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If I go back to work and lose my SSI benefits, will I lose Medicaid?

In many states, if you receive Supplemental Security Income (SSI), you’re automatically eligible for Medicaid, the government health care program for low-income people. Those benefits can provide a crucial lifeline, medically and financially, if you become unable to work because of an illness or injury. If you are able to return to work, your SSI payments could stop because of your earnings — but that might not mean losing Medicaid.

That’s because of a program called Medicaid While Working, one of several work incentives the Social Security Administration (SSA) offers to help people with disabilities transition back into the labor force. These policies allow some beneficiaries to test the workforce waters without immediately losing their benefits.

How income affects SSI

Social Security administers SSI, a safety-net benefit for older, blind and disabled people with limited financial means. To qualify, your “countable income” cannot exceed a strict cap set by the federal government and adjusted annually for inflation. In 2022, the federal limit is $841 a month for an individual and $1,261 per month for a married couple. (The caps can vary by state because most states offer additional payments to supplement federal SSI benefits.)

Countable income includes a portion of your work earnings as well as money from other sources, such as investments, government benefits and cash aid from friends or family. Social Security can approve your application for SSI if your income is below the cap, but if it subsequently rises above the limit, you no longer qualify for monthly SSI payments.

However, even in this situation, Medicaid coverage that started as a result of you getting SSI can continue if you meet these criteria.

  • You were eligible for SSI for at least a month.
  • You still have the same medical condition that qualified you for SSI in the first place.
  • You meet all SSI eligibility requirements outside of those involving income.
  • You need Medicaid coverage in order to work.
  • Your gross earnings from work are not enough to replace your SSI, Medicaid and any government-funded personal or attendant care (for example, assistance at work or paid home caregiving services) you would no longer receive.

Understanding the Medicaid threshold amount

To determine if someone is earning enough to replace their SSI and Medicaid benefits, the SSA uses a figure called the “threshold amount,” which is calculated from the average Medicaid expenses in that state and the income amount that would end SSI cash payments there.

Since both these figures vary by state, a threshold amount that ends your Medicaid coverage in one part of the country might not do so in another. For example, someone in Alabama who received SSI because of a disability but lost it due to income could earn up to $34,521 per year and keep Medicaid, but a person in the same situation in California could earn up to $54,082 without losing Medicaid.

Keep in mind

  • You might still be able to keep Medicaid if your earnings exceed your state’s threshold amount. In certain circumstances — for example, if you have work expenses related to your impairment or medical costs that are higher than your state’s per capita Medicaid expenditures — the SSA will calculate an individual threshold to determine your continuing eligibility.
  • Most states use the SSA’s rules for determining whether you qualify for Medicaid While Working protection, but nine states have their own rules: Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North Dakota, Oklahoma and Virginia.

Published July 15, 2022