Solving the Medicaid Rubik's Cube

Rubik’s Cubes, and their pyramidal, spherical, and other 3D-combination-puzzle spinoffs, were very popular in the early-1980s.  Once one twisted them away from their original pattern in which each side was its own solid color, the challenge was getting them back to that point.  Every time one lined up a piece of one side in one color, it generated a corresponding change in the side of another color.  Usually not in the puzzler’s favor. 

In states like Illinois that have multiple Medicaid-eligibility categories and various types of Medicaid-funded services, each with its own eligibility criteria, finding the most appropriate fit for one’s particular circumstances can be a lot like trying to solve a Rubik’s three-dimensional puzzle.

As I have discussed before, people over the age of 18, who also have disabling conditions, may be eligible for Medicaid as 1) a low-income adult under Illinois Affordable Care Act Medicaid expansion or 2) a person who is “Aged, Blind or Disabled” or 3) a person who meets the non-financial criteria for “Aged, Blind or Disabled” but has excess income or resources or 4) a member of one of the “Special Groups of Former SSI recipients” or 5) as a worker with disabilities.  Each one has its own income and asset (or what Social Security and Medicaid call “resources”) limits, and also sometimes other eligibility criteria. 

Medicaid category	Income limit	Resource limit	Other criteria
ACA low-income adult	138% of Federal Poverty Level	None	Income of all members of “tax household” counts.
AABD Cash and Medical	100% of the Federal Poverty Level	$2,000 for individual, $3,000 for couple	Must have a Social Security or Illinois DHS determination of disability.
AABD Medical only	100% of the Federal Poverty Level	$17,500	Must have a Social Security or Illinois DHS determination of disability.
AABD Spenddown	None, but excess income must be spent down on medical care or disability support to 100% of the FPL.	None, but excess resources must be spent down on medical care or disability support to $2,000 (ind.), $3000 (cpl.).	Must have a Social Security or Illinois DHS determination of disability.
Former SSI recipient, 1619(b)	Up to $44,018 per year, calculated using SSI rules for “countable earned income”.	$2,000 for individual, $3,000 for couple.	Must have received SSI and then had SSI payable go to $0 due to earned income.
Former SSI recipient, 1634	Total amount of Childhood Disability Benefit (aka, “DAC”)	$2,000 for individual, $3,000 for couple.	Must have received SSI and then had SSI payable go to $0 due to CDB/DAC benefit.
Former SSI recipient, Pickle amendment.	Total amount of SSDI or CDB/DAC plus SSA COLA that brought SSI payable to $0	$2,000 for individual, $3,000 for couple.	Must have received SSI and then had SSI payable go to $0 due to SSA COLA.
Health benefits for workers with disabilities	350% of the Federal Poverty Level, Certain work expenses and disability-related expenses may be deducted.	$25,000 and retirement accounts are exempt resources.	Must have a Social Security or Illinois DHS determination of disability and be employed.  May need to pay premiums.

The Rubik’s Cube effect comes into play when an applicant could be eligible under more than one category.  For example, a person with a disability whose income is below 100% of the Federal Poverty Level (FPL), could be eligible under either the ACA expansion category or the AABD category.  So then, the family must consider other “sides” of the puzzle.  The benefit of using the ACA eligibility category is that the Medicaid recipient has no asset or resource limitations.  The drawback is that if the Medicaid recipient is claimed as a tax dependent—perhaps so that a single parent can maintain Head of Household filing status—the parent’s income might put the recipient over the ACA income limit for a 2-person household.  The benefit of using the AABD category is that only the Medicaid recipient’s own income is considered.  The drawback is that s/he is limited to $2,000 of countable resources.

Similarly, a worker with a disability, who formerly received Supplemental Security Income (SSI) and Medicaid concurrently, may qualify under both 1619(b) and Health Benefits for Workers with Disabilities.  The benefits of 1619(b) status are a higher earned-income threshold (because of the way earned income is counted) and no premiums.  The drawback is that all resources, including retirement accounts, must be below $2,000 for an individual.  The benefit of Health Benefits for Workers with Disabilities are the higher resource limit and the fact that retirement assets may be excluded from the resource calculation.  The drawbacks are an earned-income limit that is lower than 1619(b), again due to differences in the ways the two programs “count” earned income and the  fact that beneficiaries may be required to pay premiums.

Another dimension to Medicaid eligibility is whether or not the person with a disability is receiving services funded by a Medicaid Waiver.  In my home state of Illinois, the cost of Medicaid Waiver funded services can fulfill a person’s spend down requirement even though Medicaid and not the person her/himself, is paying the expenses.  Suppose a person with a disability has a combined income of $3,000 from employment and Social Security.  The AABD Medicaid income limit for 2025 is $1,304.  Clearly, the person has too much income to qualify without spending it down.  However, if they receive Medicaid Waiver services valued at $2,000 per month, they now have met their spend-down because $3,000 - $2,000 = $1,000 < $1,304. 

I make my living helping clients with disabilities sort out complicated situations with Medicaid, Medicare, and Social Security.  Those puzzles keep me busy enough that I have given up Rubik’s Cubes, though the Rubik’s Cube is still generally a really good, time-tested, 3D puzzle.