Unearned income for Medicaid refers to money received that isn’t gained from employment or self-employment. This can include Social Security benefits, child support, alimony, VA benefits, unemployment compensation, pensions, annuities, and certain types of disability payments. When determining Medicaid eligibility, unearned income is generally counted against the applicant’s income limit, but there are some exceptions and deductions that can be applied. Understanding what is considered unearned income is important for determining Medicaid eligibility and ensuring that individuals receive the appropriate benefits.
What is Considered Unearned Income for Medicaid?
Medicaid is a state and federal program that provides health coverage to certain groups of people with low income. For people who are applying for Medicaid, unearned income is counted as part of their total income to determine their eligibility. Unearned income includes any income that you receive without working, like gifts, prizes, and awards.
- Gifts are generally counted as unearned income for Medicaid.
- The value of the gift is counted in the month that you receive it.
- Some states consider only cash gifts as unearned income.
- Other states may not consider gifts as unearned income at all.
Counting Gifts as Unearned Income
To learn more about how gifts are treated as unearned income in your state, you can contact your state Medicaid office.
- Prizes and awards are also counted as unearned income for Medicaid.
- The value of the prize or award is counted in the month that you receive it.
- Some states consider only cash prizes and awards as unearned income.
- Other states may not consider prizes and awards as unearned income at all.
Prizes and Awards as Unearned Income
To learn more about how prizes and awards are treated as unearned income in your state, you can contact your state Medicaid office.
| Group | Income Limit |
|---|---|
| Individuals | 138% of the federal poverty level |
| Families of two | 185% of the federal poverty level |
| Families of three | 232% of the federal poverty level |
| Families of four | 300% of the federal poverty level |
It is important to note that the income limits for Medicaid vary from state to state. To learn more about the income limits for Medicaid in your state, you can contact your state Medicaid office.
Understanding Unearned Income for Medicaid Eligibility
When determining your eligibility for Medicaid, knowing what’s considered unearned income is crucial. Unearned income refers to money you receive without working for it.
Types of Annuities Affecting Medicaid Income Limit
- Lump-Sum Payments: If you receive a one-time payment from an annuity contract, it’s counted as unearned income in the month of receipt.
- Periodic Payments: Regular payments from an annuity contract are considered unearned income as they’re paid.
- Interest Earned: Any interest earned on an annuity contract is counted as unearned income when credited to your account.
- Dividends Paid: Dividends paid from an annuity contract are considered unearned income when paid.
Table: Annuities and Medicaid Eligibility
| Type of Annuity | Considered Unearned Income |
|---|---|
| Lump-Sum Payments | Yes, in the month of receipt |
| Periodic Payments | Yes, as they’re paid |
| Interest Earned | Yes, when credited to the account |
| Dividends Paid | Yes, when paid |
Remember that rules for annuities and Medicaid eligibility can vary, and certain exceptions may apply. It’s advisable to consult an expert or Medicaid office for personalized guidance.
Pension
Pension is a regular payment made to a person who has retired from work. It is considered unearned income for Medicaid. Pension income can include:
- Payments from a traditional pension plan.
- Withdrawals from a 401(k) or 403(b) plan.
- Payments from an individual retirement arrangement (IRA).
- Payments from a Keogh plan.
- Payments from a Simplified Employee Pension (SEP) plan.
Retirement
Retirement income is money received from a source other than an employer in exchange for work performed for that employer. It is also considered unearned income for Medicaid. Retirement income can include:
- Social Security benefits.
- Supplemental Security Income (SSI).
- Pension payments.
- Annuities.
- 401(k) distributions.
- IRA distributions.
- Withdrawals from other retirement accounts.
Social Security Benefits
Social Security benefits are paid to people who have worked and paid Social Security taxes. They are also considered unearned income for Medicaid. Social Security benefits include:
- Retirement benefits.
- Survivors benefits.
- Disability benefits.
- Supplemental Security Income (SSI).
| Income Type | Considered Unearned Income? |
|---|---|
| Pension | Yes |
| Retirement | Yes |
| Social Security Benefits | Yes |
Is Unemployment Income Considered Medicaid Unearned Income?
Medicaid eligibility considers various types of income, including earned and unearned income. Unemployment benefits fall under the category of unearned income.
What is Unearned Income?
Unearned income is any income you receive without actively working. This can include:
- Unemployment benefits
- Social Security benefits
- Disability benefits
- Pension or retirement income
- Investment income
- Alimony or child support
How is Unemployment Income Counted for Medicaid?
In most states, unemployment income is treated as unearned income when determining Medicaid eligibility. That means it is counted against your income limit for Medicaid. The amount of unemployment income you can have and still qualify for Medicaid varies from state to state. It also depends on how many people are in your household and other forms of income you receive.
Here are some states that count unemployment benefits as unearned income for Medicaid eligibility:
| State | Counts Unemployment Benefits as Unearned Income |
|---|---|
| California | Yes |
| Florida | Yes |
| Illinois | Yes |
| Michigan | Yes |
| New York | Yes |
In some states, like California, you may be able to deduct a certain amount of unemployment income from your countable income when applying for Medicaid. This can help increase your chances of qualifying.
How to Apply for Medicaid if You’re Unemployed
If you’re unemployed and interested in applying for Medicaid, contact your state Medicaid office. You can find your state Medicaid office’s contact information by visiting the Medicaid website or calling the toll-free number 1-800-318-2596.
When you apply for Medicaid, you’ll need to provide information about your income, assets, and household members. You may also need to provide proof of unemployment, such as a letter from your employer or a copy of your unemployment benefits statement.
Conclusion
If you’re unemployed and need health insurance, Medicaid may be an option for you. In most states, unemployment income is counted as unearned income when determining Medicaid eligibility. However, the amount of unemployment income you can have and still qualify for Medicaid varies from state to state. Contact your state Medicaid office to learn more about your options.
Well, folks, that’s all there is to it! I hope this article has shed some light on what counts as unearned income when it comes to Medicaid. If you have any more questions, be sure to check out the Medicaid website or give them a call. I appreciate you taking the time to read this article, and I hope you’ll stop by again sometime!