Why Tennessee Should Consider a Medicaid “Buy-in Program” for Workers with Disabilities

/ May 16, 2023

By Jennifer Hout

A person pursues a degree in a specialized field and becomes a successful executive at a large company. Meanwhile, their medical condition has progressed to the point at which they need support from a human being; they have exhausted all options using technology and adaptive equipment. In this situation, the support needed is not available from commercial insurance, even long-term care insurance. The support this individual needs is available only from Medicaid Home and Community Based Services. Access to those services requires Tennesseans to meet financial eligibility for Medicaid – which at its most generous is still about 250% of the federal poverty level or $36,450 for a household of one, annually.  (*See note below on ECF CHOICES ‘Working Disabled’.) Thus, people with disabilities who are in professional careers still face an impossible choice when they need HCBS: quit their jobs; don’t take promotions; spend down assets. In other states, people in these situations can “buy in” to Medicaid. This means they pay a portion of the cost of their health care costs, in proportion to their assets and earnings, but they have access to the unique supports that Medicaid offers. This led us to wonder: Why hasn’t Tennessee considered a Medicaid “buy-in program” for people like this?

Tennessee is one of only four states NOT participating in a Medicaid “buy-in program” to support the employment of workers with disabilities.  In contrast, the other 46 states offer these supportive Medicaid programs for workers with disabilities. Medicaid “buy-in programs” are an optional work incentive programs specifically designed for individuals with disabilities wanting to work or are working and under 65 years old.

As many of you know, Medicaid is a government-funded health insurance program for people with low income and limited assets. In Tennessee, it provides health care to mostly low-income pregnant women, parents or caretakers of a minor child, children and individuals who are elderly or those who have a disability. For many individuals with a disability, Medicaid is a necessity for their medical care and therapeutic support in everyday life. The health insurance benefits of Medicaid coverage for physical and mental health services, emergency care, therapeutic services, and medical equipment. Medicaid also provides Home and Community Based services to those enrolled in the state’s Medicaid waiver programs.

HCBS services are NOT generally available on commercial insurance markets. The only way for people with significant disabilities to buy these services is via Medicaid, which is the same argument that was successful for the 2019 creation of the state’s Katie Beckett waiver program for children.

For many individuals with disabilities, they receive Medicaid when they begin to get Supplemental Security Income. SSI is a federal program that provides monthly payments to people who have limited income and few resources who are 65 or older, as well as for those of any age, including children, who are blind or have disabilities. SSI requires that an individual’s and/or married couple’s assets must be no more than their state’s determined income limitations. Should an individual with a disability who is working earn income higher than pre-determined amounts, benefits can cease, and Medicaid can end. The fear of losing Medicaid discourages many workers with disabilities from seeking employment with higher earnings because their need for medical care and support services is a necessity.

Participants can ‘buy in” their Medicaid monthly coverage, typically set on a sliding scale determined by income. In exchange, the state government increases income eligibility for the worker with a disability with higher earnings. Although the basics of the program are the same, each state participating in a Medicaid “buy-in program” has their own rules for income limits, allowable assets, and monthly costs for Medicaid coverage.

Tennessee is one of the 35 states that provides Medicaid eligibility to people eligible for SSI benefits. In these states, the SSI application is also the Medicaid application, and the income and asset limits are identical.


Medicaid Buy-In Program Basics

Medicaid “buy-in programs” are not recent programs. The programs were written under Section 4733 of the Balanced Budget Act of 1997. The programs have two important goals. One goal is to offer for purchase health care coverage for workers with disabilities whose resources and income would otherwise result in them being financially ineligible for Medicaid. The second goal is to support employment incentives for workers with disabilities by allowing higher income earnings and personal assets without having to choose between employment or health care coverage. The increased income and personal asset limitation standards are more generous for workers with disabilities participating in Medicaid buy-ins when compared to traditional Medicaid rules.

To participate in Medicaid “buy-in programs,” disability determination is followed by the same definition that Social Security Administration uses to define disability or blindness. It is important to note that Medicaid “buy-in programs” are designed as a work-based program for individuals with disabilities. As such, a participant may work, maintain Medicaid coverage, and earn income from employment when actively enrolled in the program.

Importance of the Program

Research supports Medicaid “buy-in programs” as beneficial for workers with disabilities, businesses and employers, and Medicaid. The worker with the disability has more opportunities for work availability and income potential without the fears of losing medical coverage. The worker may seek career advancement and independent living because of increased income and community engagement. Businesses and employers hiring workers with disabilities will attract and retain loyal and productive employees, who won’t have to strictly limit work hours to keep their supports and services. And workers who may not be able to work a full 40-hour week could still have access to health care coverage.

The overall economy benefits when the disabled population has access to more employment opportunities. State revenue is increased. The labor force in the state is larger and more inclusive. Social service programs, such as the Supplement Nutrition Assistance Program, are less likely to be needed as an employee’s income increases. Medicaid has a reduction in overall costs.  In a study from the University of Kansas, workers with disabilities enrolled in Medicaid “buy-in programs” reported a better quality of life and less cost spent for Medicaid services. (https://ihdps.ku.edu/kansas-medicaid-buy-participants-continue-earn-more-and-cost-less) Participants in Medicaid “buy-in program” overall require less expenditure on Medicaid costs when compared to individuals with disabilities on Medicaid not enrolled in the “buy-in program.”

I would encourage you to talk with your state representative and senator as well as the governor and suggest that the time has come for Tennessee to join the other 46 states and implement a Medicaid buy-in program for Tennesseans with disabilities. TennCare could work with the Centers for Medicare and Medicaid Services to add this opportunity for our state’s residents with disabilities. Many individuals with disabilities desire to work. Our state is an Employment First state, and we’ve put a real emphasis on having people with disabilities in competitive, integrated employment. Working is more than just receiving a paycheck. Working and building career skills gives an individual a sense of purpose, accomplishment, and structure as well as social opportunities. All individuals should be afforded the chance for employment. Too often, an individual with a disability must choose between employment and Medicaid coverage. Medicaid “buy-in programs” break the barriers for workers with disabilities to access meaningful, higher-wage employment while maintaining critical Medicaid coverage and services.

To learn more, see this fact sheet from the U.S. Department of Labor: https://www.dol.gov/sites/dolgov/files/odep/topics/medicaidbuyinqaf.pdf

NOTE: Tennessee does offer something similar to the buy-in program for those with an intellectual or developmental disability, who would qualify for SSI on the basis of disability, but who earn too much money. That program is the Employment and Community First CHOICES Working Disabled Group. This program is through TennCare’s 1115 waiver and specifically provides employment supports to help individuals with IDD who meet the state’s nursing level of care criteria, as well as individuals who are “at risk” for the nursing level standard of care. TennCare’s income standard for the ECF CHOICES Working Disabled Group is 250% of the federal poverty level, which is $36,450 for a household of one. That may be an option for some.

I want to thank my friend Lauren Pearcy, executive director of the Tennessee Council on Developmental Disabilities for introducing me to Jennifer Hout, and for them introducing me to Medicaid “buy-in programs.” Jennifer did a beautiful job of explaining a very intricate subject, and Lauren was kind enough to review this blog post to ensure that the information we are sharing is accurate. I appreciate all of these folks working together to highlight an opportunity that our state could consider. If you have questions, please contact me at janet.shouse@vumc.org. Thank you!

Jennifer Hout is a recent graduate of Partners in Policymaking with the Tennessee Council on Development Disabilities. She previously worked as an occupational therapist at Williamson County School District, Ascension Saint Thomas Hospitals, and Vanderbilt Stallworth Rehabilitation. With the training tools provided by Partners in Policymaking, she is eager to help others and be an advocate for disability rights and inclusion, accessible and affordable health care, universal design, and employment opportunities.


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