Question about asset limit for SSI-disability with Medicaid

November 22, 2022 4:13 PM

My sibling has a genetic disability. Because she is permanently disabled, she receives SSI-disability with Medicaid, which has a $2,000 asset limit. She has received this for decades. When her bank account exceeds $2,000, she does a "spend-down", ie, withdraws any dollars in excess of $2,000.

She is currently in the hospital long-term, and so she has not been around to pay rent, buy groceries, etc., and so her bank account eventually exceeded $2,000. Therefore, I got a financial power of attorney and withdrew over $1,500 to bring her bank balance back down to $2000.

My question is: Can I just hang on to the $1,500, or do I have to spend it on things for her and keep the receipts in case she is, for a lack of a better word, "audited" by the medicare/medicaid powers-that-be? (I did pay her rent and a small medical bill, but I still have the balance in my possession.)

posted by SageTrail to Work & Money (7 answers total)

There are generally only certain categories of expenditures that count, but it may be state by state regulations. It's very likely that you can't just hang on to the money, but you likely also may only be able to spend it on certain items for her or else she risks being kicked off Medicaid.

Does the hospital she's in have a social work department? They may have specific information or resources for your situation.
posted by lapis at 4:32 PM on November 22, 2022 [2 favorites]

Does your sibling have an ABLE account? If your sibling qualifies for SSI and developed their disability before the age of 26 she is likely eligible for an ABLE account. The first $100,000 in an ABLE account is disregarded for the purposes of SSI disability resources and other federally means-tested programs such as Medicaid.

You can deposit the $1,500 into the ABLE account (so long as the annual cap has not yet been met, which is $16,000 for 2022). The primary downsides to an ABLE account are that the funds in the account can only be used for qualified disability expenses (education, housing, transportation, health expenses, assistive devices and services, and a few other categories) and that the remaining balance in the ABLE account after paying funeral and burial expenses of a deceased account holder can be claimed by their state's Medicaid plan.
posted by RichardP at 5:38 PM on November 22, 2022 [12 favorites]

Even if you took $1,500 out of the checking account, it's still her $1,500 and she still has $3,500 of resources. She can't gift you that money—what's called a transfer for less than fair market value—or else she'll be ineligible for SSI for a couple months.

SSI is meant to be a last resort, and any countable resources above $2,000 that a beneficiary has are supposed to be spent on the beneficiary's needs. (Yes, it is an unconscionably low ceiling for resources for a program meant to give people a minimum standard of living. Congress and not the SSA staff set this amount.) Spend the $1,500 on your sibling and keep the receipts. You do NOT want her or you to be hit with an overpayment, or worse, an overpayment you're found at fault for causing and therefore can't have waived and must pay back. Turn square corners when dealing with them.
posted by Somnambulista at 5:53 PM on November 22, 2022 [5 favorites]

Im assuming that because she is in the hospital her expenses did not vanish. Those expenses should be paid. If she moves to long term care (nursing home/skilled nursing facility,Cila, etc)the check will go to the facility aside from a very teeny allowance until she is discharged (in IL thats 30 dollars a month for SNF)

In general, SSI is checking bank accounts and attestation forms of assets. In general SSI is only 800ish a month. Are you sure she has everything she needs? Can she use a new comfy blanket or slippers or underwear or socks? Does she need a phone or a place to live?

The law states with SSI about the 2,000 in assets. They are serious about it. And she can get retroactive money claw backs for over payments if discovered.

In reality many people do chose to take risks about depositing a little into a mattress or other form because in reality 2000 is barely a dental emergency (and not all dental emergencies), or a downpayment on a vehicle, or a chance to see family , or a emergency fund if something goes wrong, or a uncovered simple health procedure. In most cases people on SSI couldn't maintain over 2000 in savings even trying really hard for long if at all.
posted by AlexiaSky at 7:53 PM on November 22, 2022 [3 favorites]

Please don't assume that you can just say it's rent or whatever. Medicaid and SSI require recertification and they may require receipts, written agreements for fair-market value of services if family members are being paid as caregivers, etc. If you were squirreling $100 under the metaphorical mattress each month that might not be noticeable, but a sudden $1500 withdrawal while the recipient is in the hospital (which Medi-Cal presumably knows, because they're presumably paying for the hospital) seems much more likely to be noticed and followed up on.
posted by lapis at 8:22 PM on November 22, 2022 [3 favorites]

Asset or resource limits pertain to SSI eligibility. I would contact the Social Security office in the recipient's locality for specifics.

Medicaid expansion eliminated asset limits for adults 19-64 who now qualify based solely on Modified Adjusted Gross Income (MAGI) relative to the federal poverty level. Medi-Cal and similar state agencies do not track bank balances for such recipients. For other Medicaid patients, such as those over age 65 or working disabled people whose household income is between 138% and 250% of the poverty level, asset limits are now $130,000 or higher in California as of July 2022. Having $3500 in the bank will not disqualify you from receiving Medicaid services here.

I don't know this particular patient's situation, but a spend-down may no longer be required for continued Medicaid coverage. On the Supplemental Security Income side, yes, so talk to the SSA and ask if the surplus can be placed into an ABLE account or Individual Development Account or a trust for the recipient's benefit. It should be possible to preserve rather than expend these assets.
posted by backwoods at 9:24 AM on November 23, 2022 [3 favorites]

You have some choices, but you can’t keep the money.

If this is just a one time thing, you could spend it on her bills or her needs.

If this will be an ongoing issue, your sister should consider opening an ABLE account or forming a special needs trust. These would allow her to save more than the $2000 asset limit. There are some restrictions to each. ABLE gives her more control but has stricter limits. a special needs trust (in which she can be her own trustee) does not have an upper limit but has other restrictions. Both of these are subject to being garnished by state Medicaid programs after she dies, so keep that in mind. There is no use in saving money to be passed on in a will, the money should really be used for her needs now.

Also keep in mind that if her hospitalization turns into long term nursing home care, the majority of her SSI check will be turned over to her caregivers. It is extremely hard to get out of that system once in it. So make sure all other community living options have been extinguished before going into an institutionalized long term care situation. There are many factors involved, but it tends to happen after 100 days if nothing else is done.
posted by ferrisll at 12:14 PM on November 23, 2022 [1 favorite]