Ohio Medicare Savings Program Income Disregard Rules

Why $20 Changes Everything Near the Income Limit

Ohio's Medicare Savings Programs use published monthly income limits: $1,350 for QMB, $1,616 for SLMB, and $1,816 for QI in 2026 (single). Those limits already include a mandatory $20 general unearned income disregard. If your parent's gross Social Security check is $1,345, their countable income after the disregard is $1,325 — well within QMB range.

The problem is that many families — and occasionally caseworkers — compare gross income directly to the published limits without understanding that the limits are designed with the disregard already factored in. The actual pre-disregard ceiling for QMB is $1,330 single ($1,804 couple). If someone tells your parent they're "over the limit" by $15, the disregard math may prove otherwise.

How the Disregard Sequence Works

Ohio's income counting follows a specific deduction order under OAC 5160:1-3-03.2:

First, a $20 general income disregard is subtracted from gross unearned income. Unearned income includes Social Security retirement or disability benefits, private pensions, civil service annuities, Railroad Retirement, and VA benefits. If unearned income is less than $20, the remaining balance carries over and gets subtracted from earned income.

Second, a $65 earned income disregard is subtracted from gross monthly earned income.

Third, half of the remaining gross earned income is subtracted (the half-remainder disregard).

Fourth, impairment-related work expenses (IRWE) are deducted for disabled applicants under 65.

For most Medicare Savings Program applicants — retirees living on Social Security and possibly a small pension — only the first step matters. Their income is entirely unearned, and the $20 disregard is the only deduction in play.

Income That Doesn't Count at All

Certain income types are excluded from the calculation entirely under Ohio and federal rules:

• VA Aid & Attendance and Housebound allowances — excluded, not counted as income
• VA unreimbursed medical expense payments — excluded
• Irregular or infrequent unearned income of no more than $20 per month — excluded
• Irregular or infrequent earned income of no more than $10 per month — excluded

If your parent receives a VA pension with Aid & Attendance, the A&A portion does not count toward the MSP income limit. This exclusion is frequently overlooked by families who assume all VA payments are income.

The Social Security COLA Shield

Every January, Social Security applies a cost-of-living adjustment that can push a beneficiary's check above the previous year's MSP limit. Ohio protects against this with a quarterly buffer: Social Security COLA increases are disregarded for MSP eligibility from January 1 through March 31. Updated poverty guidelines take effect April 1, when new, higher income limits are published via Medicaid Eligibility Procedure Letter (MEPL).

This means your parent cannot lose MSP coverage in the first quarter of the year just because their Social Security went up. By April, the new income thresholds typically absorb the COLA increase.

When the Caseworker Gets It Wrong

Income disregard miscalculations are one of the most common reasons for improper MSP denials at the county level. Typical errors include comparing gross income to the published limit without applying the $20 disregard, counting VA Aid & Attendance as income, using net pension amounts instead of gross, or failing to apply the earned income deductions for a parent who still works part-time.

If your parent receives a denial letter and the income calculation looks wrong, compare the caseworker's figures against the sequence above. The denial notice is required to show the detailed income and resource calculations under OAC rules. If the $20 disregard is missing or an excluded income source was counted, that's grounds for a state hearing through the ODJFS Bureau of State Hearings within 90 calendar days from the notice's mailing date.

Our Ohio Medicare Savings Programs guide includes a worked income calculation worksheet and a line-by-line breakdown of what counts, what's excluded, and how to catch errors before they cost your parent coverage.

See more Ohio guides →