Does Retirement Income Count for Medi-Cal Eligibility?

Retirement income can affect your eligibility for Medi-Cal, California’s Medicaid program. However, not all retirement income is counted the same. Here is a detailed look at how different types of retirement income are treated when determining eligibility for various Medi-Cal programs.

Overview of Medi-Cal

Medi-Cal provides free or low-cost health coverage to low-income California residents. There are several ways to qualify:

• Income-based Medi-Cal – For adults 19-64, income must be below 138% of the Federal Poverty Level (FPL). For children under 19, income must be below 266% FPL. There is no asset limit.

• Aged and Disabled Federal Poverty Level (A&D FPL) Medi-Cal – For seniors and people with disabilities. Income must be below 100% FPL and assets below $2,000 (individual) or $3,000 (couple).

• SSI-Linked Medi-Cal – For SSI recipients. Income and assets must meet SSI limits.

• Working Disabled Program – For working disabled adults. Countable income must be below 250% FPL. No asset limit.

• Aged, Blind and Disabled – Medically Needy (ABD-MN) Medi-Cal – For seniors and people with disabilities. Share of cost based on income over 100% FPL. No asset limit.

How Retirement Income Is Counted

Not all retirement income is counted the same when determining eligibility for Medi-Cal programs:

Social Security Retirement Benefits

• Income-based Medi-Cal – Fully counted as income

• A&D FPL Medi-Cal – Fully counted as unearned income

• SSI-Linked Medi-Cal – Fully counted as unearned income

• Working Disabled Program – Fully counted as unearned income

• ABD-MN Medi-Cal – Fully counted as unearned income

Pensions

• Income-based Medi-Cal – Fully counted as income

• A&D FPL Medi-Cal – Fully counted as unearned income

• SSI-Linked Medi-Cal – Fully counted as unearned income

• Working Disabled Program – Fully counted as unearned income

• ABD-MN Medi-Cal – Fully counted as unearned income

401(k)/403(b) Withdrawals

• Income-based Medi-Cal – Fully counted as income

• A&D FPL Medi-Cal – Fully counted as unearned income

• SSI-Linked Medi-Cal – Fully counted as unearned income

• Working Disabled Program – Fully counted as unearned income

• ABD-MN Medi-Cal – Fully counted as unearned income

IRA Withdrawals

• Income-based Medi-Cal – Fully counted as income

• A&D FPL Medi-Cal – Fully counted as unearned income

• SSI-Linked Medi-Cal – Fully counted as unearned income

• Working Disabled Program – Fully counted as unearned income

• ABD-MN Medi-Cal – Fully counted as unearned income

Annuities

• Income-based Medi-Cal – Annuity payments counted as income. Remaining cash value counted as asset.

• A&D FPL Medi-Cal – Annuity payments counted as unearned income. Remaining cash value counted as asset.

• SSI-Linked Medi-Cal – Annuity payments counted as unearned income. Remaining cash value counted as asset.

• Working Disabled Program – Annuity payments counted as unearned income. Remaining cash value counted as asset.

• ABD-MN Medi-Cal – Annuity payments counted as unearned income. Remaining cash value counted as asset.

Exceptions

There are some key exceptions where retirement income is partially excluded or not counted at all:

SSI Income Exclusion

Any income that is excluded for SSI purposes is also excluded for Medi-Cal. This includes:

• Up to $20 per month of any income ($65 for students)
• First $65 per month of earned income and one-half of remaining earned income
• Impairment-related work expenses of disabled individuals
• Income set aside for blind work expenses
• Certain home energy and support assistance

This applies to all Medi-Cal programs.

Retirement Account Contributions

For income-based Medi-Cal only, contributions to 401(k), 403(b), IRAs, and other retirement accounts are excluded from income under the tax rules for determining Modified Adjusted Gross Income (MAGI).

This means that income contributed to retirement accounts is not counted for income-based Medi-Cal eligibility.

Property Essential to Self-Support

For the Working Disabled Program, property essential to self-support is excluded. This can include retirement accounts actively being contributed to.

Conclusion

It’s important to understand how your particular retirement income will be treated under the different Medi-Cal programs. Consulting with a Medi-Cal expert can help ensure you pursue the optimal program given your retirement income sources.