Special Medicaid Rules

Cost of Living Adjustments (COLA’s) 

COLA's are often a much needed boost to many Social Security and Supplemental Security Income (SSI) beneficiaries who struggle to make ends meet. For a select few, however, it can cause people to lose some of the benefits that a person currently receives due to an increase in income. Often, when a COLA comes out, it can cause a loss of insurance benefits specifically Medicaid. Although there are special rules that protect Medicaid eligibility in this case, they aren’t widely publicized and are often overlooked. With the 2012 adjustment approaching, it’s important for individuals who work with individuals with disabilities to be aware of this rule.

The Pickle Amendment

The Pickle Amendment can often protect Medicaid eligibility for people who were receiving SSI Medicaid and lose SSI cash status due to a Social Security COLA. To be eligible for this protection, the person must:

• Be concurrently eligible for both Social Security and SSI in the same month or eligible for SSI in the month prior to SSDI eligibility after April, 1977.

• Be eligible for Social Security Benefits

• Be ineligible for SSI cash benefits

• Be otherwise eligible for SSI benefits if not for the cost of living increase

If a client appears to meet the criteria outlined above, it’s recommended that they are referred to a CWIC or WISA that is familiar with the pickle formula to ensure correct calculation.

McMahon Medicaid

The McMahon provision states that individuals who have been receiving SSI and Medicaid and lose SSI eligibility due to the entitlement or COLA of Disabled Adult Child (DAC) benefits will be entitled to keep their Medicaid as long as their disability continues.

This article was contributed by Michael Klinger, Work Incentives Specialist for the Virginia Department of Aging and Rehabilitative Services.  For more information or any other benefits related questions, contact Michael Klinger at 434-298-7652 or Michael.klinger@drs.virginia.gov.