Maryland Medicaid Disability Application at 18: ABD Eligibility, Spend-Down, and Asset Limits

The Eligibility Shift at 18

Before a child turns 18, their Medicaid eligibility in Maryland is typically determined under Modified Adjusted Gross Income (MAGI) rules — which count household income but impose no asset test. A child in a family earning under the MAGI threshold qualifies regardless of how much the family has in savings.

At 18, the young adult with a disability shifts to a different eligibility pathway: Aged, Blind, and Disabled (ABD) — also called non-MAGI Medicaid. This pathway has both an income test and a resource test. The rules are stricter, the paperwork is heavier, and the process is less forgiving of errors.

If the young adult is approved for SSI, the Medicaid question is simple: Maryland is a Section 1634 state, so SSI approval automatically triggers Medicaid enrollment. No separate Medicaid application is needed.

But if SSI is denied — or if the individual's income or resources exceed SSI limits — they need to apply for Medicaid through the ABD pathway independently.

ABD Income and Asset Limits in 2026

Countable asset limit: $2,500 for an individual, $3,000 for a couple. This is Maryland's Medically Needy asset limit for ABD applicants. Countable assets include bank accounts, investments, and cash. They do not include the primary residence, one vehicle, household furnishings, or burial funds up to $1,500.

ABLE account balances up to $100,000 are also excluded from this count, which makes opening an ABLE account before the Medicaid application a critical step.

Medically Needy Income Level (MNIL): Maryland's MNIL is $350 per month for an individual and $392 per month for a couple. This is one of the lowest in the country. SSI recipients in Maryland get Medicaid automatically under the Section 1634 agreement and do not go through spend-down. Applicants who are not on SSI and have countable income above $350 use the spend-down process.

Waiver/long-term care income limit: For individuals enrolled in HCBS waivers (like the Community Pathways Waiver), the monthly income limit expands to $2,982 in 2026.

How the Spend-Down Works

Maryland is a spend-down state, not an income-cap state. This distinction is important because it means Maryland does not use Qualified Income Trusts (Miller Trusts) to establish Medicaid eligibility. Instead, applicants with income above the MNIL can qualify by "spending down" their excess income on medical expenses.

The spend-down works like a deductible. If the applicant's countable monthly income is $1,000 and the MNIL is $350, the excess is $650. The applicant must incur $650 in medical expenses each month — doctor visits, prescriptions, therapy copays, health insurance premiums — before Medicaid kicks in for the remainder of that month.

Once the spend-down is met, Medicaid covers medical costs for the rest of the month. The cycle resets at the beginning of the next month.

For many young adults with disabilities, the spend-down is met quickly because their medical costs — behavioral health services, psychiatric medications, therapy sessions — regularly exceed the deductible amount. But families need to track and submit those medical expenses monthly to maintain active coverage.

The Employed Individuals with Disabilities (EID) Program

If the young adult works, Maryland's EID program offers a Medicaid buy-in with significantly more generous rules:

• No upper income limit — the premium scales with income on a sliding basis
• Asset limit of $10,000 (individual) — far higher than the standard $2,500
• Retirement accounts are excluded from the resource count
• Spousal assets are excluded unless jointly held

EID is designed to let working adults with disabilities maintain Medicaid coverage without the financial trap of losing benefits the moment they earn above the standard thresholds. The program charges a monthly premium that increases with income, but even at higher income levels the premium is modest compared to private health insurance.

To qualify for EID, the applicant must have a disability (as determined by SSA criteria or equivalent state assessment), be employed, and be a Maryland resident.

How to Apply

The application is filed through the myDHR portal (mydhrbenefits.dhr.state.md.us) or at the local Department of Social Services office. The applicant needs:

• Proof of identity and Maryland residency
• Documentation of the disability (SSA determination letter, physician certification, or clinical records)
• Income verification (pay stubs, SSI/SSDI award letters, bank statements)
• Asset documentation (bank accounts, investment statements)
• Medical expense records (for the spend-down calculation)

If the applicant is simultaneously applying for SSI, it's often more efficient to let the SSI application proceed first. An SSI approval eliminates the need for a separate Medicaid application entirely. But if SSI is denied or delayed, filing the ABD Medicaid application concurrently prevents a coverage gap.

Avoiding the Coverage Gap

The most dangerous scenario is a gap between losing child Medicaid (under MAGI) and establishing adult Medicaid (under ABD). This gap happens when families assume the transition is automatic. It is not. If the young adult doesn't qualify for SSI and doesn't file a timely ABD application, they can lose Medicaid coverage during the period when they need it most — when they are actively managing multiple agency transitions.

Start the Medicaid planning at least 6 months before the 18th birthday: verify current coverage status, gather documentation, and prepare the ABD application. If SSI is denied, file the ABD application immediately — the same week if possible.

The Maryland SSI at 18 & Adult Disability Benefits Guide maps the Medicaid transition alongside SSI, DDA, and DORS deadlines so families can see exactly when each application needs to be filed.

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