Date: January 25, 2021Attorney: Richard I. Miller

On December 27, 2020, Congress passed the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, an economic relief bill intended to help offset the financial crisis caused by COVID-19. This act includes a round of $600 stimulus checks for a large number of Americans, including many Medicaid recipients and applicants who are concerned about the program’s income and asset limits.

These payments were preceded by similar $600 payments to eligible individuals under the Coronavirus Aid, Relief, and Economic Security Act, passed on March 27, 2020. In addition, the incoming administration and many members of Congress are pushing for a third round of stimulus payments in the amount of $1,400. If this third stimulus bill is also passed, eligible Americans would receive a total of $2,600 between the three payments.

To be eligible for Medicaid, an individual cannot have resources that exceed $2,000. For individuals already on Medicaid, the receipt of the stimulus payment could cause the beneficiary’s assets to go over this threshold. In addition, there is a Medicaid ineligibility period imposed for transfers made within five years of applying for Medicaid as well as gifts made by beneficiaries on Medicaid. This had led to questions as to what can be done with the stimulus payments and the impact on Medicaid eligibility.

The Division of Medical Assistance and Health Services has provided guidance to address this issue. In short, stimulus checks do not count as income or a resource as long as the money is spent or gifted within 12 months of receipt. If the money remains with the recipient for more than a year, it becomes an asset that could affect their eligibility. Based on the State’s position, it is advisable for Medicaid beneficiaries to transfer the stimulus payment out of their names as soon as possible to avoid issues that may impact ongoing eligibility. This includes making a gift to family members.

If you have any questions, please contact Richard Miller.