In an effort to bring down the cost of enrollees with disabilities in Medicaid, Kansas and Tennessee officials are seeking waivers from the CMS that would allow them to take advantage of a little-known federal policy called the Medicaid Buy-In program.
The program, authorized and expanded by the Balanced Budget Act of 1997 and the Ticket to Work and Work Incentives Improvement Act of 1999, allows states to expand Medicaid coverage to workers with disabilities whose income and assets ordinarily would make them ineligible. The states hope the move would increase income tax revenue and reduce demand for social services.
Nationally, non-disabled adults received about $4,391 in benefits, while disabled beneficiaries are estimated to have received an average of $17,352 in benefits in 2013, according to CMS data.
Over the past decade, more than 400,000 individuals with disabilities have taken part in the Medicaid Buy-In program across the country, according to the CMS. Total earnings among all Medicaid Buy-In participants in 2011 were about $1.15 billion.
“It is really encouraging that states, who choose not to expand Medicaid, are considering to support engagement in competitive employment for individuals with disabilities,” Dr. Arun Karpur, a research faculty member in the Employment & Disability Institute at Cornell University. “Many qualified individuals who are on public benefits are often concerned of the impact work may have on their ability to fall back on safety net services when things get to be difficult.”
A similar Medicaid-buy in program in New York resulted in substantial savings in healthcare expenditures for participants, Karpur said.
Both Kansas' and Tennessee's waivers offer disabled individuals job training and placement, and access to community and home-based medical benefits such as a personal-care attendant. Tennessee would allow disabled individuals with family income as high as 250% of the federal poverty level to get Medicaid services. Kansas didn't indicate it wanted to alter its current upper income threshold for its Medicaid buy-in program, which is up to 300% FPL for working individuals with disabilities.
The allowable income levels are notable. For context, the Affordable Care Act gave states the ability to expand Medicaid coverage to any individual with income up to 138% of the federal poverty level.
Kansas' waiver request was sent in as an amendment to its Delivery System Reform Incentive Payment (DSRIP) waiver already in place. Since 2002, the state has had a buy-in program for disabled adults that is modeled on a template outlined in the Ticket to Work legislation.
This new request addresses flaws the state believes beleaguer its current program. Those issues include the fact that it does not allow states to establish a definition of employment and has a maximum age limit of 65 years.
“The end result of these two requirements is that states must allow people making the most marginal income to enroll in Medicaid Buy-In programs, while at the same time excluding individuals willing to work past the age of 65,” state officials say in the waiver.
“Given that the intent of Medicaid Buy-In programs is to increase adult self-sufficiency and reduce reliance on government programs, allowing people with very low income into the program, and not allowing working people age 65 and over to remain in the program, is counterproductive,” the officials say.
The new waiver eliminates the age restriction and dictates that participants in the program must work a minimum of 40 hours a month, make federal minimum wage, and work in a competitive, integrated setting with non-disabled adults.
Disability advocates responded with skepticism and concern about Kansas' waiver and its definition of employment. Many disabled individuals may not have the stamina to work that many hours, and most often they are hired for to be part of daytime programs that keep the individuals active, but pay below minimum wage.
“That leads me to start thinking, 'Are they trying to limit the people eligible to participate (in the Medicaid buy-in program),” asked Craig Reaves, a Kansas City-based attorney who works with seniors and disabled individuals. “It's unclear if these individuals will be able to work 40 hours a month, or if there are many of these type of jobs for them out there.”
“Until I am convinced otherwise, I suspect only the most nefarious of ulterior motives from our state government,” added C. Eric Harkness, a member of the National Alliance on Mental Illness in Topeka, Kansas.
“(The waiver) lets people earn more money and keep their Medicaid coverage. I look at this as a positive thing,” said Scott Brunner, a senior analyst for Kansas Health Institute, a not-for-profit health policy and research organization.
A spokeswoman for Kansas' Medicaid agency said state officials wouldn't comment on the waiver request until it was approved.
Tennessee does not have a Medicaid buy-in program and seeks to establish one by amending its TennCare II waiver, which has been in place since 2002.
The waiver request is the culmination of more than 18 months of intense planning and discussion with stakeholders, including individuals with intellectual and developmental disabilities. The new program will be called Employment and Community First Choices.
“We're eliminating financial disincentives for people with disabilities to work and (the waiver) also eliminates over-reliance on government programs,” said Patti Killingsworth, assistant commissioner and chief of long-term services and supports for the Bureau of TennCare, the state's Medicaid program.
Even though the state has not expanded Medicaid, Killingsworth expressed optimism that the CMS wouldn't hold that against the state as it evaluates the proposal. The amendment meets HHS' overall goals of ensuring access to healthcare services.
The initiative has received a mixed response from one of the state's key disability advocates.
“I feel it's a good step for Tennessee to take,” said Wanda Willis, executive director of the Tennessee Council on Developmental Disabilities, an independent office in state government that advocates for disabled individuals. “If it comes to bear, people will get new supports and services they are not getting now.”
However, she expressed concern that managed Medicaid plans would be overseeing the initiative on behalf of the state as they have no known experience in working with disabled individuals in the way the waiver outlines.
The CMS sent notices to both states acknowledging receipt of the proposals and posted each for public comment. Comments on Kansas' proposal were due July 16 and comments on Tennessee's proposal are due Aug. 5.
