Managing Medicaid qualifications can be complex for seniors needing extra healthcare support. States’ strict income and asset limits mean exceeding them, even just barely, could jeopardize your benefits. Additionally, the implementation of the Social Security Fairness Act might be good news for some seniors who may see benefit increases. However, this could impact Medicaid eligibility.
This post explores these changes to Social Security payments and what they could mean for Medicaid beneficiaries.
What Medicaid Recipients Need to Know About the Social Security Fairness Act
Breaking Down Social Security Payment Changes
The purpose of the Social Security Fairness Act was to repeal the Government Pension Offset (GPO), and the other was the Windfall Elimination Provision (WEP). These provisions reduced Social Security benefits for some workers with certain government pensions.
With the repeal of these provisions, affected SS recipients will now be eligible for benefit increases. Starting in February 2025, the Social Security Administration began to roll out back payments to eligible recipients. These back payments addressed benefit losses resulting from the GPO and WEP. The amount of benefit increases varies depending on several factors. However, it could result in a monthly increase of over $1,000 for some seniors.
If you are eligible for a lump-sum payment, SSA should have sent the money to your bank account on file. The SSA planned to distribute all back payments by the end of March 2025. Monthly benefit increases should start in your monthly payment starting in April 2025.
While these increases will help many retirees, they could unintentionally impact Medicaid eligibility. Additional monthly income or lump sum payments might put some recipients above Medicaid’s strict income and asset limits.
Impact on Income Limits
States have income limits for Medicaid eligibility. For example, Florida’s regular Medicaid recipients can’t have over $1,149 monthly income. For long-term care Medicaid, the limit is $2,901. Let’s say you use the long-term care waiver for home and community-based services. If your SS goes up a few hundred dollars, it could easily exceed the $2,901 limit. That could put your benefits at risk. However, you can use spend-down rules to maintain eligibility.
Impact on Asset Limits
Like income limits, Medicaid recipients may also need to worry about asset limits and eligibility. Staying in Florida, the asset limits are $5,000 for regular Medicaid and $2,000 for long-term care. Between lump-sum payments and increases to monthly payments, many may be at risk of losing their eligibility. For example, you could receive a lump-sum payment of up to $4,000. If you don’t spend the excess in time, it could push you over the asset limit. The same could also be true for any extra amount you may save from monthly payments.
If you’re on Medicaid and receive a benefits increase or lump-sum payment, you must take steps to protect your eligibility. Consult an attorney with Medicaid planning experience. They could help with spend-down strategies or creating Medicaid-compliant trusts. You must act quickly as these are time-sensitive matters.
Do you or a loved one need help navigating Medicaid planning after receiving an SS benefits increase? The team from Scott Law Offices can help with planning, setting up Medicaid trusts, and spend-down strategies. Reach out now to learn more.
