No Medicaid for Jackpot Winners

Washington — On Tuesday, January 12, Rep. Joseph R. Pitts (PA-16) introduced H.R. 4368, legislation that would change how lump sum lottery winnings are treated as income for the purposes of Medicaid eligibility.

“Medicaid is meant to help the poor — not big jackpot winners. This bill, which would save taxpayers $400 million, will make sure that Medicaid funding is targeted to those who need it most.”

Rep. Pitts’ bill would treat lump sum lottery winnings as income:

• Below $60,000 as income in the month received;

• Between $60,000 and $70,000 as income over two months;

• Between $70,000 and $80,000 as income over three months;

• Over $80,000 as income over three months, plus another month for every additional $10,000, up to 120 months.

States are required to use Modified Adjusted Gross Income (MAGI) for determining what income to include or disregard in determining Medicaid eligibility for most non-elderly and non-disabled individuals. Under Medicaid regulations, income received as a lump sum, such as lottery winnings, is counted as income only in the month received. As a result, States are not allowed to disenroll multi-million dollar lottery winners from Medicaid, thus allowing these individuals to keep taxpayer financed Medicaid coverage. This policy would close this loophole by requiring states, for purposes of determining MAGI for Medicaid and CHIP eligibility, to count monetary winnings from lotteries, gambling winnings, or inheritances, of $60,000 or more as if they were obtained over multiple months, even if obtained in a single month. This legislation would save taxpayers $400 million over ten years.

The President’s health law created a uniform federal definition of MAGI (26 USC 36(b)). As a result, states no longer have discretion to remove lottery winners from their Medicaid rolls.

Interested members of the media should contact Steven Stafford with Rep. Pitts’ office,