Social Security and Medicaid Health Care Benefits

When I was a newly minted attorney (while I was still learning the probate code and preparing very simple wills), a family came into the office for an initial consultation. A mother whose disabled son was turning 18 years old was concerned about preserving his Social Security income. She wanted to make sure that if something happened to her, his basic needs would be met and that the income he earned from his job at the local grocery store—which made him very happy—wasn’t jeopardizing his Medicaid health benefits. After I excused myself and found a partner who knew this case was over our heads, we provided a referral, and the family was safely in the counsel of a special needs planning attorney. However, I still think about her and wish I had a basic understanding of the benefits that were so important to their family.

Read More: Past, Present & Future: The History of Medicaid

Having at least a basic working knowledge of Social Security and Medicaid health care benefits can help you and your clients with disabilities.

Social Security and Medicaid Benefits

Supplemental Security Income: Supplemental Security Income (SSI) is an income stream for people with disabilities who cannot work to support themselves. The maximum individual benefit is $943 per month in 2024, which is supposed to cover shelter and food expenses. However, the actual benefit amount can be reduced by income and in-kind support and maintenance. There is also an asset test similar to Medicaid’s Individual Resource Allowance. SSI can be the most important benefit for many families because it can create automatic qualification for Medicaid health insurance and community benefits in some states. Even maintaining one dollar of SSI can be essential for the quality of life of some clients.

Social Security Disability Insurance: Social Security Disability Insurance (SSDI) provides income for individuals and their families if they cannot work due to a medical condition. The benefit amount is based on hours worked and each worker’s lifetime contribution to the program through Social Security taxes on earnings. Therefore, SSDI benefit amounts can vary greatly from family to family. Qualification for SSDI requires a finding of inability to perform labor as well as proper hours worked and wages taxed.

Medicaid Health Coverage: The Medicaid health coverage programs vary greatly from state to state. Qualification is generally focused on income and family size. It is also commonly referred to as “community Medicaid” in that it provides insurance for low-income people and allows them to stay in the community rather than in a nursing home or assisted living facility. In some states, if a person is receiving one dollar of the SSI benefit, they are automatically qualified for this Medicaid health benefit. It can be an essential provider of health care, caregiving services, and transportation, and qualifying can open the door to other benefits, like food stamps and housing programs, depending on program construction in each state.

Medicaid Long-Term Care: Long-term care benefits generally require a person to be: over 65, blind; or disabled; live in a nursing home; and have very few assets in order to qualify. It is the only program that pays for long-term care after rehabilitation and can be essential for families with a loved one in a nursing home. There are home and community-based programs that can also assist with assisted living or in-home care, but those programs vary greatly from state to state and are generally underfunded with long waiting times for benefits.

These are the most used Social Security and Medicaid programs, and there are nuances to each. However, having this basic understanding can help attorneys lead conversations with clients to identify the importance of each program to their families and how to best plan for each.

To learn more about these benefits and how to plan for them, view a recording of our CLE webinar on the intersection of estate planning and unexpected disability.