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How Does an SSI Back Payment Affect Medicaid Eligibility?

Medicaid is a state-operated, federal- and state-funded health insurance program for low-income individuals from specific qualifying groups, including pregnant women, children, the elderly and the disabled. Supplemental Security Income (SSI) is provided to elderly and disabled individuals with an insufficient work history to qualify for disability or retirement benefits. Receiving an SSI back payment may affect your eligibility for Medicaid.

  1. Resource Limit

    • To be eligible for Medicaid, an individual or couple must fall below a specific resource limit. Typically, this resource limit is $1,500 for an individual and $2,250 for a couple but may vary depending on the state, type of Medicaid program and other factors. Resources include cash on hand, checking and savings accounts, stocks, bonds, IRAs, vehicles except for one if it is used for transporting the Medicaid enrollee, houses except for one if it is the primary residence, land, rental property, life insurance policies with a cash value, revocable trusts and any other item with a significant cash value. Your back payment amount will count toward your resource limit for the months that you continue to have it in your possession. For example, if you receive a back payment of $12,000 in March and do not spend any of it for the next four months, you will be ineligible for Medicaid in April, May, June and July.

    Income Limit

    • Medicaid has income limits that must be met in order to be eligible for Medicaid. The specific income limit varies significant depending on the state, type of income and specific type of Medicaid program that you are enrolled in. If you are employed and are enrolled in a "MedWorks" program, a Medicaid program where you pay a monthly premium to remain eligible if you are employed instead of paying a spenddown, the back payment will not likely have any affect on your Medicaid coverage. However, if you are enrolled in traditional Medicaid, you may have to pay a spenddown.

    Spenddown

    • An individual who receives a large back payment from SSI may be required to pay a spenddown for the month that the back payment is received. This varies depending on the specific state. In some states, receiving SSI excludes a person from having to pay a spenddown. However, in other states, exceeding a specific income amount, typically $690 per month, even if it is through SSI funds, is enough for an individual to be required to pay a spenddown.

    Reporting

    • You must report any changes in your income to remain eligible for Medicaid. When you receive the back payment, you must notify Medicaid within 10 days of the change. Failure to notify Medicaid of any changes will likely result in you being required to refund Medicaid for any expenses that you would have been required to pay had you reported your back payment. You may also be fined and excluded from the Medicaid for failure to report income changes.

    Receipts

    • Save your receipts for any purchases involving your SSI back payment funds. You will be required to provide evidence that you are no longer in possession of the back payment amount after 30 days to remain eligible for Medicaid. You may be ineligible for Medicaid for up to 60 months, depending on the amount of the back payment and your state's specific requirements, if you are unable to account for how the back payment was spent.

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