Social Security Recipients Get Biggest Cost-of-Living Raise in Decades – but Medicaid Offices Shouldn’t Count It Yet!

The Social Security Administration announced an 8.7 percent increase for Social Security benefits and Supplemental Security Income (SSI) for 2023. This increase, called the cost-of-living adjustment (COLA), is the highest increase in four decades.  According to the Social Security Administration, the average Social Security benefit will increase by $140 per month. An individual SSI beneficiary will see an increase in their federal benefit rate from $841 to $914 per month. People on SSI in Pennsylvania get an additional State Supplementary Payment. The increased payments will start on December 30, 2022 for SSI beneficiaries and in January for Social Security beneficiaries. Click here for a fact sheet regarding other Social Security changes next year.  

Importantly, federal regulations prohibit Medicaid from counting the Social Security COLAs as income until the last day of the month following the month the yearly Federal Poverty Income Guidelines (FPIGs) are published. This means that if the 2023 FPIGs are issued in January, caseworkers at the County Assistance Office cannot count the COLAs until March for Medicaid eligibility purposes. If the FPIGs are issued in February, the COLAs will not count until April. This is important because Medicaid income limits are tied to the Federal Poverty Level (FPL), and are not adjusted until the FPIGs are published.  Every year, PHLP hears from people whose benefits are inappropriately stopped because caseworkers are counting the COLA increase as income, while using last year’s (lower) income limits. If your benefits are reduced or stopped based on this situation, appeal immediately and contact PHLP's Helpline at 1-800-274-3258 or

Even after the income limits are updated to reflect FPIGs, this year’s large COLA increase may push a few beneficiaries over the income limit for Medicaid. This is because FPIGs use a different formula to adjust for inflation than Social Security, so the FPL may not go up by the same amount as the COLA. For individuals whose only income is SSI, this shouldn’t be an issue. However, it may be a problem for a narrow subset of retirees whose Social Security benefits are very close to the current FPL.

As previously reported, Pennsylvania has continued Medicaid coverage for most individuals during the COVID Public Health Emergency. However, people can have their benefits reduced from from full Medicaid to the Medicare Savings Program (also called Buy-In) if they are eligible.  If Medicaid caseworkers count the COLA too soon, it could result in people being incorrectly moved from full Medicaid to the Buy-In during December, January, or February. If you are aware of someone whose Medicaid was denied, lost, or reduced because their COLA was counted, please have them appeal quickly and contact PHLP’s Helpline at 1-800-274-3258 or