You do not automatically lose Medicaid when you work while receiving SSDI, but your benefits may change depending on how much you earn

The relationship between work and Medicaid under SSDI is not an all-or-nothing rule. You can work and keep Medicaid, but the amount you earn triggers different protections and phase-out rules. The key is understanding which work incentive applies to your situation and what income threshold matters for your state.

SSDI itself has a separate earnings rule called Substantial Gainful Activity (SGA). In 2024, SGA is $1,550 per month for non-blind workers and $2,590 for blind workers. If you earn more than this amount, SSDI cash payments stop. But Medicaid operates on a different income limit, which varies by state and is usually higher than the SGA threshold. This means you can lose SSDI cash payments while keeping Medicaid, or you can work within limits and keep both.

Key Takeaways

  • Medicaid and SSDI have separate income rules, so losing one does not automatically mean losing the other.
  • The Plan to Achieve Self-Support (PASS) and Impairment Related Work Expenses (IRWE) are federal work incentives that let you exclude certain earnings and costs from the income calculation.
  • Your state sets its own Medicaid income limit for SSDI recipients, which is usually higher than the federal SGA threshold for SSDI cash payments.
  • If you lose SSDI cash payments due to work, you may stay on Medicaid for up to 93 months under the Extended Medicaid Coverage rule, depending on your state.
  • You must report all work and earnings to Social Security within 10 days of the month you earn them, or you risk overpayment and benefit suspension.

How SSDI and Medicaid income limits differ

SSDI and Medicaid use two separate income calculations. SSDI counts your gross monthly earnings against the SGA threshold. If you exceed it, your SSDI cash payment stops, but that does not when ready end Medicaid.

Medicaid income limits for SSDI recipients are set by each state and are typically 75% to 100% of the federal poverty level, or sometimes higher under state-specific rules. Some states use a "1619(b)" rule, which allows you to keep Medicaid even after SSDI cash payments end, as long as your income stays below that state's threshold. Other states have different rules. You need to know your state's specific limit, because it determines whether you can work and keep both benefits, or whether you will lose Medicaid at a different income level than SSDI.

Contact your state Medicaid office or your local Social Security office to learn your state's exact Medicaid income limit for SSDI recipients. This number is not the same across all states and changes based on federal poverty guidelines each year.

Work incentives that protect your earnings

Social Security offers two main work incentives that let you exclude certain earnings and expenses from the income calculation, so you can work more without triggering benefit loss.

Plan to Achieve Self-Support (PASS) lets you set aside income and resources for a specific work goal — like paying for job training, a business startup, or transportation to work. Money set aside under a PASS plan does not count toward your income limit. You write a plan with Social Security, stating your goal and how you will use the money. Once approved, that income is excluded from both SSDI and Medicaid calculations. PASS plans typically last two to five years and must be reviewed annually.

Impairment Related Work Expenses (IRWE) are costs you pay to work because of your disability — such as attendant care, medical equipment, transportation, or medications needed to work. You subtract these costs from your gross earnings before Social Security counts your income. Unlike PASS, IRWE does not require a written plan, but you must document the expense and show it is directly related to your ability to work.

Both incentives require you to report them to Social Security and provide documentation. If you think either applies to your situation, ask your local Social Security office for the forms and instructions.

What happens to Medicaid if you lose SSDI cash payments

If your earnings exceed the SGA threshold and Social Security stops your SSDI cash payment, Medicaid does not stop when ready. Federal law allows you to stay on Medicaid for up to 93 months (about 7.75 years) after your SSDI cash payment ends, as long as you remain disabled and your income stays below your state's Medicaid limit. This is called Extended Medicaid Coverage or the "1619(b)" rule.

During this extended period, you can work and earn without losing Medicaid, even though you are not receiving SSDI cash. This is designed to give you time to build work history and income without a sudden loss of health coverage. However, your state must offer this protection — not all states do, and the rules vary. Some states have income limits during the extended period that are lower than the initial limit.

Once the 93-month period ends, or if your income exceeds your state's Medicaid limit, Medicaid ends unless you may have access to for another category of coverage (such as low-income Medicaid for non-disabled adults, if your state offers it). You should plan for this by exploring other health insurance options, such as marketplace plans or employer coverage, before extended Medicaid ends.

Reporting work and earnings to Social Security

You must report all work and earnings to Social Security within 10 days of the end of the month in which you earned the money. This includes wages from a job, self-employment income, and any other earned income. Failure to report on time can result in overpayment, benefit suspension, or both.

You can report earnings by phone, mail, or online through your my Social Security account. When you report, provide the month you earned the money, the gross amount (before taxes), and the name and address of your employer or business. Keep pay stubs or records of self-employment income for at least three years in case Social Security asks for proof.

Social Security uses your reported earnings to recalculate your SSDI payment and determine whether you have exceeded the SGA threshold. If you have, your payment stops, but the reporting itself does not cause Medicaid to end — the income calculation does. Reporting accurately and on time protects you from overpayment and keeps your case in good standing.

State-by-state Medicaid rules for SSDI recipients

Medicaid rules for people receiving SSDI vary significantly by state. Some states are "1619(b) states," meaning they offer extended Medicaid coverage after SSDI cash payments end. Other states use different rules or have lower income limits. A few states have higher limits that allow more work before Medicaid ends.

The only way to know your state's rule is to contact your state Medicaid office directly. You can find your state Medicaid office through Medicaid.gov or by calling your local Social Security office and asking for a referral. Have your Social Security number and current address ready when you call. Ask specifically: (1) what is the current Medicaid income limit for SSDI recipients in your state, (2) does your state offer extended Medicaid coverage after SSDI ends, and (3) how long does extended coverage last.

If you move to a different state, your Medicaid coverage may change. Some states have higher or lower income limits, and extended coverage rules differ. If you are planning to move, contact your new state's Medicaid office before you move to understand how the transition will affect your benefits.

Planning your work strategy with SSDI and Medicaid

Before you start working or increase your work hours, map out how your earnings will affect both SSDI and Medicaid. Start by learning your state's Medicaid income limit and whether extended coverage is available. Then calculate whether your expected earnings will exceed the SGA threshold for SSDI or your state's Medicaid limit.

If your earnings will be close to either limit, explore PASS or IRWE with your local Social Security office. These tools can protect more of your earnings and extend the amount you can work without losing benefits. If you are self-employed or have irregular income, ask Social Security how they will average your earnings over time — this can affect when you cross the SGA threshold.

Keep detailed records of all work, earnings, and work-related expenses. This documentation protects you if Social Security questions your reports and helps you track whether you are approaching an income limit. Review your situation annually, especially if your work hours or income change significantly.

Frequently Asked Questions

Can I work part-time and keep both SSDI and Medicaid?

Yes, if your earnings stay below both the SGA threshold for SSDI ($1,550 per month in 2024 for non-blind workers) and your state's Medicaid income limit. Many people work part-time and keep both benefits. The key is knowing your state's Medicaid limit and reporting all earnings to Social Security on time.

What if I earn more than SGA but less than my state's Medicaid limit?

Your SSDI cash payment stops, but you keep Medicaid under extended coverage (if your state offers it). You can continue working and earning without losing health coverage, as long as your income stays below the Medicaid limit. This extended period lasts up to 93 months in most states.

Do I have to tell Medicaid about my work, or just Social Security?

You report earnings to Social Security, not directly to Medicaid. Social Security shares income information with Medicaid, so reporting to one agency covers both. However, some states require you to report changes to Medicaid separately. Ask your state Medicaid office whether you need to file a separate report.

What happens if I do not report my earnings?

Social Security may discover unreported earnings through tax records or employer reports. If you did not report earnings you should have, you will owe back benefits (an overpayment). Social Security can recover overpayments by reducing future payments or asking you to repay the money. Repeated non-reporting can result in benefit suspension or fraud investigation.

Can I use a PASS plan to work full-time and keep SSDI?

A PASS plan lets you set aside income for a specific work goal, which excludes that income from the SGA calculation. If you set aside enough earnings under a PASS plan, you can work full-time and still receive SSDI cash payments. However, the PASS plan must have a clear goal (like starting a business or completing training) and must be approved by Social Security before it takes effect.