Medicaid Buy-In Program Designed to Expand Coverage for Working Individuals with Disabilities

The Ticket to Work Medicaid Buy-In builds on an earlier effort to expand  Medicaid eligibility for individuals with disabilities who desire to work. States may establish their own income and asset  standards or elect to have no standards at all. 1.) Nearly half of individuals with  disabilities who reported having health insurance obtained coverage  through public sources, such as Medicaid and Medicare. States’ Buy-In Programs Expanded Eligibility and Increased Cost Sharing for More Workers with Disabilities

The 12 states that opted to implement the Ticket to Work Medicaid Buy-In  program as of December 2002 set income and asset levels for eligibility  that provided new opportunities for working individuals with disabilities  to secure and maintain Medicaid coverage. In addition to expanding income eligibility and asset  limits, all states took advantage of the flexibility of the statute to charge  premiums or copayments to ensure that Buy-In participants shared in the  cost of their health care coverage. Twelve States Expanded Medicaid Eligibility Levels for Working Individuals with Disabilities

Across the 12 states that opted to implement Ticket to Work Medicaid  Buy-In programs, all set eligibility requirements that expanded eligibility  for working individuals with higher incomes or more assets than usually  allowed under their Medicaid programs. In these 11 states, the spend-down income  eligibility levels ranged from 15 percent to 100 percent of the FPL. Average  monthly premiums ranged from $26 to $82, with nearly half of the states  setting premiums from $40 to $60. Participants in 8 of the 12 states also were required to pay copayments for  health care services, such as $0.50 to $3 for an office visit or prescription  drugs. In 7 of these states,  copayments were the standard cost-sharing requirements for Medicaid. Buy-In Participants in Four States Generally Had Prior Medicaid Coverage and Worked in Low-Wage Jobs

In the four states in which we conducted more detailed work— Connecticut, Illinois, Minnesota, and New Jersey—Buy-In programs  enrolled many individuals who previously were enrolled in Medicaid, often  in eligibility categories with more restrictive income limits, such as the  medically needy category. As of December 2002,  these states had not formally analyzed whether Buy-In participants  withdrew from private health insurance coverage prior to obtaining  Medicaid coverage. In addition, CMS expects  to complete an extensive study of states’ experiences for 2001 and 2002  with the Buy-In programs authorized under both the BBA and the Ticket to  Work and Work Incentives Improvement Act of 1999 in the fall of 2003 and  to report its findings in 2004. We will send copies of this report to the Administrator of the Centers for  Medicare & Medicaid Services and other interested parties.
Why GAO Did This Study

Over 7 million individuals with disabilities rely on medical and supportive services covered by Medicaid. However, if working-age individuals with disabilities desire to increase their self-sufficiency through employment, they could jeopardize their eligibility for Medicaid coverage, possibly leaving them without an alternative for health insurance. In an effort to help extend Medicaid coverage to certain individuals with disabilities who desire to work, Congress passed the Ticket to Work and Work Incentives Improvement Act of 1999. This legislation authorizes states to raise their Medicaid income and asset eligibility limits for individuals with disabilities who work. States may require that working individuals with disabilities "buy in" to the program by sharing in the costs of their coverage--thus, these states' programs are referred to as a Medicaid Buy-In. The act also required that GAO report on states' progress in designing and implementing the Medicaid Buy-In. GAO identified states that operated Buy-In programs as of December 2002 and analyzed the income eligibility limits and cost-sharing provisions established by those states. GAO also assessed the characteristics of the Buy-In participants in four states that were among the most experienced in implementing the program.

What GAO Found

As of December 2002, 12 states had implemented Medicaid Buy-In programs under the authority of the Ticket to Work legislation, which was effective October 1, 2000, enrolling over 24,000 working individuals with disabilities. These states used the flexibility allowed by the legislation to raise income eligibility and asset limits as well as cost-sharing fees. Across the 12 states, income eligibility levels ranged from 100 percent of the federal poverty level (FPL) in Wyoming to no income limit in Minnesota, with 11 states setting income eligibility limits at twice the FPL or higher. In addition to increasing income and asset levels, these states required participants to buy in to the program by charging premiums, ranging from $26 to $82 a month, and co-payments, generally ranging from $0.50 to $3 for office visits and prescription drugs. In detailed analysis of four states--Connecticut, Illinois, Minnesota, and New Jersey--GAO found that most Buy-In participants had prior insurance coverage by Medicaid and Medicare, few had prior coverage by private health insurance, and many earned low wages--most making less than $800 per month. In commenting on a draft of this report, the Centers for Medicare & Medicaid Services noted that it expects to report in 2004 on its current study of states' experiences in 2001 and 2002 with the Medicaid Buy-In programs.