As a result of receiving SSI, the Beneficiary will also automatically qualify for medical coverage under Medicaid.
Overview of SSI & Medicaid
The SSI program is a "needs-based" cash assistance program which is designed to insure a minimum level of income to people who are aged, blind or disabled and who have limited income and assets. In order to initially qualify and remain eligible to participate under the program, the recipient can not own countable assets (called "resources") in excess of $ 2,000 and can not have unearned income in excess of the Federal benefit rate, which as of January 2010, is $ 674 per month. If either of these maximum levels is exceeded (whether through receipt of work income, receipt of an inheritance, distributions of income from the trust, or some other cause) SSI eligibility and the accompanying Medicaid eligibility can be lost.
"Resources" for purposes of the SSI program include cash, or other liquid assets and any non-exempt real or personal property that an individual owns and which could be converted to cash to be used for that individual's support and maintenance (ie food and shelter ). Resources do not include certain exemptions items such as a home, an automobile used for medical treatment, personal property less than $ 2,000, etc. As indicated above, the maximum amount of resources which may be retained by a recipient under the SSI program is $ 2,000. Although the value of the assets in the Trust will exceed the $ 2,000 resource limitation, applicable government regulations provide that assets will not be deemed to be "available" as a resource if the SSI recipient has no ability to revoke the trust or control any distributions from it.
The amount of a person's income is used to determine both eligibility for, and the amount of, the recipient's SSI benefit. Generally, the more income a person has, the lower the SSI benefit. For SSI purposes, income is anything an individual receives during a calendar month which can be used to meet the needs for food or shelter.
Income may be in cash or "in-kind." In-kind income is when someone receives actual items of food or shelter or something that can be used to get such items, rather than cash. The receipt of any type of income will generally reduce SSI benefits on a dollar for dollar basis. So, if you were to simply give $ 100 to the recipient from the Trust, alternatively, bought $ 100 of groceries, the cash or the groceries would both be valued as income and SSI benefits would be reduced by $ 100. There is a cap on "in kind" income. Social Security can not reduce a recipient's grant more than one-third of the federal benefit rate, called the "presumed value rule," if you give the recipient items of food or shelter. We, however, recommended that you not pay for items of food or shelter from the Trust. If total cash distributions from the trust and other sources exceeded $ 694 in any given month, the recipient would not receive any SSI payments and would be ineligible for Medicaid coverage during the following month (the first $ 20 of unearned income is excluded).
Earned income, if any, will also affect eligibility for SSI . Generally, a portion of earned income will be counted. SSI will not count the first $ 65 of earned income and one-half of the reminder. Thus, in order to stay eligible for Medicaid, earnings for 2010 should not exceed approximately $ 1,400 per month. However, there is another rule called the "substantive gainful activity rule". This rule states that if the recipient is able to earn over $ 1000 per month (for 2010) consistently in competitive employment, the recipient would not have considered "disabled" any more by Social Security.
The significance of maintaining eligibility for SSI benefits can not be overstated. Although the funds actually received under the program are important; possibly more significant is the fact that eligibility for SSI automatically qualifies the recipient for Medicaid coverage. Such coverage is potentially worth hundreds of thousands of dollars, depending upon future medical needs. The alternatives to Medicaid, if any, may include Medicare and private health insurance, which are currently much less attractive in that they require premium payments (which would be quite substantial in the case of private insurance), include deductibles and co-payment requirements, and typically provide lower levels of benefits.