SSDI counts as income for the Affordable Care Act, which means it raises the income level used to calculate your insurance costs and subsidies

When you receive Social Security Disability Insurance (SSDI), that money counts toward your total household income for Affordable Care Act (ACA) purposes. The ACA uses your income to decide whether you pay full price for health insurance, receive a tax credit that lowers your monthly premium, or may have access to for cost-sharing reductions that lower your deductible and copays. Because SSDI is counted as income, receiving it can change how much you pay for coverage.

The amount of the subsidy or tax credit you receive depends on your income compared to the federal poverty level for your household size. The higher your income, the less subsidy you receive. If your SSDI payment pushes your income above certain thresholds, you may lose may be able to access for subsidies altogether, or your subsidy may shrink significantly. This matters because the difference between a subsidized plan and an unsubsidized one can be hundreds of dollars per month.

Key Takeaways

  • SSDI payments are counted as income when you explore for ACA coverage or report changes to your existing plan.
  • Your SSDI amount affects the size of any tax credit or subsidy you receive, because the ACA compares your income to the federal poverty level.
  • If your SSDI income is very low, you may may have access to for Medicaid instead of ACA coverage, depending on your state.
  • You must report your SSDI income when you enroll in an ACA plan, and you should update it if your SSDI amount changes.
  • Some people with SSDI income below certain thresholds receive no ACA subsidy but still pay less than the full premium because of how the ACA calculates costs.

How the ACA calculates your subsidy using SSDI income

The ACA subsidy is based on your Modified Adjusted Gross Income (MAGI), which for most people is close to your regular income. SSDI payments are included in this calculation. The ACA then compares your MAGI to the federal poverty level for your household size and looks at what percentage of the poverty level your income represents.

If your income is between 100 and 400 percent of the federal poverty level, you may receive a tax credit. The lower your income relative to the poverty level, the larger your credit. For example, if you are a single person and your SSDI income is $1,500 per month, that annual income of $18,000 might be around 150 percent of the poverty level (the exact percentage changes each year). At that income level, you would receive a substantial tax credit. If your SSDI were $2,500 per month ($30,000 annually), your percentage of poverty would be higher, and your credit would be smaller.

The federal poverty level changes every year, and so do the income thresholds for subsidies. You can check the current year's poverty guidelines on the U.S. Department of Health and Human Services website, or use the income calculator on Healthcare.gov to see roughly what your subsidy might be.

SSDI income and Medicaid may be able to access

In some states, people with very low SSDI income may may have access to for Medicaid instead of needing an ACA plan. Medicaid has its own income limits, which vary by state. In states that expanded Medicaid, the income limit is often around 138 percent of the federal poverty level. In states that did not expand, the limit may be much lower or tied to specific categories like disability.

If you receive SSDI, you are already in a category that some states recognize for Medicaid. However, your SSDI income amount still matters. If your SSDI is low enough to fall below your state's Medicaid income limit, you may be covered by Medicaid automatically or after a straightforward process. If your SSDI is above the limit, you would need to shop for ACA coverage instead.

The advantage of Medicaid over an ACA plan is that Medicaid typically has no premiums and very low or no copays. The disadvantage is that Medicaid is only available in your state, and not all doctors accept it. Before you enroll in an ACA plan, check whether your state offers Medicaid and whether your SSDI income qualifies you. You can call your state Medicaid office or use the Medicaid.gov website to find out.

Reporting SSDI income when you enroll in an ACA plan

When you create an account on Healthcare.gov or your state's ACA marketplace, you will be asked to report your household income. You must include your SSDI in that number. You can report it as a monthly amount or an annual amount—the marketplace will convert it either way. If you are unsure of your exact amount, use your most recent Social Security statement or the amount shown on your monthly deposit.

The marketplace will ask whether your income is expected to change during the year. If you know your SSDI will increase or decrease—for example, because you are appealing a decision or because you will reach full retirement age—you can tell the marketplace that. If your income changes after you enroll, you have 30 days to report the change. Reporting changes promptly keeps your subsidy accurate and prevents you from owing money back at tax time.

You do not need to provide proof of your SSDI income when you enroll, but the marketplace may verify it later by checking Social Security records. If there is a mismatch between what you reported and what Social Security has on file, the marketplace will contact you to resolve it.

What happens if your SSDI changes during the year

If your SSDI payment increases or decreases, your ACA subsidy will change too. You have 30 days from the date of the change to report it to the marketplace. If you report it within 30 days, your new subsidy takes effect the first day of the following month. If you report it after 30 days, the change may not take effect until the next open enrollment period in the fall.

If your SSDI increases significantly, your subsidy may shrink or disappear. This means your monthly premium will go up. If your SSDI decreases, your subsidy will increase, and your premium will go down. Either way, reporting the change promptly prevents surprises at tax time. When you file your taxes the following year, the IRS will reconcile the subsidies you received with the subsidies you were actually may have access to to based on your final income. If you received too much subsidy, you may owe money back. If you received too little, you may get a refund.

SSDI and other income sources

If you have SSDI and other income—such as part-time work, a pension, or interest from savings—all of it counts toward your ACA income. The marketplace asks for your total household income, not just SSDI. If you are married and your spouse works, your spouse's income counts too, even if you file taxes separately.

Some types of income are excluded from the ACA calculation. For example, Supplemental Security Income (SSI) is not counted as income for ACA purposes, though it is a separate program from SSDI. Tax-exempt interest and certain other forms of income may also be excluded. If you are unsure whether a particular income source counts, you can ask the marketplace directly or contact a navigator or counselor at your local health center.

If you have very little income and are not sure whether you may have access to for Medicaid or an ACA subsidy, the marketplace can help you figure it out. When you start an process on Healthcare.gov, you will be asked questions about your income, and the system will tell you what you may be may have access to to based on your answers.

Frequently Asked Questions

Will my SSDI affect my ACA subsidy?

Yes. Your SSDI is counted as income, and the ACA uses your total income to calculate your subsidy. The higher your SSDI, the smaller your subsidy will be. If your SSDI is very high, you may not receive a subsidy at all and will pay the full premium.

Can I get Medicaid instead of an ACA plan if I receive SSDI?

It depends on your state and your SSDI amount. Some states offer Medicaid to people with disabilities at higher income levels than others. Contact your state Medicaid office or check Medicaid.gov to see whether you may have access to. Medicaid usually has lower costs than ACA plans if you are may be able to access.

What should I do if my SSDI amount changes?

Log into your Healthcare.gov account or your state marketplace and report the change within 30 days. Your new subsidy will take effect the first day of the following month. If you report it late, the change may not take effect until the next open enrollment period.

Do I need to provide proof of my SSDI when I enroll in an ACA plan?

No, you do not need to provide proof when you enroll. The marketplace may verify your income later by checking Social Security records. If there is a mismatch, they will contact you to resolve it.

What if I have SSDI and other income?

Report all of your income to the marketplace, including SSDI, wages, pensions, and any other sources. The ACA subsidy is based on your total household income. If you are married, include your spouse's income too, even if you file taxes separately.