Understanding Health Insurance Options After Selling a Home on SSI

In the United States, individuals with disabilities can rely on Supplemental Security Income (SSI) to provide financial assistance. However, selling assets like a home can impact healthcare coverage. This blog aims to shed light on health insurance options for disabled individuals after selling their homes.

Special Needs Trusts: A Possible Solution

For individuals like the person in the post, who are concerned about losing SSI benefits, establishing a special needs trust can offer a potential solution. Special needs trusts are legal arrangements that allow individuals with disabilities to maintain eligibility for government benefits while managing assets that would otherwise disqualify them.

How Special Needs Trusts Work

In a special needs trust, assets are placed into a trust that is managed by a trustee. The trustee can be a family member, friend, or financial professional. The trustee oversees the distribution of funds from the trust to the beneficiary, ensuring that they are used to pay for eligible expenses without jeopardizing SSI eligibility.

Benefits of Special Needs Trusts

Protection of SSI Benefits: Assets held in a special needs trust are not considered when determining SSI eligibility. This allows individuals to maintain their healthcare coverage through SSI.
Control Over Finances: While the trustee manages the trust, the beneficiary retains some control over how their funds are spent. They can request distributions for specific purposes that improve their quality of life.

Affordable Care Act (ACA) Marketplace Options

If an individual does not qualify for SSI after selling their home, they may be eligible for health insurance through the ACA Marketplace. The ACA provides subsidies based on income to make health insurance more affordable.

Income Limits for ACA Marketplace

To qualify for ACA subsidies, individuals must meet certain income requirements. In 2024, the income limits are as follows:

Household Size of 1: Up to $51,040
Household Size of 2: Up to $68,960
Household Size of 3: Up to $88,500
Household Size of 4: Up to $109,440

Sources of Income

When applying for ACA Marketplace coverage, individuals must report income from all sources, including:

Wages and salaries
Investment income
Rental income
Interest from bank accounts
Self-employment income

Premiums and Deductibles

Premiums for ACA Marketplace plans vary based on factors such as age, income, and health status. Deductibles also vary and represent the amount the individual must pay out-of-pocket before insurance coverage kicks in.

Conclusion

Selling a home while on SSI can impact healthcare coverage. However, special needs trusts and the ACA Marketplace offer options to maintain or obtain affordable insurance. It’s crucial to consult with a licensed insurance agent or financial planner who specializes in special needs trusts to determine the best course of action.