A Lumber Mill Offers Year-Round Work After Years of Seasonal Pay. The Next Paycheck Could Push a Worker Over Medicaid’s Income Limit

Take a Pennsylvania lumber worker in his early sixties, whose situation is hypothetical but whom elder law attorneys and benefits counselors would recognize right away. For years the mill worked him hard through building season and sent him home when orders dried up. During those lean periods, Medicaid paid for his doctor visits and prescriptions.

Now the mill is offering year-round hours. That’s the regular paycheck he’s wanted for a decade. It could also push him over Medicaid’s income limit. The Pennsylvania Department of Human Services sets that limit at $22,025 a year for a single adult in 2026. So the reward for more work could be losing his health coverage. Sawdust, meet irony.

Wages Count Even When Savings Don’t

Working-age adults like him qualify for Medicaid under its income-based rules, called modified adjusted gross income, or MAGI. Medicaid.gov, the federal program’s official site, posts implementation guidance saying that no resource test is applied to groups that use MAGI methods. Under those rules, his pickup, his small savings account and his house don’t matter.

Income is what drives the financial test here, and that cuts both ways. His assets never put his coverage at risk, but regular wages can end it.

It also helps to keep the two programs straight, as Medicaid is the need-based program each state runs with federal money. Medicare is federal health insurance tied to age and work history, and he’s still a few years short of it. Until he gets there, either Medicaid or another plan has to cover him.

Pennsylvania’s $22,025 Line for One Person

The Pennsylvania Department of Human Services, which runs the state’s Medicaid program, sets the 2026 annual income limit for a one-person household at $22,025. That’s 138% of the federal poverty income guidelines, and it took effect January 13, 2026.

Seasonal work can keep him eligible during lean months because Medicaid generally looks at the income he expects to receive in the month being evaluated, even though Pennsylvania publishes the limit as an annual figure. Year-round hours change that picture fast. Once his regular monthly pay rises above the equivalent of the $22,025 annual limit, his standard adult Medicaid eligibility can disappear. The Bureau of Labor Statistics (BLS) put median weekly earnings for full-time workers at $1,251 in the second quarter of 2026.

This line only exists because Pennsylvania expanded Medicaid under the Affordable Care Act. States like Texas and Florida never expanded. In such states, a working-age adult without kids often has no income-based path into Medicaid at all. The same job offer would play out very differently there.

A Second Route if He Has a Disability

Taking more work doesn’t automatically mean losing Medicaid. It is known as MAWD. Pennsylvania’s Medical Assistance for Workers with Disabilities program lets employed people keep their coverage while earning well above the standard adult limit.

According to the Department of Human Services, a MAWD applicant must:

• Be at least 16 and younger than 65
• Be employed
• Have a disability that meets Social Security’s standards
• Have countable income below 250% of the federal poverty income guidelines
• Have $10,000 or less in countable resources

Here the earlier rule flips. MAWD does look at savings, though his home and one car don’t count as resources. Decades of mill work can wear down a body. If he has a documented back, joint, hearing or other impairment, it’s worth checking whether it meets Social Security’s disability standard for MAWD.

MAWD charges a monthly premium based on income, usually about 5% of countable income, but it can let him keep Medicaid while collecting the bigger paycheck. Pennsylvania also runs a separate Workers with Job Success pathway inside MAWD, and it has its own eligibility rules.

Run the Numbers Before Turning Down Hours

If he turns down year-round work to stay under $22,025, he’s choosing a smaller income and a layoff every winter. Before making that trade, he can get a fuller picture by:

• Checking his expected new pay against every Medicaid category he might fit, MAWD included
• Comparing that against Marketplace coverage through Pennie, Pennsylvania’s state-run exchange, where people above the Medicaid line can qualify for premium tax credits
• Sitting down with a caseworker at his County Assistance Office, which handles Medicaid eligibility locally
• Reporting the income change right away so it doesn’t turn into a surprise at renewal

The order matters. If he lines up the next source of coverage before his Medicaid ends, he avoids a gap. Waiting for a termination notice can leave him uninsured at the worst possible age to be without coverage.

The income rule may change where his health insurance comes from, but it doesn’t make the better job a bad decision. When he talks to his caseworker, the useful question is which coverage fits the new paycheck. Whether to take the paycheck is a question the mill has already answered for him.

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