This New Bill Could Stop Medicaid From Taking Your Money

Added: 2026-05-31

[00:00:00]If you are living with a disability right now, you need to pay attention to this because ABLE accounts could get even better under this new bill that has been introduced in the Senate. So, today we're going to be talking about what ABLE accounts are, why they matter, and what the Able Tomorrow Act might do to make them even better than they are right now. And really, this just comes down to how difficult it is for people with disabilities to basically survive right now. We know that statistically if you have a disability, you are 2.5 times more likely to live in poverty than someone who is able-bodied. And that tracks in every state. If you have a disability, you're more likely to be poor than if you don't have it. And that's why this new bill in the Senate means so much. But to understand what the bill does, you first have to know what ABLE accounts are. And I know if you're a regular here on this channel, you've probably heard me talk about this before. We did a live stream just last week with the ABLE NRC team. But if you give me just a minute, I just want to make sure we're all on the same page here. So, ABLE accounts are specialized savings accounts that help people with disabilities save money without losing the benefits that they rely on. So, a lot of benefits programs like SSI, SNAP, Medicaid, all have asset limits. And if you save more than a small amount, usually like $2,000, you could lose your benefits. And that is catastrophic, especially when you're talking about things like healthcare for people with disabilities. So, these ABLE accounts are special. They're tax advantaged.

[00:01:26]They can only be used for certain qualifying disability expenses, which do include things like housing and so on.

[00:01:31]We have another video that goes into that in detail. But basically, if you have one of these accounts, you can save up to $100,000 without losing your benefits. In fact, depending on your state limits, we were told last week in the live stream, you may be able to save up to almost $500,000 without losing those benefits, which is just incredible. So you can see how vital this is for people with disabilities cuz it's really the only way you can save up for something like a car or a security deposit even or any of those life expenses without putting your benefits at risk. ABLE accounts are amazing for that. Now we know that about 14 million people are eligible for ABLE accounts right now. But only a couple hundred thousand of these have been opened. So we really want to get the word out about that which is why we're talking about it so much lately. But today I want to focus on this. The Able Tomorrow act, which is Senate Bill 4498. It was introduced on May 12th. It appears to have bipartisan support. It's currently been referred to the Senate Finance Committee. And this bill could be one of the biggest upgrades to ABLE accounts since the program launched, which is saying something because just in January, we had another massive upgrade to this program. Now, the first big change, and I know you guys are going to love this because we talk about Medicaid recovery all the time, and it's been so hard to deal with. If this bill passes, Medicaid would not be able to claim your ABLE account after you die anymore. If you watched our live stream, we did address how Medicaid recovery and other forms of recovery work with the ABLE program as of right now. But this bill would change that so that states would not be allowed to recover from your ABLE account for those Medicaid costs, which means that that savings would be more likely to be passed on to your family or your heirs. Now, another big change is that they would make it so that the contributions were more flexible, including those light lump sums. So, one of the big barriers with ABLE accounts right now is you have that annual contribution limit, right? Where you can only contribute up to a certain amount.

[00:03:25]And if you and your friends and your family put in more than that, then you kind of have to wait till the next year to put more in. And that's really a pain. But under this bill, large proceeds from a life insurance contract could be deposited without hitting that annual limit. Third-party trusts could qualify for contribution limit exceptions. And any amounts rolled over from a qualified tuition program like a 529 plan would also be exempt from those caps, which obviously gives you a lot more opportunities to be able to put money into your ABLE account. And if you're currently employed, there are other cap modifiers there as well that Lori and Jod explained to us really well in that live stream last week. So, I would encourage you to go check that out um if you have more questions about how that works. Now, another big change here is that there would be a two-month warning before benefits are suspended.

[00:04:12]So, we know that like as of right now, you can have $100,000 in that ABLE account and it will not affect your SSI, but if you get a dollar more than that, it could trigger a benefit suspension, right? Well, this new bill would make it so they have to give you a two months heads up before they just cut those benefits. So, that would give you a little bit more time, possibly give you an option for a spend down, although I'm not 100% sure on that. But basically, it would mean that you don't have to worry about that quick cold benefits cliff that some people could potentially face right now. Another big change that the ABLE tomorrow act would bring is that your employer would be able to contribute to your ABLE account. So, they could redirect your retirement plan contributions into ABLE. They could offer matching contributions like they do for a 401k and that plans that offer this option would not be penalized or lose their qualified status as a result of making this adjustment. So, that's a good option for those of you who are employed. Now, another big change that I think is probably really important is that the government would have to tell you that AEL even exists. In our survey, I think I may have already mentioned this, 65% of people said they had never heard about AEL before at all. And that is a big problem because this is a huge relief and a huge help to people with disabilities. So, if this new bill passes, then 180 days after its enactment, agencies that serve people with disabilities could be required to inform people about ABLE accounts as an option. And this would include the Social Security Administration, HUD, Medicaid, Medicare, SNAP, Wick, and other programs that are serving people who could potentially benefit from these kinds of accounts. I can't imagine how different it would be if people heard about these programs at the point of enrollment. That's honestly one of the reasons why low-inccome relief exists in the first place is because there are so many benefits and programs and loopholes and nuances that you just don't get told when you sign up for these programs.

[00:06:03]They just give you the card and send you on your way cuz the case workers are so busy. But there's so much more to it that people miss. And that's why we're here is to help you guys figure out how to navigate that whole bureaucratic mess basically. Also, veterans could have to be notified, too, which obviously if you're a disabled veteran, you probably likely meet the qualifications for ABLE as well. I can't say for sure, but it's definitely something you'd want to look into. And then if it was advertised in Head Start in schools providing special education services, that would help reach more parents of kids with disabilities. There's 14 million people out there that are supposed to be eligible for this right now, and most people don't know it exists. So, that awareness could make a big difference.

[00:06:40]So, now let's talk about what you can do right now to make this bill a reality.

[00:06:44]First, go check your eligibility. See if you're eligible for an ABLE account because, like I said, these can be life-changing. You just need to go to abelnrc.org.

[00:06:52]That's the website for the amazing team that was here with us live last week.

[00:06:56]And you can open an account in under about 15 minutes. And if you want to see the Able Tomorrow Act become a thing, then you need to contact your senators and ask them to support the Able Tomorrow Act and urge them to help move that forward so that it can become a reality for all of those who rely on these. And then of course share this information, right? Don't wait for the government to enact an awareness campaign. You can share this video right now. You can share our live stream from last week. We've done other videos on AEL. In fact, we'll put a playlist together for you that you can share if you would like so that we can get this information out to as many people as possible. I personally know so many people that could benefit from this and I'm trying to tell everyone about it just cuz it can make such a big difference. So, thank you for being here. Thank you for watching. Go check out that live stream we did last week.

[00:07:41]And I'll be back soon with more ways that you can save money and get free stuff.