Social Security benefits are not exempt from Medicaid consideration as income. When your sister applies for Medicaid, her state's Medicaid program will look at both her income-- which includes her Social Security benefits -- and her assets, both of which have to be quite low for her to qualify. Also, because she is married, Medicaid will consider the income and assets of your brother-in-law, as well. This means that the total of your sister's Social Security benefits PLUS your brother-in-law's disability benefits will have to fall below the state's eligibility income limit (for a couple) in order for her to qualify for the state's Medicaid program.
Even if your sister and brother-in-law's joint income is too high for them to automatically qualify for Medicaid in her state, though, she might be able to qualify if she has high regular medical expenses that aren't paid by another program or insurance. This is known as being "medically needy," and many states provide Medicaid coverage for people in this situation.
To find out what the Medicaid eligibility rules are in her state, go to the federal government's Benefits.gov Web site and select her state. This will take you to a page with contact information for her state's Medicaid program, as well as information about local offices.