States ready to take advantage of federal incentives to cover disabled workers through Medicaid
States ready to take advantage of federal incentives to cover disabled workers through Medicaid
States already have moved to take advantage of Congress’ latest offer, just a few months old, to bring disabled workers making up to 250% of the poverty limit into the Medicaid program.
Admittedly, the states that have jumped on the bandwagon have been planning to do so for months, and in some cases, years. After all, the federal Work Incentives Improvement Act (WIIA), signed Dec. 17 by President Clinton, essentially gives states incentives to do what Congress already allowed them to do in the Balanced Budget Act (BBA) of 1997. Several states that pursued extending Medicaid to the disabled under the BBA now are encouraged enough to want to take advantage of the new carrots dangled in the WIIA.
"These are unbelievably great, great steps," says Doug Stone, co-director of the Oregon Employment Initiative. Under the authority of the BBA, Oregon has raised the Medicaid income threshold for persons on Supplemental Security Income (SSI) from $20,000 to $40,000. Since February, the program has enrolled about 220 participants.
"The uptake seems to be fairly constant and consistent," Mr. Stone says. "We’re anxious to look at what’s come out of the WIIA."
Several other states already have or appear likely to expand Medicaid benefits for the disabled, including Alaska, Wisconsin, Maine, Iowa, Minnesota, and Vermont.
Vermont officials already had authority to extend Medicaid benefits to disabled workers when the new federal legislation was signed. Effective Jan. 1, Vermont’s disabled workers on Social Security Disability Insurance (SSDI) were able to make up to 250% of the federal poverty level (in 1999, $20,600) and maintain Medicaid benefits. Under conventional SSDI rules, Medicare and cash benefits end abruptly when a recipient’s income reaches $700 per month.
About 300 people are expected to take advantage of Vermont’s new program. Many disabled workers maintain their incomes at just under SSDI’s $700 threshold to hang on to Medicare benefits, Mr. Baird notes, and many others drop their income even lower to be eligible for Medicaid and its all-important prescription drug benefit. The benefit is particularly crucial for HIV and psychiatric patients on long-term drug therapy.
"For some psychiatric patients, the drug costs can run $500 to $1,000 a month. I can’t afford that; you can’t afford that; nobody can afford that," he says.
Long may it wave
Wisconsin will initiate a Medicaid buy-in program for the disabled on March 15, and state officials in the Wisconsin Pathways to Independence hope to have about 1,100 residents enrolled by the middle of 2001.
The state has extended income eligibility up to the full 250% of poverty allowed by the BBA and eliminated premiums for anyone making less than 150% of poverty.
Most of the Wisconsin residents likely to take advantage of the new program already are receiving Medicaid through other routes, says program coordinator Karen Tritz, such as Medicaid provided to the medically indigent.
The attraction of the Pathways program is that participants are allowed a much higher asset limit than conventional Medicaid, $15,000 compared to $2,000, and they are allowed to set aside assets in a retirement or similar cash account.
A seemingly obscure but significant provision of the WIIA restores the ability of the Social Security Administration to grant certain programmatic waivers.
Wisconsin is interested in seeking a waiver under which the Social Security Administration would reduce SSDI benefits when workers reached their $700 monthly cap by $1 for every extra $2 earned, says program director John Reiser. Such a change would recast the SSDI’s strategy to resemble the approach taken under SSI.
Where’s the savings?
Currently, SSDI cash benefits are discontinued entirely when a worker’s earnings reach $700, a milestone so threatening and abrupt that it is called a "cash cliff."
Oregon, Wisconsin, and Vermont are participating in a Robert Wood Johnson Foundation program to promote health insurance coverage among the disabled. (See "Model programs aim to get disabled people to work by maintaining Medicaid health benefits." State Health Watch, January 1999, p. 1.) Part of the funding is for analyses of the cost and savings associated with getting the disabled to work.
"The problem with that sort of analysis is that we think most of the costs are at the state level and most of the savings are at the federal level," says Mr. Baird.
"At that point, you go to the feds and say, Look, we saved you this much money by doing this; now it’s time for us to find a way to share this savings. We don’t have any specific plans for that. Once we have the research, we’ll take a look at it," he says.
Contact Mr. Stone at (503) 945-5836, Mr. Baird at (802) 241-2127, and Mr. Reiser at (608) 206-3063.
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