Nancy E Kline

Previously, as a condition of receiving Medicaid, Applicants had been required to take all necessary actions to obtain other benefits to which they were entitled. GIS 25 MA/15, dated 12/23/2025, advises us that this rule has been eliminated.

Social Security Benefits: A Medicaid Applicant/Recipient is no longer required to apply for Social Security Retirement benefits, Social Security Survivor benefits, or Social Security Disability benefits. The GIS refers to these as “RSDI.”

Unemployment Benefits: A Medicaid Applicant/Recipient is no longer required to apply for Unemployment Insurance Benefits.

Veterans’ Benefits: A Medicaid Applicant/Recipient is no longer required to apply for veterans’ benefits. However, if someone is identified as a veteran, the local social service district is still responsible for advising the person that the State Division of Veteran’s Administration and local veterans’ service agencies can provide assistance and benefits to veterans under State and Federal law. Furthermore, if a veteran or the widow of a deceased veteran is institutionalized, the local social service district must still refer the person to the federal Veterans’ Administration for determination of whether the person is eligible for a $90 reduced (limited) pension benefit; this benefit continues to be subject to an income disregard.

Retirement Funds: A Medicaid Applicant/Recipient who is eligible to receive periodic payments from a retirement fund is no longer required to apply for the maximum periodic payment amount as a condition of Medicaid eligibility. Furthermore, failure to receive the maximum payment amount is no longer subject to treatment as an uncompensated transfer of assets. The GIS describes retirement funds as, “annuities or work-related plans for providing income when employment ends (e.g. pension, disability or other retirement plans administered by an employer or union). Other examples are funds held in an individual retirement account (IRA) and plans for self-employed individuals, sometimes referred to as Keogh plans.”

The GIS advises us that treatment of retirement funds for income or resource counting rules must be determined based on whether or not the retirement fund is in payout status. A retirement fund is in payout status when the person is receiving regularly scheduled periodic payments.

If a retirement fund is in payout status, it is subject to income rules. The payments are counted as monthly unearned income, regardless of the actual frequency of payments. The principal balance of the retirement fund is not a countable resource.

If a retirement fund is not in payout status, the principal balance of the retirement fund is a countable resource. The countable resource value is the amount that the person can currently withdraw. If there is a penalty for early withdrawal, the value of the resource is the amount available after the penalty deduction. Note that when calculating the value of the retirement fund, ordinary income taxes are not deducted.

If a person reports that there is a change to the periodic payment amount, local social service districts must recalculate income. If a person reports that there is a change to the payout status, local social service districts must change the treatment of the fund (from countable resource to countable income, or from countable income to countable resource). The recalculation is effective as of the month in which the change occurred. If the change is subject to the new eligibility requirement rule, the retroactive redetermination is limited to changes which occurred on or after 06/04/2025.

U.S. Savings Bonds: If a Medicaid Applicant/Recipient owns U.S. Savings Bonds: these bonds increase in value until they are cashed or reach final maturity. The bonds have a minimum retention period which is used for determining whether they are available, and what their value is. In the past, if the Medicaid Applicant/Recipient wanted Medicaid coverage for long-term care services, they were required to ask the U.S. Treasury to waive the minimum retention period. They are no longer required to ask the U.S. Treasury for this waiver.

Elective Share: A surviving spouse is no longer required to exercise the right of election against the deceased spouse’s estate, if the couple is not subject to a transfer of assets review.

Medicare: Medicaid Applicants must still apply for Medicare.

Health Insurance: Medicaid Applicants must still apply for available third-party health insurance. The rule regarding Medicaid payment of cost-effective health insurance premiums has not changed.

Posted 01/02/2026