How to Save More Money: Understanding the Medicaid Purchase Plan (MAPP) and Independence Accounts

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Wisconsin’s Medicaid Purchase Plan (MAPP) is a vital program for individuals with disabilities who want to work and maintain essential Medicaid benefits. A key challenge for many individuals is the asset limit, which caps the amount of savings you can have before losing Medicaid eligibility. Fortunately, Independence Accounts offer a solution, allowing you to save money that does not count towards the asset limit for MAPP.

Here’s how it works and why it’s an important but underutilized tool for financial stability.

What Is MAPP?

MAPP provides comprehensive Medicaid health benefits for individuals who have a disability and are:

  • 18 or older
  • Working or interested in working
  • Income and asset eligible

Other Medicaid programs typically have low income and asset limits, which can make it difficult for participants to save money and plan for future needs. MAPP provides some flexibility by allowing participants to have higher incomes than other Medicaid programs. Additionally, there is a higher asset limit of $15,000, but once your total resources (like savings accounts) exceed this limit, you risk losing your Medicaid benefits.

How Independence Accounts Can Help You Save

An Independence Account is a unique tool available under MAPP that allows participants to save money and have it excluded from the $15,000 asset limit. These accounts are specifically designated for saving work earnings.

Key Features of Independence Accounts:

  • You can deposit up to 50% of your gross earnings from your job into your Independence Account in a 12-month period without affecting your Medicaid eligibility.
  • There is no cap on the amount of money you can save in an Independence Account over time meaning you can build significant savings for the future.
    • There are no restrictions on what the money in an Independence Account can be used for. The funds can be used for a wide range of purposes, such as purchasing a home, making home modifications, or covering other large expenses.
    • You can withdraw money from the account as you would a normal bank account (retirement accounts are subject to withdrawal restrictions per IRS rules).
  • Once approved, Independence Accounts are excluded assets for all future Medicaid needs.
  • You can have multiple Independence Accounts. For example, you can have one that is a checking account, and another that is a retirement account through your employer. Total deposits into all Independence Accounts cannot exceed 50% of your gross earnings in a 12-month period.

    By using an Independence Account, MAPP participants can gain financial security and flexibility without jeopardizing their Medicaid coverage. It’s an excellent way to work, save, and still maintain access to essential health services.

    How to Set Up an Independence Account

    If you are already enrolled in MAPP, you can follow these steps:

    • Open a new bank or credit union account at a financial institution of your choice.
    • Complete the Medicaid Purchase Plan Independence Account Registration form.
    • Submit the completed form to your local consortium.
    • You can also use a retirement or pension account you already have as an Independence Account. Register this account on its own form. The balance you have when you register the retirement account as an Independence Account is a countable asset. Only contributions made after the account has been approved as an Independence Account are excluded for MAPP.
    • Remember, once established and approved as an Independence Account, the money deposited into the account must be only from your earnings. It’s important to keep records of deposits and to show they do not exceed 50% of your earnings in a 12- month period.

    Additional Resources for Learning About MAPP and Independence Accounts

    To learn more about MAPP and how Independence Accounts can work for you, here are some key resources:

    Take Control of Your Financial Future

    The Medicaid Purchase Plan and the use of Independence Accounts offer a path to greater financial independence for people with disabilities. By working and saving money beyond the usual asset limits, you can gain more control over your future while still maintaining access to the health services you need.

    If you’re interested in learning more about how to take advantage of these programs, connect with a work incentive benefits counselor, explore the resources above, and take the first step toward building financial stability today!