What the 2020 Income Limits Were

In 2020, Medicare and Medicaid did not have a single national income limit that applied to all SSDI recipients. Instead, the rules depended on which program you were enrolled in and what state you lived in. For Medicare, there was no income limit at all—if you received SSDI, you were automatically covered by Medicare after 24 months of benefit receipt, regardless of how much money you earned. For Medicaid, the income limit varied by state because each state sets its own threshold for who can keep coverage while working.

This distinction matters because many SSDI recipients rely on Medicaid to cover costs Medicare does not pay, such as dental, vision, and long-term care. Losing Medicaid while your income rises can create a gap in coverage that is expensive to fill out of pocket.

Key Takeaways

  • Medicare has no income limit for SSDI recipients—you keep it for life once you have received SSDI for 24 months, no matter how much you earn.
  • Medicaid income limits in 2020 ranged from roughly $1,000 to $2,000 per month depending on your state, and some states had no limit at all for SSDI recipients.
  • The Plan to Achieve Self-Support (PASS) program allowed you to set aside income and resources without losing Medicaid, if you had a written work goal.
  • Working under the Impairment Related Work Expenses (IRWE) deduction reduced your countable income for Medicaid purposes in most states.
  • State Medicaid programs used different rules—some counted only earned income, others counted both earned and unearned income, and a few had no income limit for SSDI beneficiaries.

How Medicare Worked for SSDI Recipients in 2020

Once you had been receiving SSDI for 24 consecutive months, you automatically enrolled in Medicare Part A (hospital insurance) and Medicare Part B (medical insurance). This enrollment was automatic—you did not have to do anything. The month you turned 65, your SSDI benefits converted to retirement benefits, but your Medicare coverage continued without interruption.

The critical point: Medicare imposed no income limit. You could earn $50,000 a year, $100,000 a year, or more, and you would keep both your Medicare coverage and your SSDI benefits (as long as you did not exceed the Substantial Gainful Activity (SGA) limit, which was $1,260 per month in 2020 for non-blind beneficiaries). Medicare did not care how much money you had or earned.

However, Medicare did not cover everything. It typically did not cover dental work, eyeglasses, hearing aids, or long-term custodial care. Many SSDI recipients in 2020 kept Medicaid specifically to fill these gaps, which is why the Medicaid income limit mattered more in practice.

Medicaid Income Limits by State in 2020

Medicaid income limits for SSDI recipients in 2020 fell into three broad categories, depending on how your state's program was structured.

States using the "1634 option" (named after a federal regulation) set their Medicaid limit at 100% of the federal poverty level. In 2020, this was approximately $1,084 per month for a single person. These states included California, New York, and others. If your monthly income exceeded this amount, you would lose Medicaid coverage.

States using the "209(b) option" applied their own income limits, which could be more or less restrictive than the federal poverty level. Some of these states set limits as low as $600 or $700 per month; others set them at $1,500 or higher. Examples included Florida, Georgia, and Texas. You had to know your specific state's rule.

States with no income limit for SSDI recipients allowed you to keep Medicaid regardless of earnings, as long as you remained disabled and on the SSDI rolls. These states were fewer in number but included some large ones. In these places, income was straightforward not a factor in Medicaid retention.

The only way to know your state's exact 2020 limit was to contact your state Medicaid agency directly or ask your SSDI work incentives counselor, because the rules did not appear in a single national table.

Work Incentives That Protected Your Medicaid in 2020

If your income was rising and you were at risk of losing Medicaid, two work incentives could help you stay covered while you worked.

The Plan to Achieve Self-Support (PASS) allowed you to set aside income and resources toward a specific work goal—such as starting a business, getting a degree, or buying equipment—without that money counting against your Medicaid limit. You had to have a written PASS agreement approved by Social Security before the month in which you started setting money aside. Once approved, the set-aside income did not count toward your Medicaid income limit. For example, if your state's limit was $1,084 and you earned $1,500 but had a PASS that set aside $500 toward a business, your countable income would be $1,000, keeping you under the limit.

The Impairment Related Work Expenses (IRWE) deduction allowed you to subtract the cost of items or services you needed because of your disability in order to work. In 2020, common IRWEs included attendant care, transportation, medical devices, and medications. If you claimed an IRWE, that expense was subtracted from your gross earned income before your income was checked against the Medicaid limit. For instance, if you earned $1,500 and had $300 in monthly attendant care costs, your countable income would be $1,200. Most states honored IRWE deductions, but the rules varied, so you had to verify with your state Medicaid program.

What Happened If Your Income Exceeded the Limit

If your earned income rose above your state's Medicaid limit and you did not have a PASS or IRWE in place, you would lose Medicaid coverage. This did not happen when ready—you typically had a month or two of notice—but once you lost it, you had to find another way to pay for services Medicaid had covered.

Some SSDI recipients in this situation enrolled in a Medicaid Buy-In program if their state offered one. These programs allowed working people with disabilities to keep Medicaid by paying a monthly premium, which was usually lower than commercial insurance. Not all states had a Buy-In program in 2020, and the rules and premiums varied widely.

Others purchased coverage through the Affordable Care Act (ACA) marketplace or through an employer if they worked enough hours. Because you were already on Medicare, you would be enrolling in a supplemental or secondary plan, not primary coverage.

How Income Was Counted for Medicaid Purposes

Medicaid income counting rules in 2020 were not the same as SSDI income counting rules. For Medicaid, most states counted both earned income (wages from work) and unearned income (such as interest, dividends, or other benefits). However, the first $65 of earned income per month was usually excluded, and then half of the remaining earned income was excluded as well. This meant that if you earned $1,200 a month, Medicaid would count roughly $567 of it, not the full $1,200.

Unearned income, by contrast, was usually counted dollar-for-dollar with no exclusions. If you received $200 a month in interest or rental income, all $200 counted toward your Medicaid income limit.

Your SSDI benefit itself was counted as unearned income for Medicaid purposes in most states. This was important because it meant your SSDI check was already part of your countable income before you added any earnings from work.

Frequently Asked Questions

Did I lose Medicare if my income went over the limit?

No. Medicare has no income limit for SSDI recipients. Once you had received SSDI for 24 months, you kept Medicare for life, regardless of how much you earned or how much money you had. You could not lose Medicare due to income.

What if I lived in a state with no Medicaid income limit?

If your state had no income limit for SSDI recipients, you could keep Medicaid as long as you remained on the SSDI rolls and met your state's other rules, such as resource limits. You could earn as much as you wanted without losing Medicaid coverage. However, you still had to report your earnings to Social Security to make sure you did not exceed the SGA limit and lose your SSDI benefit itself.

Could I use a PASS to protect both SSDI and Medicaid?

Yes. A PASS set aside income for a work goal, which meant that money did not count toward either your SSDI resource limit or your Medicaid income limit. This made a PASS one of the most powerful tools for working SSDI recipients. You had to have the PASS in writing and approved by Social Security before you started setting money aside.

Did my SSDI benefit count as income for Medicaid?

Yes, in most states. Your SSDI check was counted as unearned income for Medicaid purposes, which meant it counted dollar-for-dollar toward your state's income limit. This was why the income limit mattered—it was not just your work earnings that counted, but your benefit plus your earnings combined.

What happened to these rules after 2020?

The basic structure remained the same after 2020, but dollar amounts changed each year. Medicare income limits stayed at zero (no limit). Medicaid income limits adjusted annually for inflation. If you need the current 2024 or 2025 limits, contact your state Medicaid agency or your local Social Security office, because the numbers change every January.