, as wages increase and SSI payments are gradually reduced, the amount of extra monthly income will likewise increase in many cases, creating more money for meeting expenses related to work, a work goal and/or to contribute to an ABLE account.

→No, the discussion in this section will not be relevant to the person.
1619(b) allows former SSI recipients to retain Medicaid if they lose their right to an SSI payment because of work and earnings and other 1619(b) criteria are met. The 2021 eligibility thresholds, i.e., the maximum individual income for eligibility, range from a low of $30,848 in Georgia to a high of $80,171 in Alaska. And four states – California, Iowa, Massachusetts and Nevada – have different threshold levels for individuals who are blind. A higher individualized eligibility threshold can be established when the sum of various expenses, including medical expenses paid out-of-pocket and Medicaid expenses paid by the state, are higher than the average per capita Medicaid expenses for the state. See How Earnings Impact Medicaid, https://ssiyouthtoolkit.org/topic/6/home; SSA POMS starting at SI 02302.030, https://secure.ssa.gov/apps10/poms.nsf/lnx/0502302200.
The optional Medicaid Buy-In (MBI) program exists in more than 40 states and is known by different names in different states. The MBI allows workers with disabilities to obtain or retain Medicaid at state-determined income and resource limits.  See, Kaiser Family Foundation chart, Medicaid Eligibility through Buy-In Programs for Working People with Disabilities (based on 2018 data), https://www.kff.org/other/state-indicator/medicaid-eligibility-through-buy-in-programs-for-working-people-with-disabilities/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D and https://www.medicaid.gov/medicaid/long-term-services-supports/employment-initiatives/ticket-work/index.html Please see your state-specific information regarding the Medicaid Buy-In Program for Working People with Disabilities.  
Using an ABLE account to save for retirement does come with a risk. If the ABLE account owner dies with significant assets remaining in the ABLE account, those assets might not go to heirs named in a will as the state Medicaid program may first seek to enforce a “Medicaid Payback” provision, seeking repayment of Medicaid payments made on behalf of the person since the ABLE account was opened. If the ABLE account owner has not received Medicaid services since opening the ABLE account, there is no risk. The amount of Medicaid payback allows for outstanding qualified disability expenses, such as funeral or other expenses, to be paid. Amounts paid by the Medicaid beneficiary, as premiums to a Medicaid Buy-In program, are deducted from Medicaid payback. Any assets remaining after repayments to Medicaid pass to the estate of the ABLE account owner. Some states have passed state laws that prohibit or limit this Medicaid payback. Please see the ABLE NRC Select a State Program comparison tool to learn more about your state’s Medicaid Estate Recovery Status Policy https://www.ablenrc.org/select-a-state-program/.

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Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.