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Why do we need to change the Medicaid law?

Most seniors and people with disabilities in Illinois, even those living well below poverty, cannot access the Illinois Medicaid program. Although many participate in Medicare, Medicare is not comprehensive health insurance. Medicare provides no coverage for even the most essential out-patient prescription drugs. Medicaid could fill in the gaps in health care coverage for low-income seniors and people with disabilities, but current Illinois law covers only the very poorest of the poor – those seniors or disabled who have income of $308 per month or less. Seniors and people with disabilities who receive Social Security retirement or disability benefits of more than $308 per month based on a connection with the workforce can access Medicaid only though a cumbersome Medicaid spend-down program.



Susan Johnson, a widow, receives $600 per month Social Security Retirement benefits. She has less than $2000 in assets, not including her home. When she applies for Medicaid to help her with her high prescription drug costs, a Medicaid budget is prepared. She is allowed $308 ($283 per month plus a $25 income disregard) in living expenses each month. Since her income of $600 is $292 more than $308, she is told she must meet a spend-down of $292 each month before she may receive a Medicaid card.

To prove that she has met her spend-down, and to get a Medicaid card, Susan must bring in medical bills or receipts, for expenses not covered by Medicare and dated within the last six months, totaling more than $292. If she brings in bills totaling $292, she will get a Medicaid card for one month only. She cannot use that Medicaid card to pay those prior bills or to get reimbursed for money she has already spent. To get a Medicaid card for a second month, she must bring in another batch of bills and/or receipts totaling another $292. She must do this each and every month she wants a Medicaid card.

 The result is, as numerous studies show, seniors and people with disabilities all too often must choose between paying for their food or rent and filling the prescriptions their doctors have written.

There are two serious inequalities that must be addressed in the Medicaid eligibility criteria for low-income elderly and people with disabilities:


The present Medicaid system discriminates against people who have worked.

Because of requirements in federal law, SSI income is not counted in determining Medicaid eligibility. Thus while every dollar of Social Security income based on a work history is counted toward a Medicaid eligibility determination, all SSI income is excluded. The stark, simple result is that a senior or disabled person who receives $494 per month in SSI income gets Medicaid without a spend-down, while her neighbor down the street with an identical income from Social Security retirement or disability insurance benefits, must meet a $186 spend-down each month before she can qualify for a Medicaid card.

Fifteen years ago, the Medicaid spend-down threshold was roughly comparable to an SSI grant (both were at approximately 73% of poverty), so the inequality was not obvious. Today, although the SSI figure has risen each year to remain at or about 73% of poverty, the Medicaid eligibility rate is only 42% of poverty. This discrimination against people who have worked is simply unfair.


The Illinois Medicaid program for low-income seniors and people with disabilities has not kept pace with improved Medicaid benefits for other groups.


Number in Family


Max. Income Level

Pregnant Women (200% of FPL) Children (133% of FPL for Medicaid and 133% to 185% of FPL for State Children’s Health Ins. Program) Parents Who Work in Families Receiving TANF Benefits (100% of FPL) Persons Who Are Disabled or Age 65 & Older (between 41% and 45% of FPL)*
1 $1,342 $892/$1,240 $670 $283 (42%)
2 $1,808 $1,203/$1,671 $903 $375 (42%)
3 $2,275 $1,513/$2,102 $1,136 $508 (45%)
4 $2,742 $1,823/$2,534 $1,370 $558 (41%)

 These problems are not unsolvable. Federal Medicaid rules give states the option to expand Medicaid to cover all seniors and people with disabilities living at or below the federal poverty level. To date, only thirteen states have expanded their Medicaid eligibility to include elderly and people with disabilities up to 100% of poverty. (These states are: CA, FL, GA, HI, KY, ME, MA, MO, NE, NV, NH, PA, SC, VT and the District of Columbia.) We believe Illinois should expand eligibility for Medicaid to up to 100% of the federal poverty level ($670/month for 1998), and ensure that low-income seniors and people with disabilities who are eligible for the Aid to the Aged Blind and Disabled (AABD) are receiving those benefits.

For more information please contact: Barbara Otto at the SSI Coalition – 312/223-9600; or Ann Fisher at AIDS Legal Council of Chicago – 312/427-8990.

*SSI income is not counted in determining Medicaid eligibility. However, Social Security Old Age and Disability Insurance benefits (sometimes called Title II benefits) are counted in assessing Medicaid eligibility.

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