Medicaid Coverage for Working People With Disabilities

Today, more than 10 million people in the United States qualify for Medicaid because of a disability. This government assistance program, in place since the 1960s, helps cover the cost of medical care for those living on low income.

However, Medicaid’s strict rules place people with disabilities who want to work in a quandary. To maintain their benefits, they cannot earn over a certain amount. So, they may end up forgoing employment altogether as the only way to keep their Medicaid benefits.

Who Qualifies for Medicaid?

About a third of disabled Medicaid recipients qualify for the program automatically because they already receive Supplemental Security Income (SSI). As a means-tested program, Medicaid requires that all applicants, regardless of disability status, have limited means to qualify. In most states, the limit on income and assets is $2,000, although there are certain exceptions.

Medicaid recipients whose assets exceed this threshold in a given month may no longer qualify for these benefits. This situation can put many people with disabilities between a rock and a hard place. Even if they want to work, they may not do so for fear that any job earnings will cause them to lose the health coverage on which they rely.

Medicaid Buy-In Programs

In 2014, the Affordable Care Act (ACA) came into force, expanding Medicaid access for hundreds of thousands of people.

Because Medicaid is a joint federal-state program, each state has the flexibility to administer the program somewhat differently. So, even before the ACA, some states were allowing people with disabilities who were working to buy into Medicaid. They could do this even if their wages put them over Medicaid’s customary income threshold. This little-known program was giving adults with disabilities the chance to earn a living and benefit from Medicaid.

Today, some form of Medicaid buy-in program exists in almost every state. The rules vary from state to state, and each state may call this kind of program by a different name. In general, however, a person must meet the federal definition of “disabled” and currently be working to qualify. Certain states, such as Minnesota, do not have any income limit in place for this type of program.

Some individuals who qualify for a Medicaid buy-in may also receive Medicare or health insurance through their employer. Their Medicaid coverage then serves to supplement services that their other forms of insurance may not cover. Medicaid may also help them with premium payments.

States typically charge premiums for Medicaid buy-in recipients. These costs are almost always lower than what it would cost to purchase health insurance from a private insurance company. Certain states have resource limits that prevent people who have a great deal of money saved up from qualifying for buy-in services.

Medicaid buy-in services may not be for everyone. Under the ACA, individuals who earn less than $58,320 a year may receive subsidies to help them pay for private insurance. (A family of four can earn up to $120,000 and receive subsidies.)

People with lower incomes can also qualify for premium and co-pay assistance with their private health plans. Some other low-income adults may be able to receive expanded Medicaid (if they live in states that have pursued Medicaid expansion) without having to meet the stringent asset requirements of Medicaid buy-in programs.

The Benefits of Buying Into Medicaid

Across all age groups, adults with disabilities face far higher unemployment rates than those without a disability. The option to buy into a state’s Medicaid program gives these individuals access to health care while they earn a living.

Increased employment and improved economic stability for people with disabilities is not the only upside. One report shows that Medicaid buy-in programs also positively impact the economy, employers, and state Medicaid agencies. In addition, Medicaid may cover important health services that the worker’s employer-sponsored or private health plan does not.

Work With a Special Needs Planner

If you are currently working and have a disability, talk with a special needs planner. They can help you to determine whether your state has a Medicaid buy-in program and if it may be appropriate for you.