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Governor Jennifer M. Granholm today signed legislation that allows persons with disabilities to work and save for retirement without fear of losing their Medicaid coverage.  The new law could benefit approximately 140,000 Michigan residents with disabilities whose current income and assets exceed the eligibility threshold for Medicaid.

“The law I’m signing today finally allows our workers with disabilities to put money into savings and work to their heart’s content,” said Granholm.  “No longer will people have to choose between a dignified working life and the benefits they need and deserve.”

Currently, disabled persons whose annual income exceeds approximately $22,500 lose their health benefits under the state administered Medicaid program.  The bills signed today, Senate Bill 22 and House Bill 4270, will allow individuals to accumulate assets or save for retirement without losing their Medicaid eligibility.

Under the new law, the “Social Welfare Act” is amended to allow Medicaid enrollees with disabilities to earn up to their potential, accumulate assets up to $75,000, and save without limitation for their retirement, IRA, and 401k accounts.  The state will collect premiums on a sliding scale based on annual income for those recipients who earn more than the current cut-off point of $22,500.  The premiums will offset the state’s cost for providing benefits to those who will become eligible under the new law.

“People shouldn’t have to put off retirement planning or a career opportunity for fear of losing their health insurance,” said Granholm.  “The ‘Freedom to Work’ legislation puts this fear to rest and allows people with disabilities to earn a living, keep their benefits, and plan for the future.”