Review of studies regarding the Medicaid Buy In Program
Suggested Citation: Gavin, B & McCoy-Roth, M., Gidugu, V. (2011). Review of studies regarding the Medicaid Buy-In Program. Boston: Boston University, Sargent College, Center for Psychiatric Rehabilitation. https://www.bu.edu/drrk/research-syntheses/psychiatric-disabilities/medicaid-buy-in/
Conducted by McCoy-Roth Strategies, Brigitte Gavin and Marci McCoy-Roth Under contract to The Center for Psychiatric Rehabilitation With support from the National Institute on Disability and Rehabilitation Research.
Table of Contents
Plain language summary
Contributors
Introduction
Methods and procedures
Results and conclusions
References
Plain language summary
Today, individuals with disabilities have more opportunities than ever before to engage in the world of work. Innovative policies and laws such as the Americans with Disabilities Act have helped to break down structural and accessibility barriers, and cultural norms are shifting to create a more accommodating environment for individuals with disabilities in the workplace.
The Medicaid Buy In (MBI) program is yet another breakthrough to help persons with disabilities work and work more. Medicaid is typically the preferred insurance option for people with significant disabilities because it provides affordable access to personal care assistance and durable medical equipment, benefits often absent from traditional, employer-sponsored health plans. Yet, upon entering or re-entering the labor market, individuals with disabilities are often fearful they will lose access to the Medicaid benefits upon which they rely. In response, 42 states and the District of Columbia have established MBI programs that allow persons with disabilities to “purchase” health insurance through Medicaid by paying a monthly premium. Authorized for states under one of two federal legislations: the Balanced Budget Act of 1997 (BBA) or Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA), state MBI programs enable Medicaid access for people with disabilities who want to work and earn more than is generally allowed under other Medicaid categories.
In this review of the Medicaid Buy In literature, we located 30 national and state studies and evaluations of the program since its inception. These reviewed studies all discuss MBI participants’ employment and earnings activities, either across the nation or in specific states, and form the basis of this review. National and state evaluations of these programs have found that MBI enrollees earn more money, work more hours, contribute more in taxes, and rely less on food stamps than people with disabilities who are not enrolled. Analysis of SSA earnings data by Mathematica Policy Research, Inc. (MPR) shows that, nationwide, an average of 40 percent of participants increased their wages upon enrollment in the MBI program. While the average income of wage-earning participants remains low at $8,237, those 40 percent witnessed a median, inflation-adjusted increase in earnings of $2,582. States evaluations, with few exceptions, also document that MBI programs are helping participants to earn and work more. States programs can impact the earnings and employment averages of their MBI participants in two fundamental ways: attracting participants likely to earn and work more, and helping participants—once enrolled—to increase hours worked and income earned. To the first avenue, states can adjust their eligibility parameters (primarily income and asset limits) so that their programs attract higher earning and higher wealth individuals. Regarding the second, program policies (such as limited work “grace periods”) and support mechanisms (like coordination with the Social Security Administration’s other work incentive programs) can help enrolled participants to work and earn more.
However, authors of state and national evaluations alike are compelled to recognize that, even with the positive influence of the MBI program, this is a population living with often persistent and difficult disabilities. As a result, continuous, full-time employment is a challenge. This challenge is further compounded by this populations’ high rate of prolonged dependence on federal disability programs, such as Supplemental Security Insurance (SSI) and Supplemental Security Disability Insurance (SSDI), and the income limits that serve as earnings disincentives past a certain level. The MBI program itself is not without imperfections. Participants in many states find the program complex and difficult to understand, and work support features, such as employment counseling services, are often underfunded and/or insufficiently marketed.
Despite these complications, the reviewed evaluations and studies document that MBI programs successfully enable participants to engage, or engage more robustly, in the labor market. Program enrollment rapidly exceeded projections in many states, clarifying that a high demand for the program exists. This growth is likely the result of more qualitative findings by several states that powerful emotional factors compel participants to work or work more, regardless of the monetary incentive. Furthermore, enrollment in the MBI program causes participants to feel more financially secure, and some states report improvements in mental health associated with increased employment.
As states’ MBI programs become more established, and as health care reform unfolds with the guarantee of coverage for people with critical health care needs, it will be important to continue learning from these initiatives. Additional experimental studies that examine a cohort over time will help to more conclusively determine the program’s impact on earnings and employment. Also, the results of much-needed experimental initiatives, expected in 2011, will potentially help the MBI program evolve towards a more targeted and comprehensive range of services, as opposed to a uniform structure for all individuals with a disability. Information from these future evaluations and studies should inform policy considerations about how best to structure programs and incentives to facilitate increased earnings and employment for people with disabilities who want and are able to work.
Contributors
Lead Reviewers:
Brigitte Gavin,
Marci McCoy-Roth
Study Group:
Brigitte Gavin,
Marci McCoy-Roth,
McCoy-Roth Strategies;
E. Sally Rogers,
Marianne Farkas,
William Anthony,
Vasudha Gidugu,
Mihoko Maru,
Center for Psychiatric Rehabilitation, Boston University
We thank the following Health and Disability Advocates staff members for their thoughtful review: Lisa D. Ekman, JD, MSW, Senior Policy Advisor; Sara Salley, Technical Consultant; and Melissa Turner, Project Director, NCHSD. Additional thanks to Anne, Reither, for her suggestions of studies, Director of Medicaid Infrastructure Grants Research Assistance to States (MIG-RATS).
Introduction
Rationale for the Review.
Today, individuals with disabilities have more opportunities than ever before. Innovative policies and laws such as the Americans with Disabilities Act (ADA) have helped to break down structural barriers that previously prevented individuals with disabilities from entering public buildings, making the “built environment” more accessible. Additionally, the ADA mandated that employers must provide job accommodations for qualified workers with disabilities, which opened even more job opportunities for this population. Following suit, advances such as those in medicine, Internet technology and assistive devices have helped improve everyday quality of life for this population, and have created opportunities for many more to participate meaningfully in the workforce.
The Medicaid Buy In (MBI) program is yet another breakthrough that helps persons with disabilities to work and work more. Medicaid is typically the preferred insurance option for people with significant disabilities because it provides affordable access to personal care assistance and durable medical equipment, benefits often absent from traditional, employer-sponsored health plans. Upon entering or re-entering the labor market, individuals with disabilities are often fearful they will lose access to the Medicaid benefits upon which they rely–this is an alarming prospect for someone trying to maintain a decent quality of life with their disability. Authorized for states under one of two federal legislations: the Balanced Budget Act of 1997 (BBA) or Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA), state MBI programs allow persons with disabilities to “purchase” health insurance through Medicaid by paying a monthly premium, enabling Medicaid access to people with disabilities who want to work and earn more than is generally allowed under other Medicaid categories.
To date, 42 states and the District of Columbia have established Medicaid Buy In (MBI) programs. To ensure proper evaluation and careful development of states’ programs, the Centers for Medicare and Medicaid Services (CMS) ismonitoring the creation and enrollment ofallBuy-In programs. CMS provides Medicaid Infrastructure Grants (or MIGs) directly to states to help them create and continuously research their MBI programs. CMS has contracted with Mathematica Policy Research (MPR) to document states’ decisions regarding their programs, and the observed impact of MBI programs on participants. To execute this on a national level, MPR has built an integrated dataset with information on MBI participants across the MIG-recipient states. Supplementing this analysis, several states with MIGs have conducted (or are conducting) their own state-specific evaluations.
These national and state evaluations have found that MBI enrollees earn more money, work more hours, contribute more in taxes, and rely less on food stamps than people with disabilities who are not enrolled. The program’s impact is made more significant due to its reach: as of December 31, 2009, the 37 states reporting enrollment figures under MIGs had more than 150,000 participants in their MBI programs. Because the purpose of the MBI program is to help persons with significant disabilities obtain and retain work, the outcomes that are most indicative of programmatic success are those concerning earnings and employment.
Overall, MBI participants work and earn more than they do prior to program enrollment. However, wide variations in how states design and execute their individual MBI programs result in a broad range of employment and earnings averages across states’ programs. There are two fundamental ways that states can impact these factors: attracting participants likely to earn and work more, and helping participants—once enrolled—to increase hours worked and income earned. This paper examines lessons learned from state and national evaluations, and details best practices for states to establish or modify their programs so that programs can do both.
The high level observations are that states can adjust their eligibility parameters (primarily income and asset limits) so that their programs attract higher earning and higher wealth individuals. Also, program policies (such as limited work “grace periods”) and support mechanisms (like coordination with the Social Security Administration’s other work incentive programs) can help enrolled participants to work and earn more. However, state and national evaluations alike were compelled to recognize that, even with the positive influence of the MBI program, this is a population living with often persistent and difficult disabilities. As a result, continuous, full-time employment is a challenge. The complications posed by their disabilities are compounded by this populations’ high rate of prolonged dependence on federal disability programs, such as Supplemental Security Insurance (SSI) and Supplemental Security Disability Insurance (SSDI). The income and asset limits of those programs, and particularly the Substantial Gainful Activity limit of $12,000 (in 2010) for SSDI recipients, impose a disincentive to earn past a certain income level.
This report reviews the majority of existing MBI program evaluations, including those state and national in scope. The authors examined these evaluations to assess whether MBI programs had an effect on participants’ earnings and employment outcomes, as well as to identify any additional positive or negative outcomes. In addition to this review of quantitative studies, qualitative reports were also reviewed to enrich the understanding of the various MBI program models. This qualitative evidence illustrates some successful practices that were not fully captured in quantitative analyses and that may be helpful for any future policy deliberations related to Medicaid Buy-In programs.
Objectives of the Review
State Medicaid Buy-In Initiatives and their effect on Earnings and Employment for People with Disabilities.
Methods and procedures
The authors conducted a thorough review of national and state research on Medicaid Buy-In and disability-employment related programs. The literature search process involved looking through publications on MBI outcomes by Mathematica Policy Research Institute, Center for Medicare and Medicaid Services, and publications available through State websites. In addition searches were also conducted using PubMed and Google with the following search terms: Medicaid Buy In; Outcomes; Employment; and Earnings.
Thirty (30) studies were identified that discussed the impact of the MBI program on earnings and/or employment for people with disabilities. We examined each of the 30 publications for ancestor publications and suggestions about other studies that might be available. In addition to examining the 30 studies, the lead reviewers contacted several experts in MBI programs; those individuals reviewed the studies located to ensure that the selection was comprehensive and representative.
This study is unique among existing literature, in that it combines the review of national reports, which primarily use combined datasets for analysis, with state-level evaluations, which tend to use a mixed-method approach to analyze individual state MBI programs. This combination of reviews contextualizes the analysis, and provides an in-depth representation of the existing knowledge on MBI programs.
All reports were entered into an Excel spreadsheet (Appendix A) that catalogues the following characteristics of each:
- Design (experimental, quasi-experimental, or non-experimental);
- Sampling, if applicable;
- Methodology (quantitative, qualitative, or mixed method);
- Data collection instruments or sources;
- Population studied;
- Data years;
- Limitations.
Most studies are quasi-experimental in design, although some states have done their best to assess a program’s effectiveness by creating historical control groups for comparison. For instance, Washington State used a rigorous statistical matching method to create a contemporaneous comparison sample of persons enrolled in the conventional Medicaid program. In Kansas, the Working Healthy MBI program collaborated with the state’s Department of Revenue to gather income data on 254 continuously enrolled participants, and compared income in the year after enrollment to income in the year prior to the cohort’s enrollment. Although states are attempting to replicate experimental conditions, there is a dearth of true experimental studies that would allow researchers to determine the program’s causal impact on earnings and employment rates in a rigorous way. The findings identified from these studies are grouped into two categories: assessment of earnings and/or employment; or an analysis of the program’s structure or processes to inform future policy decisions.
There were several limitations to the analysis of the reports presented. The start date of each program and the state of the economy during the years studied pose external threats of validity to the findings and lessons learned from each. Data systems also proved a challenge. For instance, the State Medicaid Management Information System (MMIS), which collects state-level information on the various MBI programs, improved over time. As a result, and as Mathematica Policy Research, Inc. points out, MMIS data are stronger in 2003, for example, than data from the previous year. There is also a small gap in capturing all earnings of those in the MBI program. The SSA Master Earnings file, which provides much of the earnings data (particularly for the national studies), fails to capture the wages of many self-employed individuals, as well as those persons with disabilities that are engaged in casual employment or sheltered workshop employment.
These problems with the data are also true for the individual state evaluations. States used varying methodology to gather earnings and employment data from participants. Most states collected that information via surveys and figures are self-reported. Using this survey approach to collect information on MBI participants also introduces a strong potential for non-response bias — for instance, those who do respond to surveys may have less severe disabilities, and could be more familiar with the program.
Reviewers
The primary reviewers for this narrative review of the Medicaid Buy-In Programs were Marci McCoy-Roth and Brigitte Gavin; the report was compiled under contract to the Center for Psychiatric Rehabilitation. Ms. McCoy-Roth is a principal in McCoy-Roth Strategies, a consulting firm to non-profit organizations. Ms. McCoy-Roth holds degrees in economics, policy analysis and public affairs and communication. She served as an officer with The Pew Charitable Trusts for nearly four years, where she was responsible for developing and managing a portfolio of grants, and monitoring grantees progress. For the State of Wisconsin, Marci managed an external evaluation of the state’s long-term care program and developed and oversaw a state-sponsored evaluation of a Medicaid disability employment program. As a research and evaluation consultant for the National Consortium for Health Systems Development, Marci provided strategic planning expertise and technical assistance in utilizing research to improve systems.
Brigitte Gavin, lead evaluator at Roth Evaluations, graduated from Boston University with a B.S. in Business Administration, and earned her Masters degree in Social Policy from the University of Pennsylvania. Her graduate studies focused on policies and practices to increase the financial security and economic mobility of low-income populations. Most recently, Ms. Gavin has worked for the Corporation for Enterprise Development (CFED) to research and design the Work Ready Communities Initiative in North Carolina, an effort to focus attention and spur action on the issues of inadequate skill and economic development in the state. Until 2009, Ms. Gavin worked at The Pew Charitable Trusts where she played a key role in the project management and coordination of 10 national policy initiatives, ranging from foster care to family financial security within the Pew Health Group.
Time period covered by the review.
We did not set a limit on the time period for the reviews. Given the fairly recent enactment of the MBI program we decided to consider all possible studies of its effectiveness regardless of when they were published.
Results and conclusions
To the extent possible, quantitative findings were grouped for review, followed by more qualitative findings.
I. Quantitative Findings: Earnings
Overall, enrollment in the MBI program appears to result in increased earnings for participants. This is supported by multi-state evidence, as well as several individual state evaluations. Analysis of SSA earnings data by Mathematica Policy Research, Inc. (MPR) shows that, nationwide, an average of 40 percent of participants increased their wages upon enrollment in the MBI program and the median, inflation-adjusted increase from earnings in the year pre-enrollment, to earnings in the year post-enrollment was $2,582. MBI enrollment is more strongly associated with increased earnings in some states than in others. For instance, 58 percent of MBI participants in Nebraska increased earnings post-enrollment, as compared to a low of 20 percent of New Mexico’s enrollees. The full analysis of MBI participant earnings increases, across states, is below.
Table 1- Earnings increases as a Result of MBI participation (Mathematica Policy Research)
Liu and Weathers, the authors of the MPR brief that included this analysis, hypothesize that individual state economies may play a small role, but that state program design factors are more influential. Using the two extreme states above as examples, Nebraska requires MBI participants to work continuously in order to maintain their enrollment in the program. The state allows no “grace periods”. New Mexico, however, does not require those MBI participants who are SSDI beneficiaries to work for two years (the duration of their time spent on the Medicare eligibility waiting list). As a result, Nebraska’s MBI will attract and retain individuals who are having more success in the employment market.
Several state evaluations present earnings data, although direct comparisons between these earnings outcomes are difficult. States conducted their evaluations in different years—the disparate economies and minimum wage policies in states, as well as national economic trends, compromise the external validity of the outcomes. Also, as mentioned above, the design features of each state program will influence the average earnings of MBI participants in that state. For example, eligibility guidelines in some states allow individuals with higher incomes to participate in the MBI program, thus attracting these individuals to participate in the program and elevating the average earnings of participants.
Yet, even with the varying contexts of each state evaluation, all but two of the state evaluations reviewed affirm that MBI programs are helping participants to earn more. The two states with less conclusive findings (Iowa and Wisconsin, also listed below) have somewhat lax work requirements, which likely attracted participants with more challenges to employment, and lower frequencies fo participants working and earning more. Results of relevant state evaluations are reviewed below:
Iowa
Earnings: Average earned income of participants in 2009 was $160.96 per month, a 3.9 percent decrease from the 2008 figure of $167.43. Median earnings are $30 per month.
Notes:These averages are skewed because of the high percentage of Iowa’s MBI participants that were not working during the state’s evaluative period. In contrast, MPR’s state-by-state analysis that excluded participants with no income showed Iowa residents earning an average of approximately $4,800 in 2006 ($400/month on average).
Kansas
Earnings: A continuously enrolled cohort increased their federal adjusted gross income from $6,138 in 2003 (pre-enrollment) to $7,699 on average in 2007. Participants increased their average hourly wages from $6.94 in 2004 to $7.69 in 2007 (figures not adjusted for inflation).
Notes: More participants reported increased wages over time. While 12.8 percent of participants reported an increase in hourly wages from 2004 to 2005, that number grew to 26.6 percent from 2006 to 2007.
Massachusetts
Earnings: The state evaluation cited Mathematica Policy Research Inc.’s national analysis of earnings for their state in citing that first-time participant earnings increased from an average of $10,846 in 2001 to $12,151 in 2002 (figures are adjusted for inflation).
Michigan
Earnings: Average monthly earnings increased from $528.80 in the year before enrollment in 2005 to $616.83 in the year following enrollment.
Nebraska
Earnings: While comparison figures are not available, a total of 30 percent earned between $5,000 and $10,000 on average in 2005. 33 percent of current participants earned less than $2,500 on average.
Notes: Results are non-scientific, as fewer than 100 surveys were conducted. Also, Nebraska surveyed former MBI participants and their earnings clustered in the $5,000 to $10,000 range.
New Hampshire
Earnings: From February, 2001 to June, 2005, participants earned an average of $481.50 per month, compared to a similar group of nonparticipating Medicaid beneficiaries, who earned an average of $33 per month. The average pre- and post-enrollment increase in earnings was 82.3 percent over the duration of the observed time frame.
Notes: Most of the pre- and post-enrollment increase in earnings is a result of participants obtaining employment upon enrollment. However, the 45 percent of participants already employed also increased their earnings by an average of 10 percent, post-enrollment.
Washington State
Earnings: Participants with prior Medicaid coverage earned 39 percent more than those in a matched control group of nonparticipants: $7,126 versus $5,136 on average in the year following enrollment.
Notes: The results for participants without a prior history with Medicaid are even more significant. Those participants earned 136 percent more than the matched control group ($9,129 versus $3,860 on average).
Wisconsin
Earnings: In 2008, average participant earnings were $167 per month. This represents a decrease from 2007, when participants earned $185 per month. The median level of earnings is $36 and 68 percent of participants earned less than $100.
Notes:These averages are skewed because of the high percentage of Wisconsin’s MBI participants that were not working during the state’s evaluative period. In contrast, MPR’s state-by-state analysis that excluded participants with no income showed Wisconsin residents earning an average of almost $4,727 in 2006 ($400/month on average).
Some state-level evaluations have difficulty establishing a strong association between enrollment in the MBI program and increased earnings due to the lack of efficient data systems and a resulting difficulty in tracking earnings of this population. Many state evaluations depend on participants self-reporting their income via surveys. Although this method is helpful for capturing the earnings of the self-employed—a group often excluded from FICA (which stands for the Federal Insurance Contributions Act) records and the SSA Master Earnings File—it is not as reliable as purely administrative data and can muddy the analysis of the true impact of MBI enrollment on earnings.
For instance, different data collection systems show varying results in Wisconsin. The state’s income data tracking system, CARES, shows that longer enrollment in that state’s MBI program is correlated with increased income. However, self-reported income data—while purporting higher income levels than CARES—does not show the same correlation. Therefore, in Wisconsin, it is less clear whether MBI program participation is correlated with increased earnings.
In Kansas, the state attempted to resolve this discrepancy between self-reported income and SSA records by collecting surveys with self-reported income, and by also following a cohort of 254 continuously enrolled participants from 2003 through 2007. Evaluators then worked with the state’s Department of Revenue to augment that cohort’s self-reported income to their FICA-system income.
Increased earnings are significant given participants’ historically low earnings levels. Before enrollment in the MBI program, national participant earnings were relatively low, averaging $4,844. This earnings level equates to an individual earning the federal minimum wage of $5.15 and working less than half time (in 2006, the time of the study). For those participants who earned income post-enrollment, and as referenced earlier, the MBI program resulted in median increased earnings of $2,582. This is a significant income boost for individuals accustomed to earning so little. After enrollment, the average income of wage-earning participants remains low at $8,237. However, the impact of the MBI program on this population’s earnings–an increase of almost 50 percent–is considerable.
Although the national average wages of those participants with earned income is $8,237, there is a wide range of average earnings levels across states.Mean earned income ranges from a low of $4,727 in Wisconsin to a high of $17,780 in South Carolina. (The high wages for South Carolina may seem paradoxical given the historically lower wages earned in the Southern states, but the reasons for this are, again, related to the design of the MBI program and not the economy of the state. The influence of programmatic design on aggregate participant employment and earnings outcomes is described in further detail below.)
The parameters of the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs have moderated the impact of the MBI program. There are key differences in these two programs, beginning with eligibility determinations. Regarding SSDI, if a person is deemed disabled and has contributed to the Federal Contributions Act fund (FICA) via deductions from their payroll (or their spouse’s or parents’ payroll), he or she is eligible to receive monthly SSDI payments. Income and assets do not factor into SSDI eligibility determinations. The amount of the monthly SSDI payment is based on how much an individual (or his or her relative) has contributed over his or her lifetime to this social insurance program, and is capped at a certain amount. After a 24-month waiting period, SSDI recipients become eligible for Medicare.
SSI recipients, in contrast, must have limited income and assets. The Federal Benefit Rate, or FBR determines monthly payment amounts and, in 2010, the FBR is $674 for a qualified individual and $1,011 for a qualified couple. An individual or household’s countable income is subtracted from the FBR to determine monthly payment amounts. Some states do supplement this federal standard. SSI recipients are automatically eligible for Medicaid. Some individuals are “dual eligibles” and receive both SSDI and SSI payments via a coordinated process. These persons have both contributed to the SSDI system, and meet SSI’s income and asset limits. “Dual eligibles” automatically receive Medicaid and then, if still determined disabled 24 months later, switch to Medicare.
The SSDI and SSI programs play a significant role in states’ MBI programs because, nationwide, seventy-five percent of MBI participants continue to receive SSI or SSDI cash benefits and a condition of eligibility to receive these benefits is making less than the SSA’s Substantial Gainful Activity threshold ($12,000 annually in 2010). The approval process for SSI/SSDI cash benefits is lengthy, arduous and problematic for encouraging work; beneficiaries are only deemed eligible if it is proven that they cannot currently work, either in their previous employment or in a new work situation, and that their disabilities are expected to last at least one year or result in death. Once deemed eligible, persons with disabilities receive a cash benefit each month as long as their earnings do not exceed the SGA limit. There is a difference between the two programs in this regard: SSI beneficiaries who return to work see their cash benefits decrease gradually as their earnings increase; however, SSDI beneficiaries who earn even one dollar above the limit lose their entire cash benefit. Almost all state and national evaluations that analyze earnings have observed that average participant earnings sharply fall off at the SGA threshold. In 2003, 70 percent of all MBI participants nationally had earnings below the SGA level of that year ($800/month). This phenomenon is referred to as the SGA “cash cliff.” In other words, while the MBI program enables SSI/SSDI beneficiaries to return to work and maintain critical health coverage, this population—and particularly SSDI recipients–is careful to keep their earnings below the SGA level so as not to jeopardize the cash benefits upon which they rely. Because the definition of disability currently in federal law would be difficult to change, work incentives programs such as the MBI have been introduced to support employment for people who can be determined to have a significant disability, but for work, allowing states to disregard earned income or savings in the eligibility determination process that would otherwise render a person ineligible for health care or other critical benefits.
Perhaps not surprisingly, evaluations found that MBI participants still rely on SSI/SSDI cash benefits and other benefits and supports to supplement their earned income despite the fact that they are employed. For example, in Wisconsin, approximately half of all participants’ income is from SSI or SSDI. While an important income support for persons with disabilities, this dependence on disability benefits has negative repercussions on earned income levels: for every $1 received as a disability cash benefit, MBI participants decrease their earnings from work anywhere between $.80 and $1.09.
Program structure influences earnings (and employment) profiles of state programs. Again, MBI programs can impact participant employment and earnings averages by setting eligibility parameters that attract participants likely to work and earn more, or by helping participants—once enrolled—to increase their earnings. The reviewed studies and evaluations found that the eligibility standard most associated with participants’ high earnings and work habits is the establishment of a high income “floor” or income “ceiling.” Once enrolled, the program features most associated with high earnings are setting short grace periods, and instituting policies of employment verification.
Similar to many other social assistance programs, including SSI and SSDI, income and asset limits affect how influential MBI programs can be with their impact on earnings. Two relatively simple policies are associated with higher participant earnings: setting high income ceilings and/or high income floors. Income ceilings cap eligibility at a certain earnings level. If this threshold is set at a high level—or, if no ceiling is established, as is the case in Massachusetts—a state’s MBI program will attract participants with higher earnings.
Income floors, or earning eligibility requirements, refer to policies that restrict eligibility to those participants who earn above a certain dollar amount in wages. In other words, it is not enough for participants to work, they must work and earn above an established threshold. In South Carolina, the state established an income floor of $810 a month (in 2005); if a prospective MBI participant had earnings below this level, the state encouraged them to access Medicaid by applying for SSI. Setting this income floor is, however, against regulations established by the Center for Medicare and Medicaid Studies, which are intended to encourage any level of employment for persons with disabilities. Yet some states (South Carolina, along with New Mexico and Oregon) set one anyway and, as a result, the average earnings of MBI participants in these states are relatively high.
Massachusetts is in the unique position of having implemented a Medicaid buy-in program in 1997, prior to the issuance of national CMS guidelines, and that state set a work requirement of 40 hours per month for participants. This work requirement currently equates to an earnings minimum of $320 per month, based on that state’s minimum wage of $8.00 per hour. Because it preceded CMS regulations, Massachusetts’ income floor is not only recognized by the regulatory agency, CMS is leveraging the evaluative opportunity to examine how instituting an income requirement affects participant employment behavior. Like the other three states with income floors, Massachusetts’ participant earnings are some of the highest in the country, and significantly higher than the average participant earnings in neighboring states. A recent study revealed a “clustering” of hours worked around the required monthly minimum, suggesting that participants increased (or, in some cases, decreased) their hours worked to meet this eligibility parameter.
Grace periods, or work stoppage protections, refer to the period of time that an individual can remain enrolled in the MBI program without working for wages. While the program is intended to serve those persons with disabilities who are employed, the reality is that participants’ disabilities (and a multitude of other challenges) make gaps in employment likely. Nationally, 69 percent of all MBI participants were employed with earnings in 2006. The percentage of MBI participants reporting earnings varies dramatically across states due to differences in these work requirement policies. States with shorter grace periods (defined as between one and six months) have a higher percentage of participants employed and earning income. 2006 data show that the mean earned income of MBI participants in Wisconsin, a state that allows lengthy grace periods, was $4,727, while South Carolina enrollees, participating in a program that allows no grace periods, earned an average of $17,780.
Work verification refers to the measures that states take to ensure that participants are working for wages. In Washington State, it is not enough for participants to claim that they are working; the state’s MBI program requires that they show payroll taxes are deducted from their paycheck, or the participant must present their current and valid self-employment forms. In contrast, Wisconsin allows its work requirement to be satisfied with “in-kind employment”, unverified work for non-monetary payment or work where wages are not reported to the state or federal tax system(s).
Individual participant characteristics also influence earnings outcomes. States can also try to attract participants with certain demographic characteristics and experiences to their MBI programs. Specifically, younger participants, nonwhite participants, and those who have not previously received Medicaid benefits are likely to earn more than the average MBI enrollee. The type of primary disability also appears to factor into earnings outcomes.
Of the top 10 percent of earners in 2004, 60 percent were aged 21 to 44, although this age group represents only 45 percent of all MBI participants. Younger participants likely have higher earnings because they are likely to be healthier and so are able to work and earn more. Certainly other factors influence the increased earnings of younger participants—for example, a greater facility with technology and the Internet may make home employment a more viable option for younger persons with disabilities, improving their employment outcomes. Regardless of the reasons, age is inversely correlated with earnings. In other words, for every one-year increase in age, the average MBI participant earns $91 less.
Additionally, nonwhite earners are more likely to be among the top earners in the MBI program. Nonwhite participants make up only 20 percent of MBI enrollment, but 38 percent of the program’s top earners.
State evaluations are beginning to reflect the differing earnings trajectories of participants, based on their prior involvement with social support programs. Participants are more likely to earn more, and earn above the SGA threshold, if they have not previously been involved with the SSI and Medicaid programs. For instance, Washington State created two groups of study participants for analysis purposes: one group that had previously received Medicaid assistance, and a second that had not. The two groups were rigorously matched on numerous factors, including level of disability, to guard against selection bias in the results. While both study groups realized significant earnings increases upon MBI enrollment, the group that had not previously received Medicaid increased earnings at three times the rate of the other group.
Finally, primary disabilities also appear to affect earnings outcomes. The most commonly reported disability is mental illness—nationally, approximately one in three MBI participants has a mental illness, and several state evaluations report that mental illness is the most frequently reported primary disability. While this group’s earnings tend to be lower than other MBI participants, participants with severe mental illness appear more likely to earn wages (80 versus 69 percent), to increase those wages more rapidly (46 percent had higher earnings in the second year after enrollment, as compared to 35 percent of other participants), and to earn above the SGA level at a greater frequency (18 versus 16 percent) than the average MBI participant.
Looking at other disabilities, enrollees with intellectual retardation and other developmental disabilities earn less than the average MBI participant; however, they are the participants with the highest occurrence of employment. This is likely a result of the sheltered, or “workshop” employment situations arranged for persons with intellectual and other developmental disabilities. In contrast, those with musculoskeletal conditions work the least (along with those who have co-occurring conditions), but tend to earn the most when they are employed.
Increased earnings have positive implications for state budgets. Some states have monetized the impact of the MBI program on other areas of their state budgets. In Washington, the state’s Office of Financial Management estimates that six percent of participants’ increased earnings—or $400,000 alone in the first year –directly contribute to the general fund. Kansas calculated that, between 2003 and 2006, MBI participants sharply increased the amount of state income taxes from an average of $74 in 2003 to $123 annually in 2006.
States are also monetizing the MBI program’s impact in alternate ways. In New Hampshire, that state’s evaluators calculated the aggregate earnings of its MBI participants as $20 million from 2002 to 2006, $11 million more than what would have been in the state’s economy without the MBI program. Kansas responded to concerns that its MBI program was driving up the cost of the Medicaid program with analysis showing that state medical expenditures had decreased 45 percent per person between 2004 and 2007, and in Michigan, the state realized a 53 percent direct savings in reduced healthcare costs, a reduction in average costs per person from $947 to $446.
Less directly, increased earnings and disposable income means a reduced demand for social service programs. Participants are concerned about losing their SSI/SSDI benefits and thus they continue to rely upon those cash benefits. However, for those benefits with less rigorous application protocols (food stamps, for example), enrollees may reduce their reliance. Washington State participants with prior Medicaid coverage reduced dependency on SNAP by $217 per month; those without prior Medicaid coverage reduced SNAP dependency by $300 per month. While Washington State has monetized this reduced dependency, few other states have followed suit. Michigan notes that 40 percent of its MBI enrollees rely on SNAP or a housing subsidy, but does not or cannot determine the impact that MBI has had, either on those participants or others that may have formerly used those income supports. Also, Kansas frames the reduced dependence in terms of participant losses—the state found that 20 percent of its MBI enrollees have lost income-support benefits such as energy assistance as a result of increased income.
Involvement with SSI work incentive programs, such as Ticket to Work and the Trial Work Period, are associated with increased earnings. States with more enrollees utilizing various work incentive programs also had more participants earning above the SGA. While 39 percent of participants with no participation in SSI work incentive programs (i.e., 1619(a) and (b)) experience an earnings increase, that figure rises to 57 percent for participants enrolled in both of these work incentive programs. Unfortunately, MBI enrollees cross utilize these programs at low frequencies – only 23 percent of MBI participants are enrolled in any one of the four other programs.
Income limits of state MBI programs are associated with participant use of other work incentive programs. For example, participants in Nebraska are the biggest users of work incentive programs, likely because the state has no unearned income limit, suggesting that when participants have no programmatic constraints to their income, they take advantage of the supports available to them to earn more. In contrast, those participants in New Mexico, Missouri, and Iowa use the programs the least because those states do not have, or do not enforce employment requirements.
II. Quantitative Findings: Employment
Naturally, many of the findings that relate to increased earnings are also true for employment and number of hours worked. For example, the same design features that are associated with increased participant earnings—short grace periods, high income limits, and work verification policies—are also associated with more hours worked.
MBI participants work, and work more than before enrollment or as compared to control groups. Nationally, the average employment rate of all MBI participants stood at 69 percent in 2006 and, while this is a decrease from 83 percent in 2001, this was due to the implementation of new state programs with more relaxed work requirements. The employment rates of MBI participants range from a low of 40 percent in Iowa, to a high of 100 percent in Rhode Island.
Data from relevant state evaluations provides a more nuanced view of the impact on employment of the MBI program on participants:
Iowa
Employment: While 83.5 percent of participants work for pay, 39 percent of those enrollees work between two and 10 hours per week (with an average of seven hours). Employment outcomes have remained fairly steady between 2004 and 2009.
Kansas
Employment: The proportion of people with disabilities working an hourly wage per week stayed the same between 2004 and 2007.
Massachusetts
Employment: While there is no comparison group, state administrative data reveal that participants worked an average of 91 hours per month (24 hours per week) from 2003 to 2006. A one-month (June 2004) snapshot of 6,190 participants reveal that 40 percent work between 40 and 79 hours per month.
Michigan
Employment: Average hours worked per week increased from 17 hours worked before enrollment to 20 hours post-enrollment, according to self-reported data by 105 survey respondents that were enrolled in the program as of October 2005.
Notes: 29 percent of survey respondents were unaware of their enrollment. This population worked significantly more hours, post-enrollment, than respondents who were aware of their involvement with the program.
Nebraska
Employment: As of the survey date of October/November 2006, 72 percent of current MBI enrollees in Nebraska reported working more than 20 hours per week and 50 percent work between 21 and 30 hours on average.
Notes: All results are non-scientific, as fewer than 100 surveys were conducted. Also, 45 percent of former participants report working more than 20 hours per week, although only 38 of the 73 respondents answered this question.
New Hampshire
Employment: The employment rate of participants increased from 45 percent in the 12-month period prior to enrollment to 80 percent in the year after enrollment.
Washington State
Employment: Participants with prior Medicaid coverage worked 42 percent more hours per year than the control group: 652 versus 459 hours.
Notes: The results for participants without a prior history with Medicaid are even more significant. Those participants worked 135 percent more hours per year than a matched control group (720 versus 306).
As with earnings, hours worked remain low and some participants are not working. The SSDI cash cliff appears to be a factor in keeping work hours relatively low among MBI participants. For instance, in Kansas, the average MBI participant works between 10 and 29 hours per week. However, more than 20 percent of enrollees report that they turned down hours to stay under the SGA limit. In Michigan, 70 percent reportedly had turned down a raise or an increase in hours to stay under the SGA limit and 83 percent had turned down another job offer.
Some states’ employment outcomes are influenced by how they define work. Wisconsin accepts in-kind employment—work that may result in payment other than money, and that is not reported to the state’s revenue department–to satisfy its program’s work requirement and that type of employment results in no recorded earnings.
Design features of state programs influence employment outcomes. The same eligibility guidelines associated with increased earnings—1) short grace periods, 2) income floors and/or ceilings, and 3) work verification policies—are also associated with increased employment. As a result of state decisions regarding these policies, analysis of 2002 data reveals that 93 percent of Indiana’s participants worked for wages as compared to 25 percent in New Mexico.
Gimm et al’s prolific study assigns a numeric influence to these state eligibility guidelines and their impact on an individual’s employment. A participant in a state with:
- a high earned income limit is 26 percent more likely to be employed than a participant in states with lower limits;
- a strict grace period is 37 percent more likely to be employed as the grace period length decreases; and
- a work verification system is 27 percent more likely to be employed than if they lived in a state without a verification system.
The influence of these eligibility guidelines is also apparent in results of state evaluations. For instance, Massachusetts maintains its work requirement—or income floor—of 40 hours per month. Critics of income-floor policies fear that states with these limits exclude persons with disabilities who are trying to enter or re-enter the employment market, but cannot yet work many hours. Proponents of the concept, however, hope that individuals will increase hours to gain access to the MBI program. The latter scenario appears to have occurred in Massachusetts. The state’s evaluators analyzed the frequency in hours worked by participants and noticed a clustering around the 40-hour minimum, suggesting that participants increase their hours worked to meet that threshold. Furthermore, the penetration rate (number of persons enrolled per 1,000 residents) in the Massachusetts program ranks 9th in the country out of the 28 existing state programs in 2004, suggesting that the program and its criteria make it accessible to persons with disabilities in the state.
In contrast, Kansas’ evaluation revealed that, in 2007, the second most common sector of employment status for MBI participants was “off of work due to medical leave.” This state’s grace period allows for gaps in employment, resulting in Kansas’ program attracting participants likely to take leave from work due to complications of their disability.
III. Quantitative: Other Notable Findings
In most states, MBI enrollment has increased at rates higher than anticipated. Yet, not all potential participants are enrolled. Between 2001 and 2006, MBI enrollment nationwide more than tripled, from 29,398 to 97,491 participants. In some states, enrollment exceeded expectations at a rapid rate. Upon implementation of its program in 2002, Kansas projected that approximately 50 to 75 persons would enroll in the first year. Instead, 247 enrolled in the first month alone. Many states experienced brisk growth in the first four years, with that growth tending to level off in subsequent years.
Yet,even with robust early enrollment, reaching the total population of MBI-eligible participants remains a challenge. Analysis in some states show a significant gap between actual enrollment and the population who may be eligible for the program. In New York, 5,677 persons were enrolled in New York’s MBI Program in 2007, yet analysis of American Community Survey data reveals that more than 472,000 persons were potentially eligible in the state. New Hampshire’s evaluation revealed that, despite strong enrollment growth, its program still has room to develop. Some of the state’s residents are enrolled in Medicaid, are employed, and yet are not enrolled in the MBI program.
Participants experience improved health outcomes and the health care access and attention they need.Although Kansas’ evaluation could not decisively conclude that the state’s MBI program encouraged participants to work more, it did find that it enabled participants to access the critical health services they need. Also, early results from much-anticipated experimental studies, those encompassed in the Accelerated Benefit Demonstration, also show participants experiencing improved health outcomes.
Furthermore, work appears to help participants’ mental health. In Kansas, 59 percent of Working Healthy participants reported improved mental health status. A critical reason for this is participants’ improved or maintained financial status, as well as community and social involvement. Financial stability and the social and community connectedness that employment brings are two critical factors that contribute to better mental health.
Premium structures of state MBI programs vary drastically. The very name of the Buy-In program would lead people to believe that all participants pay a premium to access Medicaid. However, as with most of the program characteristics discussed, the proportion of enrollees paying premiums varies dramatically across states. In Michigan in 2006, no single participant paid a premium because the threshold for premium payment was set at 250 percent of the federal poverty threshold (approximately $48,000 at the time). Most enrollees were SSI/SSDI recipients prior to the program and remain cash beneficiaries; it would likely take an extensive period of time for enrollees to earn that income and remain enrolled. At the other end of the spectrum, Washington State’s MBI participants pay an average of $90 per month in premiums; premium amounts are primarily determined by a sliding income scale, helping to ensure that participants are not unduly burdened by this expense.
IV. Qualitative Findings
Anecdotal accounts support the notion that MBI participants view the program as critical to their ability to work and sustain earnings. Yet, barriers for increased work and earnings remain. Participant surveys and focus groups reveal that there are powerful emotional factors encouraging employment among persons with disabilities. For example, in Michigan, participants say that the number one reason for working is not to earn money or maintain healthcare but rather, “I feel good about working.” The same is true in Iowa, where 95 percent of survey respondents say that they work because they feel good about it.
Yet qualitative evidence suggests that the MBI program and other efforts to support employment among persons with disabilities may not be enough. In Iowa, 75 percent of survey respondents agree or strongly agree with the statement, “If I could, I would work more.” While respondents’ inability to work more is likely tied to the limitations of their disability, the SSI/SSDI SGA “cash cliff” again plays a factor. Kansas participants claim that if the SSI/SSDI rules changed, in terms of increasing the allowable income of SGA, those enrolled would increase their hours worked. External factors also influence work attitudes. National analyses shows that state unemployment rates are not associated with the employment rates of that state’s MBI enrollees. Yet state evaluations, such as Iowa’s, reveals that poor economic conditions affect the likelihood that persons with disabilities will seek employment.
Other reasons for avoiding the employment market range from risk aversion (in terms of negotiating continued receipt of SSI or SSDI cash benefits), employer attitudes, agency distrust, and the complications of their disability. All of these factors make work a less attractive option for persons with disabilities. In Michigan focus groups, those receiving disability payments said that there is a comfort and security in knowing that disability payments are coming each month.
Similar sentiments were voiced across states, including Massachusetts and Wisconsin. In the latter, participants report that the top two reasons that prevent them from working, or working more, are poor mental and/or emotional health and physical limitations. These barriers not only hurt the chances of participants gaining employment, they influence their likelihood of maintaining employment. A national study of program disenrollees shows that 43 percent of all first-time enrollees have left the MBI program, and it appears that most of these participants left because of a job loss.
Yet, there is a strong drive for MBI participants to return to work, even after they become more disabled. Although “disability worsening” was the number one reason for Kansas’ MBI participants leaving a job, most did return to work within a six-month time frame. Future work intention appears to vary based on an MBI enrollee’s primary disabling condition. In Massachusetts, those with a mental illness were one and a half times more likely to expect that they would work again, than were those with a physical disability.
Unfortunately, MBI program representatives do not always encourage participants to work. In the case of Kansas, participants report that service providers are not encouraging of employment because (it is participant perception that) they think that individuals with disabilities lack the ability or capacity to work. If representatives of the MBI program do not embody the tenets of the program and encourage involvement in the workforce, it may inhibit participants from working at their maximum capacity.
Program complexity is a significant barrier faced by current and prospective enrollees alike. While it is unclear whether the program truly is too complex, or whether it is a factor of poor outreach and communication strategies, it appears from evaluations that the MBI program confuses its intended service population. Both anecdotal and statistical survey accounts from state evaluations strongly support this claim. In Wisconsin, recipient surveys reveal that the complexity of the MBI program is a barrier to enrollment, particularly when it comes to eligibility requirements. Those who are enrolled do not fully understand the program and its parameters, and this lack of understanding results in participants not taking full advantage of it.
Understanding does not necessarily increase with time spent in the program. Anecdotal evidence from Wisconsin revealed that some participants were unaware that they were even enrolled in the program, confusing MBI with Medicaid. In Michigan, 29 percent of survey respondents did not even know they were enrolled in that state’s Freedom to Work/MBI program — these participants also confused the MBI program with standard Medicaid. Some of these individuals expressed anger with being unknowingly enrolled in a program and not giving express consent for that enrollment.
Participant confusion with the MBI program is less surprising when compared to the country’s general understanding of government programs. This is particularly true for health care programs. For instance, in a survey of Floridians with disabilities, respondents were asked to identify how they access medical care. Medicaid dominated the responses, but 50 percent failed to answer the question — they either do not have access or do not know how they obtain the healthcare that they do have.
Lack of state-level capacity decreases efficiency, because some design features cannot be enforced. Also, distrust of state agencies inhibits participants from seeking assistance. The perceived complexity of Medicaid and the additional layers of income and other eligibility elements of the MBI program daunt participants. States have built in communication mechanisms to mitigate this complexity and to increase understanding, but there is too often a breakdown in implementation. For instance, Wisconsin does not have the resources to support the features of its program that encourage participants to work, the entire purpose of the MBI program. While the state has a work verification feature, an inability to enforce it allows individuals to access the MBI program even when not complying with the state’s employment requirements. Next, its Health and Employment Counseling program, intended to help unemployed MBI participants to find work through vocational services within nine (and at most 12) months, is under-funded and underutilized.
This breakdown is often a factor of a consumer lack of awareness, or of agency mistrust. For instance, only 24 percent of Nebraska’s MBI participants report using the website resource of that state and, in Kansas, the state’s evaluation found that MBI participants do not trust vocational and work force centers to help them find work; instead, they are searching for employment via traditional, less targeted methods (i.e. through friends or job postings in newspapers). Similarly, participants enrolled in Michigan’s program expressed a strong distrust of communication with the program’s on-the-ground staff. Only 33 percent found the rules of the program to be clearly explained.
Summary: Lessons Learned
There is a trade-off between the security and positive benefits associated with continuous enrollment in the MBI program, and higher employment and earnings averages of the participant population. While shorter grace periods are the design feature most strongly associated with these improved outcomes, longer grace periods are associated with continuous enrollment. In turn, continuous enrollment is linked with an increased sense of financial security and improved long-term income. For example, in Wisconsin, continuous and long-term enrollment is correlated with an increased sense of financial security, decreased fear of losing medical benefits, and an increased presence of earned income.
Evidence of this tradeoff is certainly present across the country. Upon disenrollment from the MBI program, there is a high likelihood that many former participants lose critical health care coverage. Several states have found that job loss, rather than a substantive increase in earnings, is the primary reason participants leave the MBI program. National analysis shows that approximately half of those that leave the program have no positive earnings, and 22 percent are not covered by either Medicaid or Medicare. More research is needed to explain why exactly this population experiences a gap in their medical coverage. However, the current results suggest that more coordination with the Medicaid system is likely needed to ensure continuous medical care to MBI participants that abruptly lose their job in states without grace periods in their programs. MBI participants in Iowa reinforce the concept that more information and/or more coordination is necessary: 68 percent of that state’s participants report that, if it wasn’t for the MBI program, they either did not know how they would access medical care or they would go without.
There are numerous barriers to employment for persons with disabilities and MBI cannot solve issues such as biased employer attitudes and worsening disabilities. Also, the MBI program must contend with the often overwhelming concern exhibited by participants about losing their benefits. There is a certain “comfort” with knowing that an SSDI/SSI payment is coming each month. Sometimes increased income is not worth the increased risk of employment in the labor market.
Two marketing/operational decisions can improve the likelihood of participants earning more: targeting younger participants, and improving linkages to other SSI work incentive programs. Changing the MBI program design is one path to increasing the earnings profiles of participants. For example, states can shorten grace periods and institute strict work verification policies. Yet the reality of these design decisions is that they leave more persons with disabilities with the difficult decision to choose between working for employment and critical health care. States who wish to see improvement in their earnings and employment profiles can instead reach out to younger participants, who have been shown to work and earn more. States can also find more effective ways to encourage use of the SSA’s other work incentive programs among participants. These programs have been shown to effectively increase earnings when utilized with the MBI program; states with higher-than-average numbers of participants using work incentive programs have more enrollees earning above the SGA threshold.
States can recoup some of the costs of MBI programs, increasing support for the program, if premium structures are properly designed. Costs incurred by the state of the MBI program can be directly recouped in two ways: premium payments and increased income tax revenue. Some states have capitalized upon a premium structure in more effective ways than others. For instance, while Washington State participants pay an average premium of $90 per month, no participants in Michigan have yet paid a premium because the income threshold at which premium requirements kick in is quite high.
Some states, recognizing missteps in premium design, are rethinking payment structures. Wisconsin, noticing a decrease in participants paying a premium, decided to explore alternative premium structures to help defray their program costs. Two options explored were to institute a $25 premium for all participants, or to create an MBI “Plus” program with a mandatory premium. This enhanced MBI program option would remove the income and asset limits that are part of the current, base program. In Michigan, the state is exploring establishing a premium structure that reflects the influence of the SSI/SSDI cash cliff—in other words, a structure that would require MBI participants of lower income, and potentially beneath the SGA level, to pay a premium.
Almost universally across states, programs should improve state-level capacity for program communication and support strategies. States with low penetration rates (the number of MBI enrollees per 1,000 residents) can follow New York’s lead and perform a needs assessment using Census or other demographic and income data. And, like that state, they can geographically tailor MBI marketing material to increase participation among those eligible, but unaware of the program.
Also, a state’s focus does not necessarily have to be on increasing enrollment numbers — rather, the goal can be improving program understanding and utilization of those already enrolled. Increasing clarity and decreasing complexity will only encourage progress towards MBI’s chief program goals. The more complex the design of a state’s MBI program, the more risk participants perceive. As observed with the SSDI cash cliff, we are aware that perception of risk of losing benefits results in lower employment and earnings outcomes for persons with disabilities.
States can learn from each other when it comes to effective ways to communicate the complex structure of the MBI program “on the ground”. Kansas’ evaluation shows that a high number of participants (63.3 percent) report a strong understanding of the program and this clear communication outcome is accredited to the state’s caseworkers in charge of social and rehabilitative services eligibility.
Some agencies, as compared to others, are regarded as more favorable sources for information and states can capitalize on this consumer preference. In Michigan, participants view Centers for Independent Living as dependable resources for information, as compared to other agencies. And, while Kansans often fail to use the vocational services and workforce centers intended to help them find work, the state’s Working Healthy “benefit specialists” have proven a helpful, albeit scarce with just seven statewide at the time, resource for MBI participants.
Implications
In conclusion, evaluations of the MBI programs suggest that the programs have facilitated some increases in earnings for people with disabilities and helped more people enter the labor market without losing the critical health services that they need. Looking across the country, MBI participants have widely varying employment and earnings profiles, and this variation is strongly associated with how states implement and execute their programs. For example, we know that states with higher asset limits attract participants who are more financially stable and so likely to succeed in the job market, as opposed to states with restrictive asset limits.
The eligibility criteria reflect just part of the policy decisions that states must make as they create or refine their MBI programs. For example, are states realizing revenue from increased income taxes paid by persons with disabilities? Is the premium structure for the MBI program realistic, in that states are able to recoup some of their expended costs? And are states providing critical vocational supports to participants in order to perpetuate earnings and employment successes? State MBI programs are beginning to produce these outcome measures and focus on the “wrap around” services that those participants with significant disabilities need. Focusing on these key issues of program sustainability and capacity is an important next step in supporting the promising improvements realized thus far.
At the same time, the MBI programs must contend with a number of barriers to employment that persons with disabilities continue to face. The most challenging is the SSDI “cash cliff” that prevents MBI participants from earning more than the SSA’s Significant Gainful Activity level and losing the associated cash benefits. Encouraging MBI participants to take the “risk” of employment is a difficult task, given the uncertainty of the labor market, the arduous approval process of receiving SSI or SSDI cash benefits in the first place, and the strong sense of comfort and certainty that participants associate with the monthly cash benefit. Strategies to circumvent the cash cliff factor have emerged from state MBI programs, including higher levels of coordination with other SSA’s work incentive programs and targeting participants that are younger and/or have not previously been SSDI recipients.
This review scanned the majority of MBI evaluations that have been produced at both the state and national level. The evaluations identified best practices as well as lessons learned about program elements that may have unintended consequences. Although most of these studies were not experimental in design, some states did conduct quasi-experimental evaluations to measure program effects. Both the promising practices and ineffective ones should be considered when attempting future redesigns or for states considering implementation of an MBI program. Additionally, true experimental studies—most of which are focused on particular subsets of persons with disabilities–are underway across the nation. The outcomes of these studies, many of which will produce final reports in 2011, are expected to clarify: 1) whether there is causation between participation in MBI programs and improved outcomes in employment and earnings and 2) whether additional, critical support services make substantial differences in employment and earnings outcomes. Particularly anticipated are the results of the Demonstration to Maintain Increased Employment (DMIE), which are expected in 2011. The outcomes of these demonstrations could provide much needed experimental evidence of MBI programs’ impact.
Implemented in four states (Kansas, Minnesota, Texas, and Hawaii), the results of the DMIE will provide information about how MBI program elements affect participants’ health, employment, and earnings outcomes, as well as their reliance on SSI/SSDI cash benefits. Although each demonstration targets different populations with varied services, the sites have committed to collecting standardized data that will inform Mathematica’s Uniform Data Set (UDS). The interventions embodied in the DMIE represent an evolution in the MBI program towards a more targeted and comprehensive range of services, as opposed to assuming that one program structure can fit for all individuals with a disability.
Going forward, there are several additional areas where the study of MBI programs could be strengthened:
The trends and characteristics of persons with disabilities who are self employed. States are only given the option of reporting the self-employment income of MBI participants — the federal CMS system does not require such data. However, rates of self-employment are higher for persons with disabilities than for the general population; in Iowa, 49.2 percent of participants report that they are self-employed. Because this population is not as effectively captured through the FICA and UI systems, research on how the self-employed are faring in the labor market is weak.
Improved collection and analysis of self employment data could lead to a better understanding on how to best encourage persons with disabilities with this type of employment. The current lack of data is particularly detrimental because self employment is a viable option for persons with disabilities, particularly in rural regions. Best practice information about how we can support enterprise development among persons with disabilities, especially in rural areas may help to increase employment opportunities for individuals with disabilities.
How participation in the MBI program influences participants’ payments of taxes and/or dependence on other social support services, such as SNAP. A Mathematica study of all Buy-In programs in the nation found that participants who are working seem to require fewer services or a less expensive mix of services than other disabled Medicaid enrollees of similar age. At the state level, some states have also explored these issues with promising results.
More comprehensive evaluations, like Washington State’s of the MBI program’s “ripple” effects and cost offsets could strengthen the benefit side of the cost/benefit argument. Going forward, these studies will be increasingly facilitated if progress can be made in integrating databases, allowing researchers to examine costs and benefits across different federal programs.
Impact of and coordination with other policies and programs targeted to populations with disabilities. Regarding existing policies and practices, analysis could determine the extent to which reimbursements and/or restrictions placed on employment supports, such as personal care assistance, influence the amount that a person with a disability works or earns. Also, additional sensitivity analyses could help determine how provisions in the new healthcare legislation will impact employment and earnings incentives for persons with disabilities.
More cohort studies to determine the long-term impact of the MBI program. Longitudinal research—and ideally an experimental study–of younger MBI participants could inform how the program affects their employment outcomes over time. Historically, these types of studies have been difficult. Unless expressly designed as a panel study (one where the same survey respondents are followed over time), it is challenging for states to follow a cohort and gather information through survey methods. For example, Wisconsin, when attempting to gather data on a cohort through a follow-up survey, only collected 87 responses from the 1,322 participants who completed the initial survey. Such poor follow-up rates yield little usable information.
As states’ MBI programs become more established, and as health care reform unfolds with the guarantee of health coverage for people with critical health care needs, it will be important to continue learning from MBI programs. Information from future evaluations should be used to inform policy considerations about how best to structure programs and incentives to facilitate increased earnings and employment for people with disabilities who want and are able to work.
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APS Healthcare for WI, Office of Independence and Employment. Wisconsin Medicaid Purchase Plan Evaluation 2008 Annual Report. Madison:, Department of Health Services, 2009.
Healthcare for Workers with Disabilities: Supporting and Encouraging Employment. (April 2009) Melissa Ford Shah, MPP, David Mancuso, PhD, Lijian He, PhD, Sharon Estee, PhD, and Barbara E.M. Felver, MPA, MES, In collaboration with the Health and Recovery Services Administration Doug Porter, Assistant Secretary, Steve Kozak, HWD Program Manager. Funded by the Centers for Medicare and Medicaid Services Medicaid Infrastructure Grant Program CFDA 93.768. Accessed October 31, 2009: www.dshs.wa.gov/pdf/ms/rda/research/9/96.pdf
Liu, S., and Weathers, B. Do participants increase their earnings after enrolling in the Medicaid Buy In program? Princeton: Mathematica Policy Research, Inc., 2007.
Participants with no earned income excluded from analysis. Gimm, G., Davis., S.R., Andrews, K.L., Ireys, H.T., and Liu, S. The Three E’s: Enrollment, Employment, and Earnings in the Medicaid Buy-In Program, 2006. Washington, DC: Mathematica Policy Research, Inc., 2008.
Healthcare for Workers with Disabilities: Supporting and Encouraging Employment. (April 2009) Melissa Ford Shah, MPP, David Mancuso, PhD, Lijian He, PhD, Sharon Estee, PhD, and Barbara E.M. Felver, MPA, MES, In collaboration with the Health and Recovery Services Administration Doug Porter, Assistant Secretary, Steve Kozak, HWD Program Manager. Funded by the Centers for Medicare and Medicaid Services Medicaid Infrastructure Grant Program CFDA 93.768. Accessed October 31, 2009: www.dshs.wa.gov/pdf/ms/rda/research/9/96.pdf
Latest MPR mental illness brief.
Liu, S., and Weathers, B. Do participants increase their earnings after enrolling in the Medicaid Buy In program? Princeton: Mathematica Policy Research, Inc., 2007.
Wisconsin Medicaid Purchase Plan Evaluation 2004 Annual Report. APS Healthcare for WI, Office of Independence and Employment, Department of Health Services, 2005.
Kurth, N., Falle, E.C., and Hall, J.P. Working Healthy Data Chartbook: Evaluation of the Kansas Medicaid Buy In 2002-2007. University of Kansas Center for Research on Learning, Division of Adult Studies, 2008.
See Liu, S., and Weathers, B. (2007).
Participants with no earned income excluded from analysis. Gimm, G., Davis., S.R., Andrews, K.L., Ireys, H.T., and Liu, S. The Three E’s: Enrollment, Employment, and Earnings in the Medicaid Buy-In Program, 2006. Washington, DC: Mathematica Policy Research, Inc., 2008.
SSI recipients must make less than the SGA monthly amount at the time of award approval. For the remainder of the time they receive SSI, they can exceed the SGA level, but must remain within SSI’s income and asset limits. SSDI recipients, however, must keep their earnings below the SGA level for the entirety of the time they receive benefits. There are exceptions to this, as embodied in other work incentive programs, so as to encourage SSDI recipients to return to work. These programs are discussed further in the body of the paper.
White, J.S., Black, W.E., and Ireys, H.T. Explaining enrollment trends and participant characteristics of the MBI Program, 2002-2003. Washington, DC: Mathematica Policy Research, Inc., 2005.
See Wisconsin Medicaid Purchase Plan Evaluation 2004 Annual Report.
See Gimm, et al (2008).
Ibid, and see White, et al (2005). Also, state evaluations results corroborate the impact of these design features.
See U.S. Department of Labor guidelines, available at http://www.dol.gov/whd/minwage/america.htm. Accessed September 14, 2010.
Ellison, M.L., Olin, L., Hashemi, L., Sanmaliev, M. Evaluation fo the 40 Hours per Month Work Requirement for MassHealth’s CommonHealth Working Program. Shrewsbury, MA: UMass Medican School Center for Health Policy and Research, 2008. Connecticut’s average MBI participant earned $770 in 2006 and New Hampshire participant earnings averaged $720 in that year.
See Gimm, et al (2008).
Ibid.
Shah, M.F., Mancuso, D., He, L., Estee, S., and Felver, B.E.M. Healthcare for Workers with Disabilities: Supporting and Encouraging Employment. Washington State Department of Social and Health Services Research and Data Analysis Division, 2009.
See Gimm, et al (2008) and Gimm, G., Ireys, H., and Johnson, C. Who are the top earners in the Medicaid Buy In program? Washington, DC: Mathematica Policy Research, Inc., 2007.
See Gimm, et al (2007).
See Gimm, et al (2008).
See Gimm, et al (2007).
WA participants with prior Medicaid coverage increased earnings 39 percent (from $5,136 to $7,126); those without increased earnings by 136 percent (from $3,860 to $9,129). See Shah, et al (2009).
Liu, S. and Croake, S. How are the experiences of individuals with severe mental illness different from those of other Medicaid Buy-In participants? Princeton, NJ: Mathematica Policy Research, Inc., 2010 and Ireys, H.T., Davis, S.R., and Andrews, K.L. The Interaction of Policy and Enrollment in the Medicaid Buy-In program, 2005. Washington, DC: Mathematica Policy Research, Inc., 2007. This prevalence is also reported in state evaluations in Iowa, Kansas, Massachusetts, Michigan, and Wisconsin.
See Liu and Croake (2010).
Commonwealth Medicine Center for Health Policy and Research. Evaluation of the Medicaid for Employed Adults with Disabilities (MEAD) Program: February 1, 2002 though June 30, 2005. Shrewsbury, MA: University of Massachusetts, 2006 and Henry, A.D., Hooven, F., Hashemi, L., Banks, S., Clark, R., Himmelstein, J. Disabling conditions and work outcomes among enrollees in a Medicaid buy-in program. Shrewsbury, MA: UMass Medical School Center for Health Policy and Research, 2006.
See Gimm, et al; New Hampshire’s evaluation, Commonwealth Medicine Center for Health Policy and Research (2006); and Henry, et al (2006).
See Shah, et al (2009).
Ibid.
See New Hampshire evaluation, Commonwealth Medicine Center for Health Policy and Research (2006).
See Kurth, et al (2008).
Capstone Consulting Group. Michigan Freedom to Work–Medicaid Buy In report. Lansing: Michigan Department of Community Health, 2007.
See Liu and Weathers (2007).
Andrews, K., Weathers, B., and Liu, S. How do Medicaid Buy In participants who collect SSDI benefits use SSA work incentive programs? Princeton: Mathematica Policy Research, Inc., 2007.
Ibid and Gimm et al (2008).
See Gimm, et al (2009).
See Michigan’s evaluation, Capstone Consulting Group (2007).
APS Healthcare for WI, Office of Independence and Employment. Wisconsin Medicaid Purchase Plan Evaluation 2008 Annual Report. Madison:, Department of Health Services, 2009.
Gimm, et al (2007) and Gimm, et al (2008).
See Gimm et al (2007).
See Gimm, et al (2008).
The largest proportion of enrollees (39.8 percent) work between 40 and 79 hours per month, and 47 percent earn more than the SGA threhsold. See Ellison, et al.
Ibid. Also, see Black and Ireys (2006) for data regarding buy-in enrollment per 100,000 state residents.
See Kurth, et al (2008).
See Gimm et al (2008).
See Kurth et al (2008).
Erickson, W., Golden, T., and Lopez-Soto, E.J. Expanding utilization of the Medicaid Buy In for working people with disabilities in New York State. Ithaca: New York Makes Work Pay, Cornell University Employment and Disability Institute, 2002.
See Kurth, et al (2008).
Gimm, G., Denny-Brown, N., Gilman, B., Ireys, H.T., Anderson, T. Interim Report on the Demonstration to Maintain Independence and Employment. Washington, DC: Mathematica Policy Research, Inc., 2009.
See Michigan’s evaluation, Capstone Consulting Group (2007).
See Washington’s evaluation. Shah, et al (2009).
See Kansas’ evaluation. Kurth, et al (2008).
See Gimm, et al (2008).
Iowa Department of Human Services. Medicaid for Employed People with Disabilities: 2009 Member Profile and Evaluation. Iowa Department of Human Services, Division of Results Based Accountability, 2009.
See Michigan’s evaluation. Capstone Consulting Group (2007).
See Liu and Colman (2009).
See Kansas’ evaluation. Kurth, et al (2008).
Wisconsin Medicaid Purchase Plan Evaluation 2004 Annual Report. APS Healthcare for WI, Office of Independence and Employment, Department of Health Services, 2005.
See Nebraska’s evaluation. Munroe-Meyer Institute, University of Nebraska Medical Center, University Center of Excellence for Developmental Disabilities (2007).
See Kansas’ evaluation. Kurth, et al (2008).
See Michigan’s evaluation, Capstone Consulting Group (2007).
Wisconsin Medicaid Purchase Plan Evaluation 2004 Annual Report. APS Healthcare for WI, Office of Independence and Employment, Department of Health Services, 2005.
These state studies include Louisiana, Kansas, Massachusetts, Minnesota, and Wisconsin. Also, see Liu and Colman (2009).
See Iowa’s evaluation. Iowa Department of Human Services (2009).
Between 2002 and 2008, the percentage of premium-paying participants decreased from 13 to 6.3 percent (although, due to enrollment growth, the total amount of premiums collected has increased). Wisconsin Medicaid Purchase Plan Evaluation 2004 Annual Report. APS Healthcare for WI, Office of Independence and Employment, Department of Health Services, 2005.
See Michigan’s evaluation. Capstone Consulting Group (2007).
At the time of the evaluation, there were only seven benefit specialists serving the entire state of Kansas. See Kurth, et al (2008).
See Iowa’s evaluation. Iowa Department of Human Services (2009).
Gimm, G., Andrews, K.L., Schimmel, J., Ireys, H.T., and Liu, S. Analysis of Medical Expenditures and Service Use of Medicaid Buy-In Participants, 2002 — 2005. Washington, DC: Mathematica Policy Research, Inc., 2009.
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