Federal Program Creates Work Incentive — If You're Lucky Enough to Live in the Right State

Denise Weisenborn is an attorney who could be earning $150 an hour. Instead, she relies on Social Security Disability Insurance, and works only 13 hours a month at a much lower rate.

Why? Because she has spinal muscular atrophy, and she needs the Medicaid health coverage that comes with SSDI. And she lives in Ohio where there’s no Medicaid Buy-in option.

To date, 31 states have implemented the Medicaid Buy-in option, which was created by Congress in 1997. It allows states to provide Medicaid coverage to working people with disabilities who, because they earn more than SSDI allows, can’t qualify for Medicaid under other provisions.

“The basic idea is that people with disabilities can keep Medicaid when they are working. There are different criteria from state to state, and the designs are complicated,” said Donna Folkemer, program director at the National Conference of State Legislatures.

The buy-in option allows people with disabilities to earn more money while remaining eligible to obtain Medicaid coverage. Participants “buy in” to the program by paying premiums, and they receive full Medicaid benefits.

The Law, Health Policy & Disability Center reports that for many SSDI and Supplemental Security Income (SSI) recipients, the risk of losing Medicaid or Medicare coverage that’s linked to their cash benefits is one of the greatest disincentives to working.

Medicaid covers 100 percent of health care costs, while many private health insurance plans don’t cover the full cost of equipment and other needs. Also, buying health insurance through a person’s job can be expensive, and part-time employees usually aren’t eligible for this benefit. And, some employers, especially small-business owners, are hesitant to hire people with disabilities because they’re afraid their insurance costs will go up. (This discrimination is illegal for larger employers.)

Slow Growth

Stephen F. Knapp, a senior policy adviser at the Centers for Medicare & Medicaid Services, said that two other states have buy-in plans pending. As of June 2004, nearly 67,000 workers were receiving Medicaid benefits under the buy-in option, according to a CMS report.

“The program has been seen as relatively small, but it has been politically popular because it removes the disincentive to work, provides personal assistant services, and enables people to be more independent and economically self-sufficient,” Knapp said.

Understanding the scope of the Medicaid Buy-in program can be challenging. Each state has a different name for the program, as well as different income and resource guidelines, all subject to federal rules. While not required to collect premiums, several states adjust premiums to income.

Folkemer explained, “Because the states administer it, there is significant variation in Medicaid programs, so if you have seen one Medicaid program, you have seen one Medicaid program.”

Fernando Cruz of Phoenix, a reintegration program coordinator at Arizona Bridge to Independent Living, calls the Medicaid Buy-in “the best thing that has come about for people [with disabilities] who work or want to work.”

Cruz, who has disabilities related to diabetes and arthritis, said, “The Buy-in program is important because I wanted to continue working in spite of my disabilities, and I wanted to have an income that would give me some sort of financial independence.”

Making It Happen

For her part, Denise Weisenborn of Parma, Ohio, works daily to make the buy-in option a reality in her state. As state commissioner for the Ohio Rehabilitation Services Commission, she oversees and monitors programs to help people with severe disabilities find employment.

She’s convinced that the Medicaid Buy-in option could change the employment picture for many people with disabilities. She spearheads coalition groups that educate the public and elected officials about the impact the program would have in Ohio.

“If the Medicaid Buy-in option is implemented in Ohio, it will give SSI and SSDI beneficiaries like me the freedom to pursue higher-paying employment opportunities without the fear of losing their medical benefits. It will even make it possible for some consumers to accept full-time instead of part-time employment,” she said.

But she’s also realistic. “The fact that the buy-in program does not exist in Ohio at this time is simply a matter of money,” Weisenborn said.

Knapp echoed the sentiment, stating that expansion of Medicaid is “difficult in these times when states are looking for ways to save money.”

Weisenborn estimates that it will cost $20 million to get the buy-in program started, and the Ohio budget is in the red. “I believe that it would be put into practice tomorrow if the state had the money. It’s just so hard to be patient.”