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Access to Healthcare for
Working People with Disabilities

Medicaid Buy-In Primer

What Advocates and States Need to Know


What is a Medicaid Buy-in program?

People with disabilities who want to work fear the loss of access to comprehensive health care coverage. Right now a person receiving SSI or SSDI can access work incentives provisions within the Social Security Act to help them access health care (in particular 1619 (b) and Medicare). The work incentives provisions were designed to help federal disability beneficiaries to transition to work. When beneficiaries leave the rolls permanently because of their earned income they are forced into the private health care market-- either through their employer's group health plan, or if there is no employer plan through a private plan on their own.

The Medicaid Buy-in program was designed to provide access to comprehensive health care for working people with disabilities. This program is critical for people with disabilities who have a difficult time finding affordable comprehensive health care coverage in the private market. The Medicaid Buy-in allows working people with disabilities to pay a premium to participate in their state's Medicaid program, just like they would if they were buying private health care coverage.

What is the concept behind a Medicaid Buy-in program?

The concept first appeared in the Balanced Budget Act of 1997. The BBA permits a state to change the Medicaid program to allow people with disabilities who are working to pay a premium for Medicaid coverage. This means that people who were receiving SSI or SSDI benefits, but lost those benefits because of earned income, would be able to buy in to Medicaid for their health coverage. This also means that people with disabilities who have never received SSI or SSDI could apply for the Medicaid buy-in program. Either Social Security or the state agency responsible for Medicaid eligibility determinations would have to determine that the individual meets the Social Security definition of disability before they would be eligible for the buy-in program.

Here are some examples of how the buy-in program could work:

For people on Supplemental Security Income (SSI):

For people on Social Security Disability Insurance (SSDI):


The Ticket to Work & Work Incentives Improvement Act of 1999

This increases the flexibility of the states to set up Medicaid Buy-in plans. States have three new options to provide Medicaid for workers with disabilities.

 

Premiums: The state can require payment of premiums or other cost-sharing charges on a sliding fee scale based on income. The state may require payment of 100% of the premium for individuals with incomes over 250% but below 450% of the federal poverty level, except that the premium cannot exceed 7.5% of the individual's income.

Grants to States: The legislation provides grants to states to develop and establish infrastructures to support working individuals with disabilities and to provide personal assistance services to the extent necessary to enable individuals with disabilities to remain employed. Funds may be used to set up Medicaid buy-ins and demonstration projects. The Health Care Financing Administration expects to issue a request for proposal in the summer of 2000, with the first round of awards made by September 30, 2000.

Effective date: October 1, 2000

How can my state create a Medicaid Buy-in program?

States have a lot of flexibility to design a Medicaid Buy-in program that best meets the needs of individuals and the state. Both the Balanced Budget Act of 1997 and the Work Incentives Improvement Act of 1999 allow states to submit state plan amendments which redefine eligibility for this population. State plan amendments are different than waivers in that they are approved faster, apply statewide, and do not require the state to meet any cost-neutrality test.

Requirements for states:


Basic Variables For The Medicaid Buy-In Program

Under the BBA and the TWWIIA, states have the option to change the eligibility for Medicaid coverage. States can create a Medicaid buy-in program by raising the income limits; by disregarding income (earned and unearned); by disregarding spousal income and assets; by raising the asset limits; by exempting certain assets; and charging premiums for Medicaid coverage for people with disabilities who are earning up to (and beyond) 250% of the poverty level.

Eligibility:

Income - States can set any income limit and use SSI earned income disregards.

    1. States can disregard all income (earned and unearned income, such as SSDI benefit); or
    2. Disregard all spousal income.

Assets -

              1. Raise the limit to any level set by the state (by disregarding assets).

                                        2. Disregard assets of spouse, or a specific amount of spousal assets.

3. Have different assets exempt - such as retirement accounts, medical savings accounts, independence accounts.

Disability - must meet Social Security definition of disability, as determined by either Social Security Administration or the State. However, the state has the option to continue Medicaid for individuals who participate in the buy-in program but lose that eligibility because they medically improve. These individuals will still need to demonstrate a severe medical impairment but the impairment need not be so severe as required for SSI and SSDI eligibility.

Premium:

States also have flexibility to determine premiums. These premiums can be calculated by several different methods.

The premium rate must be a sliding scale based on income. For example -

1. A fixed or progressive percentage of earned income only; or

2. A fixed or progressive percentage of both earned income and unearned income; or

3. A different percentage for earned versus unearned income.

Additional flexibility:

  Benefit                        Check from                   Health                 Spenddown or        Resource Limit3
  
                                              Social Security        Coverage                Premium2 for
                                                                                                         Medicaid

SSI - earnings #$700/mo. Yes Medicaid Spenddown possible depending on earnings # $2,000
SSI earnings $ $700/mo but not over $1,108 Yes Medicaid - 1619(a) No spenddown; No premium # $2,000
SSI earnings $

$1,108/mo

No Medicaid - 1619(b) No spenddown; No premium # $2,000
No SSI, but earnings up to whatever limit State determines. No Medicaid Buy-in Premium possible $ $2,000
SSDI -in Trial Work Period or Extended Period of Eligibility Yes Medicare and Medicaid Buy-in Premium possible $ $2,000
SSDI- after Extended Period of Eligibility with earnings up to whatever limit State determines. No Medicare (maybe) and Medicaid Buy-in Premium possible $ $2,000

1 The State would have to decide how to treat unearned income (i.e., SSDI) above $520/month, using Section 1902(r)(2) of the Social                  Security Act. Whether or not you receive a check from Social Security, you must continue to meet the Social Security definition of                  disability to use the Medicaid buy-in program.
2 The State Medicaid agency will determine the amount of the premium.
3 The State Medicaid agency will determine the amount of the asset limit, and can increase it above $2,000 using Section 1902(r)(2).


What can I do as an advocate
if I want a Medicaid Buy-in program in my state?

Be well versed in the existing work incentives provisions for people with disabilities. This knowledge will help you better understand the population you are trying to help by creating a Medicaid Buy-in program. Do you know what 1619 (a) & (b) means? Are you familiar with the terms trial work period or extended period of eligibility? Have you heard of PASS? If these terms are unfamiliar to you take some time to review these incentives for people on SSI or SSDI. A good resource is the SSA's Red Book on work incentives. You can get the latest version at your local SSA office or on their website at www.ssa.gov.

Become familiar with existing health care protections like the Health Insurance Portability & Accountability Act. The Health Insurance Portability and Accountability Act of 1996 is a federal law designed to protect health insurance coverage for workers and their families when they change or lose their jobs. HIPAA applies to all persons insured under group health insurance plans, such as employer-sponsored plans, military-sponsored plans, a state high-risk pool, the Federal Employees Health Benefit Program, or a public health plan established or maintained by State or local government.

HIPAA states that a group health plan cannot apply a pre-existing condition exclusion for more than 12 months. In addition, HIPAA's "portability provision" means that once an employee has had health coverage, through a group plan, or even through Medicaid or Medicare -- this coverage can be used to reduce or eliminate any pre-existing condition exclusion that may be applied under a future employer group plan.

If a person has at least 12 months of creditable coverage under a prior plan, or Medicaid or Medicare, he or she will not be subject to any pre-existing condition clause under a new plan. This means that if a person has or had a prior diagnosed or treated condition, such as asthma or cancer, the new group health insurance plan cannot state that it will not cover the person for that pre-existing condition.

If a person has less than 12 months of creditable coverage, the new insurance plan must give the person credit for every month that she or he was covered under the old plan. This means that if a person was only on Medicaid for 7 months prior to getting a new job and had a pre-existing condition, the new insurance plan could still impose an exclusion (not cover the person for the pre-existing condition) but only for 5 months.

In order to receive full protection, a person may not have more than a 63 day break in coverage. This means that they cannot have been uninsured for more than 63 days before applying for the new insurance.

NOTE: The "portability" provision does NOT mean that an employee can automatically take his or her current health benefits to a new job.

Identify your allies. Employment for people with disabilities crosses disability, gender and class lines. Your best bet is to create a strong grassroots, cross-disability coalition. But creating a grassroots coalition will not get you a Medicaid Buy-in program. The Medicaid Buy-in is an attractive proposition to all those service providers and state agencies that deliver services to people with disabilities. It is also appealing to potential employers and leaders in the business community. What employers or business community leaders are involved in workforce development issues? Does your local or state Chamber of Commerce have a welfare to work subcommittee or an access to health care subcommittee?

Educate yourself and your allies. Do your homework! There are some key pieces of information that will help you work productively with your state Medicaid agency to think about how you want to set up a Medicaid Buy-in program. It is important to have a good understanding of what your state's population looks like in addition to understanding how your state's current Medicaid program works. Here are some basic questions you should answer when you start evaluating how your state should approach developing a Medicaid Buy-in program.

Know the federal demographics:

  • Fewer than one-half of one percent of federal disability beneficiaries leave those programs as a result of paid employment.
  • If only an additional one-half of one percent of the current SSDI and SSI beneficiaries were to go to work and off of benefits, the savings to the Social Security Trust Funds and to the Treasury in cash assistance would total $3.5 billion ? far exceeding the cost of providing services needed to assist individuals in entering work and achieving financial independence.

Know your state's demographics:

  • How many working age (18-64) people with disabilities live in your state?
  • How many working age (18-64) people with disabilities are receiving federal disability benefits in your state? How many are receiving SSI? SSDI?
  • How many of those individuals receiving SSI are currently utilizing existing work incentives provisions like 1619 (a) & (b)? How many individuals on SSDI are utilizing work incentives like the trial work period or are in their extended period of eligibility?
  • How many people have accessed VR employment and training services in your state?

Know your state's Medicaid program:

  • What is the standard of need or income eligibility threshold for people who need Medicaid coverage in your state?
  • Does your state cover Personal Attendant Services in their Medicaid program?
  • How many people with disabilities are on your state's Medicaid program?
  • What is the income limit for participation in the 1619(b) program?

Know what other states are doing:

  • How have other states set up their Medicaid Buy-in program? How much income do they let people keep? How much savings? What are the premiums?
  • Who supported the creation of the Medicaid buy-in in their state - was it the Governor's office? Advocates? Or the state Medicaid or VR agency? Did they have legislation?

And finally -

Know how your state makes decisions about their public benefits programs:

  • Who initiates change in your state's Medicaid program? Advocates? Legislators? The Medicaid agency or the Governor's office?

Other Tools for Your Toolkit

Many advocates have found it helpful to survey people with disabilities to help estimate what kind of response a state might have if they create a Medicaid Buy-in program. We have enclosed the survey developed by Minnesota Consortium for Citizens with Disabilities. They found the survey to be a great tool to educate consumers about the program in addition to learning more about the population's desire to go to work which helped them work with their Medicaid agency on cost estimates.

This information will help you build your argument for creating a Medicaid Buy-in program, but how do you access it?

The Social Security Administration

There are a lot of ways to access information about people on federal disability benefits in your state. One good source is the Social Security Administration's Statistical Bulletin. It can be found at the library in the reference section. The Red Book on Work Incentives is also helpful tool in providing you with background and terminology you need to understand the work incentives provisions. The Red Book can be picked up at any local SSA office. You could also go on-line at www.ssa.gov.

The SSI Coalition

The SSI Coalition has information on return to work issues, Medicaid Buy-in programs around the country and the TWWIIA. We have a website where you can download all of this information: www.ssic.org, or call us at 312.223.9600 (v/tty).

The Health Care Financing Administration

For more information about the details states need to know about crafting a program. Please contact Tom Hamilton at 410/786.9493 (thamilton@hcfa.gov) or Roy Trudel at 410/786.3417 (rtrudel@hcfa.gov).

State Agency Community Relations Bureaus

Some states have special community relations bureaus or ombudsman that can direct you to the proper source to glean some of the information you need. If you encounter problems at first, don't give up. Be prepared to write a formal letter telling why you would like the information. Remember, you can always request information under the Freedom of Information Act and your state is required by law to respond. Unfortunately, states are usually not timely in sharing information. If you need to go this route because you do not have relationships within your state agencies, realize that it will take some time so START EARLY.

Now that you've done your homework, what do you do next?

Remember, each state is different. There is no cookie-cutter approach we can give you. We can, however, share with you some ideas on how successful advocates have moved forward with their advocacy plan.

Convene a cross-disability coalition. Establish reasonable goals for your work. Look around the table: Do you have everyone you need to ensure success in your work?

The group will need to ask some tough questions:

  • How is Medicaid working in your state? Do you need to do some advocacy around improving access to the existing Medicaid program before you begin working toward a Medicaid Buy-in?
  • Have you done some initial research? Are people in your state utilizing existing work incentives?


Create a survey tool that will work in your state.
Think about a distribution strategy for your survey. Do you have a network to distribute and receive it? Who will tabulate and analyze the results? Who will write up the results? Do you have a plan for releasing the results? How will you share your plan with your state Medicaid agency?


Convene a "work group" with representatives from your state Medicaid and VR agency.
Send a letter to the director of both agencies expressing your coalition's desire to meet. Ask them to put together an interagency work group. Do as much homework as possible before you ask for a meeting! You want to be a credible source of information to them.


Do some publicity.
When the results from your survey are ready, have a media conference. Write letters to the editor and meet with editorial boards. It is just as important to educate the general public as it is to educate consumers.


FACT SHEET ON HEALTH INSURANCE PORTABILITY
AND ACCOUNTABILITY ACT (HIPAA)

WHAT IS HIPAA?

The Health Insurance Portability and Accountability Act of 1996 is a federal law designed to protect health insurance coverage for workers and their families when they change or lose their jobs. HIPAA applies to all persons insured under group health insurance plans - such as employer-sponsored plans, military-sponsored plans, a state high-risk pool, the Federal Employees Health Benefit Program, or a public health plan established or maintained by State or local government.

WHAT PROTECTIONS DOES HIPAA OFFER?

HIPAA states that a group health plan cannot apply a pre-existing condition exclusion for more than 12 months. In addition, HIPAA's "portability provision" means that once an employee has had health coverage - through a group plan, or even through Medicaid or Medicare -- this coverage can be used to reduce or eliminate any pre-existing condition exclusion that may be applied under a future employer group plan.

If a person has at least 12 months of creditable coverage under a prior plan, or Medicaid or Medicare, he or she will not be subject to any pre-existing condition clause under a new plan. This means that if a person has or had a prior diagnosed or treated condition, such as asthma or cancer, the new group health insurance plan cannot state that it will not cover the person for that pre-existing condition.

If a person has less than 12 months of creditable coverage, the new insurance plan must give the person credit for every month that she or he was covered under the old plan. This means that if a person was only on Medicaid for 7 months prior to getting a new job and had a pre-existing condition, the new insurance plan could still impose an exclusion (not cover the person for the pre-existing condition) but only for 5 months.

In order to receive full protection, a person may not have more than a 63 day break in coverage. This means that they cannot have been uninsured for more than 63 days before applying for the new insurance.

NOTE: The "portability" provision does NOT mean that an employee can automatically take his or her current health benefits to a new job.

HIPAA ALSO APPLIES TO INDIVIDUAL INSURANCE MARKET

HIPAA also applies to insurance sold outside the employer group market to certain individuals who were previously covered under a group plan. Individuals who have at least 18 months of creditable coverage under a prior group health plan, a government plan or a church plan must be offered private insurance without a pre-existing condition clause, at a premium rate determined by State law. Of course, the allowable premiums may be very high, making this kind of coverage an unrealistic option for many people.

WHAT IS CREDITABLE COVERAGE?

Most health coverage is creditable coverage for the purposes of HIPAA. Coverage under a group health plan, church plan or governmental plan, Medicaid, Medicare, a military-sponsored health care program such as CHAMPUS, a program of the Indian Health Service, a State high risk pool, the Federal Employees Health Benefit Program, a public health plan established or maintained by a State or Local government, and a health benefit plan provided for Peace Corps members is all considered creditable coverage.

Every employer, health insurance company, the Illinois Department of Human Services for the Medicaid program, and the Social Security Administration for the Medicare program must issue certificates of creditable coverage to persons previously insured. This means that a person is entitled to receive a certificate stating exact dates of coverage to prove to the next employer or insurer that they were covered.


SAMPLE HEALTH CARE BARRIERS TO EMPLOYMENT SURVEY

1. Please check all the disability categories that apply to you:

_____Physical _____Mental health _____Developmental

_____Other (please specify) _________________________________________

2. What is your monthly source of income? (check all that apply)

_____SSDI Amount $__________

_____SSI Amount $__________

_____Minnesota Supplemental Aid (MSA) Amount $__________

_____Employment Amount $__________

_____Other (please specify) Amount $__________

3. Do you have health insurance? (circle one) Yes No

If yes, check all that apply:

_____Employer health plan _____Individual policy (private pay) _____Minnesota Care

_____Medigap policy _____Minnesota Comprehensive Health Association (MCHA)

Other (please specify) ________________________________________________________

4. Do you receive (circle all that apply):

A. Medicare? Yes   No

B. Medical Assistance (MA)? Yes   No

If yes, do pay a spenddown? Yes   No

Do you need MA in order to cover health care costs not covered by other insurance? Yes    No

5. Check all of the health care services you use on a regular, monthly basis:

_____Personal care assistance _____Medications _____Special equipment or supplies

_____Other (please specify) ________________________________________________

6. Are you currently working? (circle one) Yes   No

A. If yes, would you work increased hours or seek higher wages if your health care benefits would not be affected? (circle one) Yes   No

B. If you are not working, would you consider getting a job if your health care benefits would not be affected? (circle one) Yes   No

7. How much money would you expect to earn per month if you were employed? $_________

8. Have you ever turned down a job, turned down increased hours, or turned down salary raises because you feared the loss of Medical Assistance? (circle one) Yes   No

9. If you answered "yes" to question #8, what would your monthly earnings have been? $_______

10. Do you receive:

Food Stamps (circle one) Yes   No

Subsidized housing (circle one) Yes   No

11. Please add any additional comments on reverse side.

12. Name and phone number where you can be reached (optional) ___________________________

____________________________________________________________________________________

 

Comments on Minnesota Survey on "Health Care Barriers to Employment"

Minnesota's survey on "Health Care Barriers to Employment of People with Disabilities" was conducted on a volunteer basis by members of the MN Consortium for Citizens with Disabilities and the MN Work Incentives Coalition. Copies of the survey were distributed via "Access Press", the state's disability newspaper, as well as through a wide range of disability organizations throughout the state. It was originally projected that about 200 surveys would be returned. In fact, almost 1,200 surveys were returned.

The survey questions that turned out to be the most helpful were #5 and #6. In reviewing the results, surveyors concluded that the survey was too long. Many people stopped filling it out before they got to the end, making the data on the last few questions highly suspect.

The following changes are recommended for anyone attempting to recreate this survey:

#2 - Omit dollar amounts. Many people did not complete these and many of those who did entered numbers that didn't seem correct (such as an SSI check of over $500).

#3 and #4 - Reverse the order of these two questions. Many people wrote MA or Medicare under "Other" in #3. If #4 had been first, there might have been a more pure response on what "Other" types of health insurance people had.

#4 - Omit - Do you need MA in order to cover health care costs not covered by other insurance? A lot of people seemed confused by this. We could tell by what people checked under #5 that some of their needs were unlikely to be met by other insurance.

#7,#8, #9 - Omit. Many individuals did not get this far and those who did often gave answers that indicated they may have been confused by the questions.

Please note that this survey focused on health care barriers. In some of the comments on the backs of the surveys, individuals wrote about problems with cash assistance (SSI, SSDI). Future surveyors may want to add a couple of questions to solicit feedback on whether people limit their employment due to the earnings cliff and/or the difficulty of getting SSDI benefits back if an individual's health condition later deteriorates.


THE WORK INCENTIVES IMPROVEMENT ACT OF 1999

On December 17, 1999, President Clinton signed the Work Incentives Improvement Act of 1999. This new law increases beneficiary choice in obtaining vocational and employment services; provides increased health care coverage for workers with a disability; and eliminates some of the current work disincentives.

The key provisions:

Medicaid Buy-In (Paying a Premium for Medicaid coverage)

States have three new options to provide Medicaid for workers with disabilities.

  • A state can eliminate, or set its own income, asset and resource limitations for workers with disabilities who meet the Social Security definition of disability.
  • A state can provide Medicaid to employed individuals who lose eligibility for Social Security disability benefits (SSDI) or Supplemental Security Income (SSI) due to medical improvement, but who continue to have severe medically determinable impairments.
  • A state can run a time-limited demonstration project to extend Medicaid to working individuals with potentially severe disabilities who, without health care, would become severe enough to qualify for SSDI or SSI benefits. Under this option, "working" is defined as working at least 40 hours a month, and a "potentially severe disability" is defined by the state.

 

Premiums: The state may require payment of 100% of the premium for individuals with incomes over 250% but below 450% of the federal poverty level, except that the premium cannot exceed 7.5% of the individual's income.

Grants to States: The legislation provides grants to states to develop and establish infrastructures to support working individuals with disabilities and to provide personal assistance services to the extent necessary to enable individuals with disabilities to remain employed. Funds may be used to set up Medicaid buy-ins and demonstration projects.
Effective date: October 1, 2000

Medicare extension

Provides for a 4.5 year extension over current law of free Medicare Part A coverage. The net effect is that a SSDI beneficiary will have a minimum of 8.5 years of free Medicare Part A after work begins. (Current law: 9 month trial work period w/Medicare, plus an additional 39 months of Medicare).
Effective date: October 1, 2000

The Ticket to Work

SSDI and SSI disability beneficiaries will receive a "ticket" or voucher from the Social Security Administration that allows them to choose a rehabilitation or vocational provider to provide employment services from an approved provider of their choice. Social Security will reimburse service providers based on one of two reimbursement systems: a milestone payment system or an outcome based system. The ticket program is voluntary.
Continuing Disability Reviews (CDRs) are suspended for ticket users while enrolled in the ticket program.
A program manager or managers will be selected to oversee "employment networks" of approved providers.
Effective date: Begins January 1, 2001 in selected areas. Has a 3-year phase-in nationally.

Elimination of work disincentives

Continuing Disability Reviews: When a beneficiary has been receiving either SSDI benefits for at least 24 months, SSA may not schedule a Continuing Disability Review (CDR) solely as a result of the individual's work activity; SSA may not use the fact that the individual is working as evidence that the individual is no longer disabled; and SSA may not presume that when an individual stops working that the individual is unable to work. This changes current law that requires a CDR when a SSDI beneficiary completes the 9 month trial work period.
Effective date: January 1, 2002

Expedited reinstatement of benefits: If an individual who goes back to work then becomes disabled within 60 months of losing SSDI or SSI benefits, the individual may file a request for reinstatement to benefits and become entitled to benefits in the month in which the request is filed. After the individual is reinstated, SSA will determine if the individual meets the definition of disability. While SSA is making the disability determination, the individual may receive up to six months of provisional benefits. If SSA determines that the individual is no disabled, the provisional benefits paid will not be considered an overpayment. Effective date: January 1, 2001

Work Incentive Planning and Assistance Program: SSA must establish a community-based work incentives planning and assistance program for the purpose of providing accurate information related to work incentives. $23 million has been authorized per year for 5 years to award grants to organizations on a competitive bid basis.
Effective date: Upon enactment

Social Security Work Incentive Specialists: SSA must train its staff to work with beneficiaries and community based work incentive planners on work incentive rules and programs.
Effective date: Upon enactment

Protection and advocacy services: $7 million per year has been authorized to pay for protection and advocacy systems in each state to provide information and advocacy to disability beneficiaries.
Effective date: Upon enactment

Work Incentives Advisory Panel: The law establishes a 12 member advisory panel of consumers and other experts to advise SSA and other agencies on the administration of work incentive provisions.
Effective date: Panelists are to be selected by the President and the Congress within 90 days of enactment.

Demonstration projects: SSA's authority to approve demonstration projects has been extended for 5 years. SSA is required to conduct demonstration projects providing for reductions in disability benefits (SSDI) based on reducing the SSDI benefit $1 for every $2 earned.

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January 2000