The following excerpt is taken from a discussion between elderlaw attorneys recently posted on a listserv (or electronic bulletin board) in New Jersey:

Q. – Is there a law that mandates that a disabled child maintain his/her eligibility for Medicaid when the child loses eligibility for Supplemental Security Income (SSI) benefits as a result of the child’s receipt of Social Security disability (SSD) benefits on a parent’s work record, putting the child over the income limit for SSI?

A. – The Social Security Act, §1642(c), says that a disabled adult child who loses SSI due to obtaining SSD shall continue to qualify for Medicaid as if the child still received SSI. In other words, the excess of SSD over SSI is not Medicaid disqualifying. Social Security Act §1642(c) (42 U.S.C. §1383c(c)) follows:

c) Loss of benefits upon entitlement to child’s insurance benefits based on disability. If any individual who has attained the age of 18 and is receiving benefits under this subchapter on the basis of blindness or a disability which began before he or she attained the age of 22- (1) becomes entitled, on or after the effective date of this subsection [July 1, 1987], to child’s insurance benefits which are payable under section 402 (d) of this title [Social Security Act §202(d), 42 U.S.C.§402(d), Exhibit 4] on the basis of such disability or to an increase in the amount of the child’s insurance benefits which are so payable, and (2) ceases to be eligible for benefits under this subchapter because of such child’s insurance benefits or because of the increase in such child’s insurance benefits, such individual shall be treated for purposes of subchapter XIX of this chapter [Medicaid] as receiving benefits under this subchapter so long as he or she would be eligible for benefits under this subchapter in the absence of such child’s insurance benefits or such increase. [Items in brackets have been added for convenience of the reader and do not appear in the statute.]

There is also a regulation in the Program Operations Manual System (POMS) governing this situation:

POMS §SI 01715.015 Special Groups of Former SSI Recipients

A. BACKGROUND

Categorical Medicaid eligibility for the aged, blind and disabled is directly related to receipt of SSI in most States. Loss of SSI payments can result in loss of Medicaid coverage.

To preserve Medicaid coverage for certain groups of individuals who lose SSI payments, Congress enacted special Medicaid continuation provisions. These provisions require the State Medicaid agencies to continue to consider specified groups of former SSI beneficiaries as SSI beneficiaries for Medicaid purposes, as long as they would otherwise be eligible for SSI payments. In addition, Medicaid agencies are required to determine if the individual would be eligible for Medicaid under any other group.

B. POLICY – CONTINUATION GROUPS
….
4. Disabled Adult Children (Childhood Disability Beneficiaries) Section 1634(c) of the Act requires States to consider Title II childhood disability beneficiaries (also known as disabled adult children, DACs, or childhood disability beneficiaries, CDBs) who lose SSI eligibility as if they were still SSI recipients for Medicaid purposes so long as they would have remained otherwise eligible for SSI benefits but for their entitlement to (or increase in) title II benefits on or after July 1, 1987.