Over the years, Congress has created several alternative pathways for working people with disabilities to qualify for Medicaid benefits. Under Section 1905(q) of the Social Security Act, states are required to continue Medicaid benefits to people under age 65 who (a) have not recovered from the physical or mental impairment(s) that formed the basis of their eligibility; (b) need Medicaid coverage in order to continue working; (c) would otherwise lose Medicaid and SSI benefits due to earnings in excess of the SGA test; and (d) continue to meet other SSI and Medicaid eligibility requirements. These Medicaid beneficiaries are referred to as “Qualified Severely Impaired Individuals.” They are entitled to receive Medicaid coverage after the loss of SSI eligibility until they reach an income level the Social Security Administration considers sufficient to purchase “reasonably equivalent” health insurance coverage (or buy into Medicaid coverage) and, if required, pay for attendant care services.
The Balanced Budget Act of 1997 (P. L. 105-33) gave the states the option of allowing workers with disabilities to buy Medicaid coverage. States are allowed to charge such workers monthly premiums and impose cost-sharing requirements based on the worker’s income. To qualify for buy-in benefits, a worker must (a) meet the federal SSI disability definition and be eligible for SSI benefits if earnings are not taken into account; (b) have earnings that exceed the maximum amount permitted for the retention of Medicaid benefits by a “Qualified Severely Impaired Individual”; and (c) be a member of a family with net income below 250 percent of the federal poverty level (FPL). For a family of three in 2011, the income cutoff for the Medicaid buy-in option was $3,860 a month. States are permitted to use more restrictive methods of increasing buy-in income and resource thresholds.
The Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA) (P. L. 106-170) created two additional Medicaid buy-in options for working people with disabilities:
- Under Section 1902(a)(10)(A)(ii)(XV) of the Social Security Act, states may offer a buy-in option to working-age people (age 18–64) who would be eligible for SSI benefits except for their earnings. Income and asset tests, as well as the methodology for determining countable income and assets, are established by states electing this option.
- Under Section 1902(a)(10)(A)(ii)(XVI), states may elect to continue offering Medicaid coverage to working people with disabilities whose medical condition remains severe but who otherwise would lose SSI eligibility due to medical improvement as determined during a periodic continuing disability review. This option is limited to people who cease to be eligible for the first TWWIIA option due to medical improvement.
For both of the above TWWIIA options, states may impose premiums or cost-sharing requirements based on a sliding income scale. They may charge 100 percent of premiums to people with income between 250 percent and 450 percent of the FPL, provided such premiums do not exceed 7.5 percent of an individual’s income. States must charge TWWIIA enrollees with adjusted gross incomes of $75,000 or more 100 percent of Medicaid premiums, although a state may subsidize the premium with unmatched state dollars.