Playing Powerball means increasing your chances of winning. But you might wonder what happens to your Medicare benefits if you become a Powerball winner.
You might be dreaming of becoming a jackpot-sized Powerball winner. And you’re not alone. Who doesn't dream big about exotic vacations, new cars, and lavish lifestyles that come with a multi-million-dollar Powerball jackpot? But if you’re also receiving Medicare, Social Security benefits, or Medicaid, you might still be wondering about what happens to those payments and benefits should you win Powerball. Don’t rely on the rumors and myths out there about potentially losing your Medicare benefits. Keep reading as we dig into how becoming a Powerball-winning millionaire can and can’t impact your federal and state benefits programs.
Dispelling the Myths About Medicare and Powerball
Let’s dispel the Medicare myths first. If you win a Powerball prize, even a jackpot, you won’t lose Medicare benefits or eligibility. There are no income limits to worry about, and there is no requirement for participants to pay back any of those Medicare payments after a monetary windfall. Depending on your specific scenario, you may still continue to earn money while on Medicare. And Powerball winners shouldn’t worry about losing benefits - no matter how much they win.
Monthly Premiums Might Change
You will have a two-year window before Medicare (Part B) charges and premiums might change after you’ve become a multi-million dollar Powerball winner. The standard monthly premium, which is usually around $165 for most beneficiaries, could be modified to reflect your new “adjusted gross income” according to our post-Powerball-winning tax filings. So, if you become a Powerball jackpot winner in 2023, you can probably expect an Income-Related Monthly Adjusted Amount (IRMAA) in 2025. And you can check with Medicare to learn how they apply and categorize your assets (based on how much you win) and calculate your new premiums accordingly.
Medicaid Eligibility Is Different
Medicaid beneficiaries are going to have a different experience. If you’re on Medicaid now and you win a Powerball jackpot, you’re more likely going to forfeit your eligibility. These parameters vary by state, so explore what regulations are in place for yours to know precisely what the guidelines state. However, most states do impose an income and asset limit to qualify for Medicaid benefits.
Any significant boost to your net worth from a Powerball win might impact your eligibility. If you choose to take the lump-sum payment of your win, your ineligibility might only be temporary. And any winnings below $80,000 typically only count as “income” for the month they were received. To know for sure what your state’s Medicaid policies are, check online or with your Medicaid contact with questions. Chances are, however, if you win a Powerball jackpot - you might not be too concerned about your Medicaid covered anymore.
What About Other Benefits When You Win Big?
In general, most states don’t count lottery winnings or gambling windfalls as “earned income.” And unemployment benefits are usually based on earned income. So, in many cases, winning a Powerball prize won’t necessarily impact your ability to collect unemployment benefits.
If you’re on Social Security Disability Income (SSDI,) Powerball prizes won’t affect those either. However, you can anticipate a reduction or elimination of Supplemental Security Income (SSI.)
Some US states have regulations in place regarding public assistance programs, including welfare or food stamps and winning lottery-type prizes. You will more than likely be removed from those programs with a substantial Powerball win.
It’s always best to check with your program provider directly, especially at the state level, to better understand what requirements and eligibility stipulations apply for Powerball winning. But overall, don’t stress about playing and winning. And if you have a significant windfall of the multi-million-dollar variety, you might not care about having those other benefits anyway.