Sometimes Disability Benefits Can Be a Bad Thing

 

Social Security Disability Insurance (SSDI) is a federal
program that provides cash assistance to people with disabilities who are
unable to participate in sustained gainful activities. Unlike some programs,
like Supplemental Security Income (SSI) and Medicaid, SSDI provides benefits to
people regardless of their financial circumstances. Because SSDI is an
insurance program that most workers contribute to through payroll taxes, as
long as an SSDI recipient is not earning much money from working, he or she can
have unearned income (income not earned by working) and unlimited resources and
still receive SSDI. On top of the cash benefit, people receiving SSDI also
qualify for Medicare benefits once they have been eligible for SSDI for 24
months

All this makes SSDI an attractive government benefit, but
there is a serious drawback. If you are receiving SSI or Medicaid benefits,
which do have very strict income and resource limits, receipt of SSDI could
cause you to lose your SSI or Medicaid benefits. In some cases, the cash
benefit provided by SSDI can't come close to making up for the loss of
Medicaid.

Medicaid is a very comprehensive health insurance program,
covering everything from psychological care and prescription drugs to hospital
visits and preventative medicine. Some people with serious disabilities would
literally not be able to survive were it not for Medicaid’s coverage of their
extremely expensive care. Eligibility for Medicaid is based both on medical
necessity and a person's income and resources, and if a person is even slightly
over the Medicaid income threshold, he often won't be able to immediately
qualify for benefits. (Many Medicaid beneficiaries are eligible for Medicaid
because they receive SSI benefits, and a loss of SSI due to excess income could
also cause a loss of Medicaid.)

Unfortunately, SSDI benefits are countable income for
Medicaid and SSI purposes, so someone receiving Medicaid who then begins to
receive SSDI could be over income and lose his Medicaid coverage. Because
Medicare benefits don't begin until 24 months from the SSDI eligibility date, a
person who loses Medicaid due to SSDI could be without health insurance for a
substantial period of time.

If you are receiving SSI or Medicaid and are interested in
applying for SSDI, it is vital to review the repercussions with your special
needs attorney in advance of filing an application for SSDI benefits. Not every
person who begins to receive SSDI will lose her Medicaid services, and not
every Medicaid beneficiary relies on Medicaid to the point where the loss of
benefits would be catastrophic, but why take the chance?

 

From Special
Needs Planner

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