SSDI vs. SSI, Medicare vs. Medicaid:
Which is Which? What's the Difference?

by: Tom McCormack

The Social Security Administration (SSA) runs two separate income programs for disabled people - Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). SSA also determines eligibility for the federal Medicare program for disabled and aged Social Security recipients, and tells states and localities who is on SSI so that they can be given Medicaid cards. States and localities determine Medicaid eligibility for everyone who is not on SSI, and run the rest of their Medicaid programs with federal financial help.

SSDI: Social Security Disability Insurance is an insurance program that sends out monthly checks to disabled workers who have paid Social Security taxes (called "FICA" on your paycheck stubs). You must have worked for at least 5 of the past 10 years before you apply to be "currently insured", or covered, but the minimum time is less if you're under age 31 when you become disabled. The amount you get depends upon how much you have paid in taxes and for how long, since SSDI is an insurance - not a welfare - program. In general, the higher your earnings have been and the longer you have earned them, the higher your SSDI check will be. Benefit amounts vary from a low of about $200 monthly to a high of about $1,600; the average SSDI check is about $850, but this average does reflect low wages paid in the South, in rural areas, and in small towns. Big city workers who've enjoyed big city paychecks do better. If you have minor children, whether or not you live with them, they can also get smaller "auxiliary" checks to support them when you become disabled, and so can their other parent if he or she stays home to take care of them while they're under age 16. The children's and other parent's checks will continue, and even increase, after your death, when the checks are renamed "survivors' benefits." SSDI checks start at the end of the fifth month after the "date of onset," the day you became "disabled" under the Social Security rules by meeting the medical rules as well as not engaging in substantial gainful activity ("SGA"; see main text above).

Medicare - the very same health plan that retired people over 65 enjoy - can be obtained after receiving SSDI for 24 months, afetr experiencing permanent kidney failure for 3 months and, if you have ALS (LOu Gehrig's diease) just as sooin as your SSDI starts. Medicare has two parts: Part A, which you pay for through your payroll taxes, and which covers overnight hospital bills, hospices, home health care and very limited, partial nursing home care; and Part B, three-fourths of which is paid for by federal income tax, and one-fourth ($54.00 a month in 2002, deducted from your SSDI check) by you. It pays for doctor, ambulance, emergency room, clinic and most other outpatient care (except drugs and nutritional products). Medicare has an inpatient hospital Part A deductible of $812 in 2002 for most admissions, and a $100 yearly Part B deductible. It then pays 80% (or 50% for psychiatrist care) of its "allowable" fee schedule.

SSI: Supplemental Security Income is a welfare program for disabled people who meet the Social Security medical and SGA disability rules and whose income and assets are below the eligibility levels. SSI allows assets of $2,000 liquid; a separate bank account of up to $1,500 for "burial"; a vehicle of any value, if used to go to medical care; household furnishings; certain self-employment business equity and equipment; and a lived-in home of any value. The SSI income level in 2002 is $545 per month (but it's higher in most wealthy industrial states, which supplement this amount). All gross income counts against this level: SSDI, earnings, pensions, gifts, contributions, bank interest, dividends, veterans' benefits, etc. If your SSDI check is below the SSI level, you can get SSI as well as SSDI. Before comparing gross income to this level, SSI disregards (i.e., doesn't count) $20 per month of any income, out-of-pocket Impairment Related Working Expenses (IRWEs: medical costs you pay to enable you to work) and $65 and half the rest of any earnings. If the resulting countable income is above the SSI income level (again, $545 in most---but not all-- states), you're not eligible. If it's computed to be less, you get an SSI check for the difference between your countable income and the SSI level - and, as a "fringe" benefit in most but not all states, a Medicaid card.

Medicaid is run by the state and local governments. It completely covers hospitalization, clinic visits, emergency room visits, doctors' visits, hospices, home health care, nursing home stays, ambulance and outpatient prescription drugs. Medicaid has very small co-payments for prescriptions, doctor visits and some other care. While all hospitals and almost all drug stores accept Medicaid, most doctors don't, and many home health agencies, nursing homes, and hospices are also reluctant to accept Medicaid. People on SSI are eligible for Medicaid, and in most but not all of the states in the nation, SSI sends lists of recipients to the local government, which then automatically sends Medicaid cards out to them. But in some states, you must always apply separately for Medicaid at the welfare office, even if you're on SSI.

It's possible - indeed, sometimes it's absolutely necessary - to be on both Medicare and Medicaid. In that case, Medicare first pays medical bills up to whatever its rules allow, then Medicaid pays the rest. Always get Medicaid, if you can, to supplement Medicare, because with it, you'll have a way to pay deductibles and co-payments that you would otherwise face without it. Moreover, Medicaid pays for some things Medicare doesn't cover at all - most notably, drugs. Conversely, always get and keep Medicare (including Part B) even if you are already on Medicaid. Medicare pays doctors and hospitals more than Medicaid does, and therefore will make them more likely to accept you as a patient and devote adequate time to your case. Don't be afraid of the Part B monthly premium, either. Once you're on Medicaid, it will start paying the Medicare premium for you, and your SSDI check will go up by $54.00.

Little-known programs can mean an extra $54.00 monthly in Social Security checks and extra medical benefits for disabled and elderly persons who are on Medicare but are not also on SSI or Medicaid already.

Those with Social Security and other income under $1,016* monthly will see the Medicare Part B premium ($54.00 in 2002) that's now being deducted restored to their checks once the Specified Low Income Medicare Beneficiary (SLIMB) and Qualified Individual (I) [QI (I)] programs begin paying it for them.

Those with Social Security and other income under $758* per month will not only have the $54.00 restored to their Social Security checks too - the Qualified Medicare Beneficiary (QMB) program will also pay the hospital admission deductible ($812 in 2002), the $100 annual doctor bill deductible, the 20% of doctor and outpatient bills that Medicare doesn't cover, any Part A premium that may be due any Medicare HMO copayments and (at state option) even any extra premiums charged by Medicare HMOs.

Both SLIMB/QI (I) and QMB are run by state Medicaid programs through local welfare offices - not Social Security offices - even though they involve federal Medicare benefits. To be eligible for both SLIMB/QI (I) and QMB, one can have assets up to $4,000, an automobile and a lived-in home of any value. An additional $1,500 in savings is permitted if it's kept separately from other money and the applicant plans to use it for burial. (A few states have even more liberal asset rules and/or exempt counting certain income.)

Applications are taken at local welfare offices - not at Social Security branches. Those applying should bring birth, marriage, divorce, separation and child support/custody papers; citizenship or immigration forms; bank account and other financial asset records; deeds, mortgages, leases and utility bills; auto registrations; and driver's licenses or other picture ID cards. Above all, applicants need to show their Medicare cards and the latest letter from Social Security stating what their benefit total is. (Call 800-722-1213 for a copy.)

In computing eligibility, it's the total Social Security amount that counts against the $1,016 and $758 income levels. The checks only show the net amount - after the $54.00 Medicare premium has been deducted. So, in computing total income, one must add the $54.00 Medicare Part B deduction back onto the net check amount.

Social Security Disability Insurance (SSDI) beneficiaries can keep their Medicare even if they return to work - and they should do so, even if they secure employer health coverage. (When you have a serious illness, two health insurances in force beat only one, and, besides, Medicare covers some things private coverage doesn't, and it won't lapse, like an employer plan will, if you are laid off or become too sick to work again.) Medicare coverage is available - for a lifetime, even after returning to work - as long as one continues to have the condition which originally qualified one for SSDI.

For those who are working, QMB and SLIMB/QI(I) disregard*(that is, don't count) $65 and half the rest of gross earnings per month, and out-of-pocket medical expenses you pay yourself, before comparing your net, countable income to their eligibility levels. This means that someone who has given up SSDI to resume work can have gross monthly earnings of $2078-- or more, depending on paid medical expenses--and still get SLIMB/QI(I) to pay his $54.00 premium. And to get QMB to pay the premium and also deductibles, co-payments and any Part A premiums that might later come due, total monthly wages must be below $1,561-- or more, depending on medical costs. Income levels are higher where there are additional family members.

And, after 99 months back at work, Medicare Part A starts charging a premium too (in 2002, either $175 or $319 monthly, depending on how long you paid FICA payroll taxes before you became disabled). But those with gross monthly earnings under $3,037 * (or more depending on medical costs) can have the welfare office's Qualified Disabled Working Individual (QDWI) program pay their Part A premiums.(In this case, first visit the Social Security office; tell the staff you are a disabled person back at work whose premium-free Part A is expiring and that you wish to complete an "Application for Hospital Insurance" under Section 1818A of the Social Security Act; then go to welfare to apply for QWDI if your earnings are low enough.)

In addition, recent laws now allow more than half the states to give Medicaid to employed disabled persons using income levels far, far higher than used for disabled persons who are not working; check with the welfare office.

* Income levels for these programs are higher in Alaska and Hawaii. For Alaska, QMB is $923; SLIMB/QI(I) is $1246; and QWDI is $1846; for Hawaii, QMB is $850; SLIMB/QI(I) is $1148; and QWDI is $1700; for those with no earnings, subtract $20 from gross before comparing net income to the eligibility level; for those working , subtract $85 and half the rest of gross earnings, plus paid medical expenses, before comparing net income to the eligibility level. Connecticut also disregards (doesn't count) $183 monthly per person, thus making its income eligibility levels for these programs $183 higher per month per person. The income levels quoted are based on the year 2002 poverty level figures; they're updated each February at