USDA DFAP Awards and Medicaid
The information below is for the farmers and ranchers who applied for and received a one-time, lump-sum payment/award from the United States Department of Agriculture (USDA) under the USDA Discrimination Financial Assistance Program (DFAP). DFAP was created to address the consequences of prior discrimination by USDA in USDA farm lending. This general information will help people who receive these USDA DFAP awards understand the potential impact of such money on Medicaid coverage.
The USDA Award MAY affect your Medicaid eligibility. EVERYONE’S SITUATION IS DIFFERENT. BE SURE TO CONSULT AN ATTORNEY OR ADVOCATE KNOWLEDGEABLE ABOUT MEDICAID FOR SPECIFIC ADVICE.
What is Medicaid?
Medicaid is a joint federal and state program that helps cover medical costs for some people with limited income and resources. The federal government has general rules that all state Medicaid programs must follow, but each state runs its own program. This means eligibility requirements and benefits can vary from state to state.
How could my USDA DFAP award affect my Medicaid?
Your USDA DFAP award will increase your income and resources the month you receive it. Your Medicaid eligibility is based on having limited income and, for some categories, resources. Depending on the category in which you are eligible for Medicaid, the DFAP award may have a small or large effect on your Medicaid eligibility.
When is my USDA DFAP award considered “income?”
The USDA DFAP award is “income” in the month you receive it. Income is any item an individual receives in cash or in-kind that can be used to meet their need for food or shelter. Medicaid eligibility depends on both earned and unearned income. Earned income includes payment for work. Unearned income is all other income, such as retroactive benefits or a settlement payment. The USDA DFAP award is unearned income the month you receive it. This is unlikely to have any practical effect on you if you are already getting Medicaid.
When is my USDA DFAP award considered a “resource” or “asset?”
A resource, or asset, is something you own, such as a bank account, land, or personal property that could be used or sold to get money for food or shelter. Some categories of Medicaid count your assets on the first moment of the first of the month. If the value of your assets is greater than the maximum allowed in your state, you are not eligible for Medicaid in that category that month. The unspent portion of your USDA DFAP award will count as a resource on the first of the month following the month you receive it.
What are the Medicaid income and asset limits in my state for different Medicaid eligibility categories?
How the USDA DFAP award affects your Medicaid eligibility depends on the category of your Medicaid eligibility.
- If you are eligible for Medicaid and are under age 65, not disabled, and not pregnant, (ARHOME Program) there is no asset limit in these categories, so your Medicaid is not at risk.
- If you are eligible for Medicaid because you are on SSI (Supplemental Security Income), or over age 65, or disabled, the asset limit for SSI and SSI-linked Medicaid is $2000 for 1 person or $3000 if you live with a spouse.
- If you or your spouse are in a nursing home, much higher income limits apply. For the individual receiving nursing home care, the income limit is $2,929 per month. The same $2000 for an individual and $3000 for a couple resource limits apply.
- If you are on Medicare and Medicaid pays ONLY your Medicare premiums, the asset limits are also higher: $9,430 for an individual and $14,130 for a family of two. The level of services under this program depends on your level of income. If your income is under $1004 as an individual or $1362.67 as a couple, then you may be eligible for full Medicaid under this program. If your income is below $1255 as an individual or $1703.33, then you are eligible to receive coverage for you Medicare premiums, deductibles, and copays. If it is under $1694.25 as an individual or $2299.50 as a couple, then you may be able to receive coverage for you Medicare premiums.
Click here for an overview of all Medicaid income and resource limits in Arkansas.
If the USDA DFAP award increases your assets, AND you are receiving Medicaid because you are over age 65, blind, or disabled, AND you do not spend down to the allowable limit, you will become ineligible for Medicaid.
What can I do to avoid or lessen the impact of the USDA DFAP award on my Medicaid?
If you are receiving Medicaid because you are over age 65, blind, or disabled, you can avoid or lessen the impact of the USDA lump sum award by spending the money down on exempt resources in the same month you receive it. Examples of exempt resources include buying a home, a car, household good or personal effects, property essential for supporting yourself, life insurance, a burial plot and burial insurance.
For example, if you use the USDA DFAP payment to pay off a mortgage, pay off credit card or other debt, make home improvements or repairs, purchase a burial plot/plan, or trade in your car for a new one, you can spend down the amount of money necessary to be under the resource limit. DO NOT GIVE THE MONEY AWAY. This could make you ineligible for some Medicaid services for up to five years.
Do I need to report the USDA DFAP payment to Medicaid?
Yes. You should report to Medicaid the amount of the award you receive as soon as you get the money. If you do not report the award to Medicaid, you may experience an interruption in coverage and may have to pay for health care expenses that would have normally been covered.
How do I get information from Medicaid about my benefits?
To reach your state Medicaid agency, you can go to access.arkansas.gov or call 1-855-372-1084. You may also visit your local county office.
How can I find an attorney or advocate to help me understand the impact of the USDA DFAP award on my Medicaid?
Many USDA DFAP payment recipients can request brief legal advice through the Legal Aid of Arkansas at arlegalaid.org or by phone at 870-910-5562. Additional civil legal information may be found at arlawhelp.org
For general questions about your USDA DFAP award, contact the DFAP Call Center at 1-800-721-0970.
