Surprising findings on expenditures for Medicaid 'Buy-In' participants

On the one hand, expenditures for Medicaid Buy-In participants, who pay monthly premiums, more than doubled from $887 million to $1.9 billion between 2002 and 2005, as did program enrollment. On the other hand, this group was found to be less expensive than other adult disabled Medicaid enrollees, with lower average Medicaid expenditures.

This could mean that Buy-In participants who are working require fewer services, or a less expensive mix of services, than other disabled Medicaid enrollees, according to an October 2009 report from Washington, DC-based Mathematica, Analysis of Medical Expenditures and Service Use of Medicaid Buy-In Participants, 2002-2005.

When workers with disabilities "buy into" Medicaid by paying monthly premiums or copayments, states can offer them Medicaid coverage when their income and assets would otherwise make them ineligible. Most Buy-In participants also receive Medicare coverage if they are eligible for Social Security Disability Insurance payments. While the average monthly Medicaid cost remained fairly stable between 2002 and 2005, with a slight decrease from $1,287 to $1,224 after adjusting for inflation, the average monthly Medicare cost for buy-in enrollees with dual coverage rose from $493 to $597 over this period.

"The overall finding that total medical expenditures grew was not surprising, because enrollment was rising," says Gilbert Gimm, PhD, a health researcher with Mathematica.

"However, it was interesting that average monthly expenditures for Medicaid were stable, even though enrollment and average Medicare expenditures were rising."

This finding was important because 75% of Buy-In participants are dual-eligibles, having both Medicaid and Medicare coverage. "Thus, the analysis of Medicaid costs should also take into account what is happening with Medicare costs, because some payments may be shifting from states to the federal government," says Dr. Gimm. "It will be interesting to see the extent to which Buy-In states have shifted their financing of prescription drugs to Medicare Part D after 2006."

Most Buy-In participants are not new to Medicaid but are transferring from another eligibility category and, therefore, do not require additional state funding.

The design of a new Buy-In program includes defining the target population and health care needs, thinking about program eligibility criteria, and planning strategies for effective outreach. "For example, the training of eligibility workers to identify potential candidates is a key step," says Dr. Gimm.

Focus on younger workers

States with Buy-In programs may wish to consider focusing their outreach toward younger workers with disabilities, because they have considerable potential to improve earnings and become self-sufficient. One way of doing this is to target individuals who are attending universities or are relatively new members of the work force.

"The use of Internet web sites and social networking sites can provide a direct way to connect with younger individuals with disabilities. These channels may be underutilized by some state agencies," says Dr. Gimm. "Youth transition programs could represent a potential group of future candidates for the Buy-In program, but effective outreach would require the coordination and sharing of information across agency silos to reach these individuals."

Contact Dr. Gimm at (202) 264-3460 or