ABLE Account Decision Guide Series

Understanding ABLE Account Savings and Public Benefits

Key Medicaid programs, not related to SSI payments, include: the spend down program (about two thirds of states have it); and the Medicaid for working individuals program commonly known as “Medicaid Buy-In” program (more than 40 states have it, with a variety of different names for the program). The key federal policy governing the effect of ABLE account assets and distributions on state Medicaid eligibility determinations is found in the Centers for Medicare and Medicaid Services (CMS) Dear State Medicaid Director letter, SMD# 17-002 (Sept. 7, 2017), https://www.medicaid.gov/sites/default/files/federal-policy-guidance/downloads/smd17002.pdf.
Countable income above a state-specific limit results in a spend down or beneficiary obligation toward the cost of services before Medicaid is implemented.

→Effect of ABLE account assets
No impact on Medicaid eligibility

→Effect of ABLE account distributions
Distributions not counted as income, whether payment is for QDEs or non-qualified expenses. However, federal SMD# 17-002 provides that states can treat distributions as resources if retained after the month of receipt and used for a non-qualifying expense or housing expense.

Eligible individuals must have earned income and meet state-specific eligibility criteria. These programs generally allow much higher levels of income than other Medicaid programs.

→Effect of ABLE account assets
No impact on Medicaid eligibility                       

→Effect of ABLE account distributions
Distributions not counted as income, whether payment is for QDEs or a non-qualified expense.  However, federal SMD# 17-002 provides that states can treat distributions as resources if retained after the month of receipt and used for a non-qualifying expense or a housing expense.

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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.